Insuring your Jewelry: What You Need to Know
Why and How to Insure Your Jewelry
You probably have some valuable jewelry that is very sentimental to you. Have you considered getting it insured? In case you're wondering why you should get it insured, here are some useful bits of information:
You can replace those pieces that mean so much to you.
Your jewelry will be replaced if it gets lost or stolen and you don’t even have to know HOW you lost it in order for the insurance company to replace it.
You can get the money needed to replace any jewelry that is lost and use it to buy the same piece or something else or just put the money in your savings account for future use.
How do I insure my jewelry?
There’s two type of jewelry insurance, scheduled and unscheduled. What does that mean?
Scheduled insurance: Any jewelry valued over a certain amount, needs to be specified, or scheduled on your homeowners policy. This “certain amount” varies with insurance companies but it could be in the range of anything over $1500-$10,000. This usually means an appraisal is required. Get this from a local jeweler by taking your piece in by appointment and having them prepare an appraisal for insurance purposes. If you make an appointment you might be able to wait while it’s being done although most companies will want you to leave the piece there for a few days for them to appraise.
Ask them to give you a conservative value. Why? Because you will pay insurance based on the dollar value the appraisal states your piece is worth. Typically, insurance companies charge $1.00-$1.50 per $100 of value. So if your engagement ring is worth $10,000, it will cost $100-$150 per year to insure it. Since the insurance company is only required to reimburse you for the amount that THEY can replace it for, and if they can replace it for less than your insured value, they could tell you at the time of a loss claim made by you, that they are only going to pay you $8000 because they have found the ring is easily replaceable at that rate. They will not reimburse you for all the dollars you spent insuring it for the $10,000. So again, ask your jeweler for a conservative appraisal.
Unscheduled insurance: Your homeowners policy allows you to add “unscheduled coverage”. This means you take all the jewelry you have, add it up mentally in terms of its worth, and ask for coverage in that amount. Let’s say you have two watches, simple gold wedding bands, many earrings and necklaces and bracelets. It is a good idea to line them up and take a photograph and keep for your own records. Then calculate what approximately you paid for them. Let’s say it’s $25,000 all together. Then you can ask for insurance for this amount. This does NOT include the items that need to be covered under your “scheduled insurance” as described above. Again, this jewelry is covered against all loss and all you need to do is tell your agent when you have lost something and its value and the company will send you a check. Whether or not you have a deductible depends on your insurance policy.
It is a good idea to review your homeowner policy every year. Ask your agent to come to your home to discuss each aspect of it. You don’t need to show your agent your jewelry. Keep it safely away. (click here for ideas on that) Review the values you have insured and update as needed. Ask your agent if the appraisals for your scheduled insurance have to be updated. Make sure you don’t do this unnecessarily because it generally costs you money each time you go to a local jeweler and ask for an update on your appraisal. By the way, the jeweler who sold you your engagement and wedding rings should offer that service complimentary at least initially.