You’ve made the decision to buy that expensive item of jewelry and left a good chunk of change with the jeweler. Now it’s up to you to protect your investment. With a cost for insurance that averages 1-3% of the jewelry items’ value, it just makes sense to purchase jewelry insurance. Jewelry gets lost, stolen, broken, left behind, misplaced, run over, slammed in doors, and washed down drains. Insurers hear it all. Don’t assume homeowners or renters policies automatically cover you. Many homeowners’ policies cover a total of just $1,000 for jewelry theft, and include a high deductible as well.
A $1,000 limit for jewelry coverage on a homeowners policy not only doesn’t cover much, but it often requires you to find the sales slip, appraisal, and/or get quotes for replacements when making a claim. A separate jewelry insurance policy from a specialty insurer costs a similar amount and often carries a lower deductible besides. Making a claim can avoid extra work and frustration involved when working with homeowners coverage, plus you’re not making a claim on your homeowners policy.
To get a good jewelry insurance policy, get an insurance appraisal at the time of purchase. Then find the right policy for you. Consider these points:
- Coverage. What exactly does the policy cover? Theft, mysterious disappearance, damage? What is excluded? Not all policies cover mysterious loss or damaged stones. Unfortunately, mysterious loss is one of the leading insurance claims according to Jewelers Mutual Insurance Company, a specialty insurer that covers mysterious loss (and damaged stones).
- Deductibles. What are the options for deductibles? You pay this part first, before insurance coverage kicks in. Choosing a deductible can lower your premiums (payments for insurance). Again, homeowners coverage often involves a high deductible. When choosing a separate jewelry insurance policy, you can frequently obtain better coverage with no deductible or low deductible for a comparable cost. Worth thinking about.
- Claims. How well does the company pay claims? Check independent rating agencies, such as A.M. Best. Can you report a claim at any hour or online? What are the requirements to make a claim? And how long does the claim process take?
- Do you need to get multiple quotes? Can you choose your own jeweler or does the insurer tell you who to work with? Is it a replacement company or the lowest bidder?
- Travel coverage. Is the ring covered when you travel – even out of the country?
- Appraisals. Most insurance companies require an appraisal to document and value your jewelry item. Do you need one? If one is not needed, how is your jewelry valued and what do you need to substantiate value at the time of a claim?
- Inspections. Does the insurer require periodic inspections that, if missed, void the policy?
- Insurer expertise. Who do you want to work with if you have a claim? Does expertise matter? Jewelers Mutual Insurance Company employs specialists that only deal with jewelry insurance.
- Security. Does the policy contain security requirements? Are there discounts if you take certain precautions?
- See the policy. Can you view exactly what the policy says? Can you download a sample?
Losses happen. Jewelry insurance just makes sense.
Jewelers Mutual Insurance Company is the only company specializing exclusively in jewelry insurance in the United States and Canada. The American Gem Society and Jewelers of America exclusively endorse Jewelers Mutual. Its continued A+ Superior rating from A.M. Best reflects the company’s strong financial position. Jewelers Mutual insures the jewelry industry and individuals in the United States and Canada with more than 10,000 commercial and 200,000 individual policyholders that carry $3 billion in personal insurance coverage. Visit the Jewelers Mutual Web site
When it comes to insuring your valuable pieces of jewelry there can be a lot of uncertainties and confusion. There are many varieties of jewelry insurance and making sure your valuables are completely insured in case of theft, damage and even loss is very important. After all these can be expensive and sentimental items. In order to make the right decisions about insuring your jewelry it is always best to speak to an experienced jewelry insurer.
Choosing An Insurer
You can either choose a specialty jewelry insurance company or your regular insurance company just make sure your agent has plenty of experience with insuring jewelry. While you may feel that going with a big name insurer will get you the best deal it is often times the small business who is willing to work with you and negotiate a reasonable price for such insurance. Keep in mind that this can vary based on your location and other specifics.
Pure Insurance is a small jewelry insurance company that offers policy flexibility and competitive rates. They will work with you to find what type of policy you need and will even combine policies to get a better rate. But companies that specialize in jewelry insurance often provide better coverage specific to jewelry often offering good coverage for damage or repair as well as claim payment options. Be sure to shop around and compare different companies to make sure you are getting the best deal and plan for your needs. Compare things like coverage details, claim time, claim process, settlement options and price.
Types Of Coverage
When you are shopping for this type of insurance you need to know there are two basic types. Blanket coverage is usually included in your renters or home owners policy and doesn’t require an appraisal of the pieces. It can however be a problem if you don’t have any pictures or other documentation proving you owned the pieces or the specifics of the pieces should a loss occur. The other policy type is scheduled property, which covers items that are accessed individually and appraised. The premium is set based on this information but it is a good idea to get your item appraised regularly since most policies do not have an automatic appreciation adjustment. Your insurer can discuss all of the nitty gritty details with you and help you to choose the best policy for your jewelry and your personal needs.
Jewelry insurance comes in many forms and varieties and only an insurance agent can provide accurate and specific advice. However, it helps to know enough about jewelry insurance to ask your agent the right questions and to be aware of how the process works. The time to ask your insurance agent the questions is before you insure an item, not when you need to file a claim. Read the fine print in your insurance contract to be sure it provides the coverage you expect.
Understanding jewelry insurance begins with recognizing the difference between scheduled and unscheduled property.
Unscheduled property (jewelry not specifically listed) is typically included in basic homeowner or renter’s policies under blanket coverage. There is a usually a deductible (typically $500) and a maximum amount of coverage (typically $1500) although these amounts can vary with the specific policy. This type of coverage does not require an appraisal but sales receipts, written descriptions or photos are beneficial in proving the items existed and estimating their replacement value.
Scheduled property (jewelry specifically listed) is included in a floater, rider or endorsement to homeowner or renter’s policies. Jewelry insurance is also available with a separate policy, from a company specializing in jewelry insurance. For scheduled property, the insurance appraisal is vital because it describes the jewelry item and provides the “insured value” that is used in determining the premium you will pay to insure the item each year. Most scheduled property policies do not have an automatic appreciation adjustment as is common for the house and other unscheduled property. Therefore, even if it might cost 50% more to replace an item in five years, the “insured value” is still only that stated in the appraisal.
If you file an insurance claim, the settlement process and amount paid will depend on the policy and in particular, if the policy allows replacement or agreed value settlement. For agreed value policies, the settlement amount is stated in the policy whereas replacement value allows the insurance company to replace your jewelry or make a cash settlement based on the insurance company’s cost to replace your item. The insurance company’s liability ceiling is set at the “insured value” on the appraisal.
Do you have enough jewelry insurance? The answer depends on what kind of policy you have, the “insured value” is on the appraisal, the settlement procedure is for your particular policy, and the accuracy of the information on your appraisal. If you have a jewelry item valued at more than the $1500, you should definitely consider scheduled as opposed to unscheduled coverage.
The critical issue for scheduled property coverage is the how accurate is the information on the appraisal.
1) If the information on the appraisal is vague and general, the insurance company can replace the item with an item that satisfies the description but perhaps is not the quality and true value of the lost item. Be sure your jewelry appraisal has a detailed and accurate description of the jewelry item.
2) If the appraisal value is artificially high, the insurance company can replace the item at their cost even though the client paid premiums for years on a value twice as much. This is often the case for purchases from a jewelry store with prices double other retailers and the store provides an insurance appraisal even higher than the purchase price. You do not need an appraised value more than 150% of the price you would pay at low priced online retailer.
3) If the appraisal value is too low, the insurance company can make cash settlement that might not cover the current replacement cost of the item. This could be the case for items purchased three or four years ago from a low price online retailer and the appraised value was at or below the purchase price. With diamond prices increasing about 10% a year recently, it does not take long for appraisal values to be out of date if too close to online retail purchase prices. Be sure to have your jewelry insurance appraisal updated every four or five years so you do not end up underinsured.
Not all homeowners or renters insurance policies offer full coverage for you engagement ring or your other valuable jewelry. Your insurance policy probably covers jewelry theft but not loss for other reasons.
The Typical Insurance Policy
A renter or homeowners insurance policy usually set limits on the loss of certain categories of personal property, like jewelry. Homeowners policies typically pay a maximum of $1,000 for jewelry theft. Where as a renter’s insurance might only pay $500.
You should know whether your insurance policy covers jewelry loss for reasons other than theft like if jewelry is lost or damaged. Read your policy carefully and be sure to ask your agent to explain the types of losses that are covered by your insurance policy.
Buy Additional Jewelry Insurance
You can also purchase additional insurance for your fine jewelry, but be sure to ask your agent plenty of questions so that you fully understand the coverage:
Is there a deductible? If there is, how much is it and if you raise or lower your deductible will it affect your policy costs?
Does the policy require an appraiser to value the jewelry? Do they have only certain types of appraisers whose reports are acceptable?
Are the items covered anywhere? Will the insurance protect you on a domestic or international trip?
Is your jewelry covered for full replacement cost? Will you have to replace the item, or can you get a cash settlement?
Does the policy cover repairs to damaged jewelry?
Some Jewelry Insurance Options
The Chubb Group provides insurance specifically for jewelry. They offer insurance through independent insurance agents and jewelry retailers. This is an example of The Chubb Group’s engagement ring policy guidelines”
Full coverage for the itemized amount shown on the policy.
Coverage applies worldwide for lost or stolen rings.
Replacement is not required, Chubb offers a cash settlement. If you do replace the ring you select the jeweler.
They also recommend you get an appraisal for all insured jewelry, but only for pieces valued over $50,000. Chubb does not cover loose diamonds.
Jewelers Mutual is another insurance company that offers policies that cover jewelry. They cover both repair and replacement. They do not cover unset stones, damaged items, or antique jewelry. An appraisal is required for their coverage.
Always make sure you read any fine print in your policy and be sure to ask your agent to clarify anything that you do not fully understand.
Dan enjoys writing articles that help people find the information they need to make informed choices.