Getting a new piece of jewelry is always an exciting experience. Seeing your finger sparkle with a dazzling diamond engagement ring, wearing a unique vintage necklace that no one else has, or receiving a pair of heirloom pearl earrings from your grandmother are events that give us a special kind of joy. Aside from the obvious aesthetic benefits that it provides, we like to wear jewelry because its value goes beyond money; it’s an expression in material form. Jewelry plays important roles in our lives, and we want nothing but to keep it safe forever. The best way to do so is by purchasing jewelry insurance.
As much as jewelry is a token of happiness, it’s also a hot item for thieves. Even if you don’t wear your jewelry out daily, that doesn’t mean that it’s 100% safe at home. In fact, one of the most commonly stolen items during residential burglaries is jewelry, according to this 2018 report from Statista.
Stolen jewelry is rarely recovered, which is why having them insured is essential | Source: Statista
That’s why you must insure them. This might be a foreign practice to many, but we protect the most expensive things we own, right? We get insurance for our cars, homes, and other costly properties, so it’s only sensible to get jewelry insurance as our gems and jewels can be among the priciest things we own. If you’re planning to insure your jewelry or haven’t thought of doing so, read on to find out what you must know about jewelry insurance.
How Does Jewelry Insurance Work?
Purchase jewelry
So, how does jewelry insurance work? It works like other insurance policies you may have. Since it’s meant specifically for jewelry, it will cover more than a homeowner’s insurance or renter’s insurance policy. Imagine that you have an $8,000 vintage gold bracelet that you want to insure. Before you buy it, you’ll get a quote from an insurance provider. Once you’re ready to purchase, you must provide an appraisal to make sure that your quote is accurate and that you have sufficient coverage. You can do this either before or shortly after you insure your jewelry. Knowing how much your item is worth helps both you and the insurer feel confident that if ever the need to repair or replace your jewelry arises, you will have enough coverage to do so.
Submit requirements
Here are some of the most common prerequisites that insurance companies ask for before they insure your jewelry:
- The original receipt – This applies to newer purchases
- Certificates – This applies to larger gemstones. Check for certification from reputable organizations, such as the Gemological Institute of America, American Gem Society Laboratories, and European Gemological Laboratory
- Appraisal – Have your jewelry appraised by a certified appraiser, such as the National Association of Jewelry Appraisers
- Pictures – Take photos of all the valuable jewelry you own. Appraisers usually photograph them, but it would be useful for you to have a copy of your own.
File a claim
The process is very similar to car insurance claims. A policy agent will assign you a claim number, and he or she will ask you to furnish the company with relevant documents, such as photos, police reports, and documentation about your stolen or lost jewelry.
To file a jewelry insurance claim, you need to present a value appraisal of the jewelry in question. If it’s a piece of diamond jewelry, provide your insurance company with the center diamond’s GIA or AGSL certification report. But, if you got your item from a reputable jeweler, then there’s no need to worry if you don’t have these documents at hand. It shosuld be easy to request them from their respective providers.
Is Jewelry Covered by My Homeowner’s Insurance?
The most common misconception about insuring jewelry is that a homeowner’s or renter’s insurance policy is sufficient to cover them. That isn’t true at all. Most of these policies consider jewelry as a “non-essential” household item, which means that it gets the short end of the stick when it comes to coverage value. A standard homeowner’s insurance policy will only cover jewelry up to a set dollar limit, which is around $1,000 to $2,000 of unscheduled personal property. Meaning, if your items are stolen, the insurer won’t pay you more than that amount in reimbursements.
Now, just imagine if you lost a piece of jewelry worth $6,000–you’d be at a considerable loss assuming that your television, computers, and expensive silverware have been stolen, too. To replace that item with something of similar value, you’d have to cover the rest of the expenses out of your own pocket. Furthermore, insurance companies rarely cover jewelry that is simply lost.
Types of Jewelry Insurance
Replacement policy vs. traditional reimbursement
The traditional insurance model is the typical coverage under many homeowner’s insurance policies. Under this model, the company values your compensation through actual cash value, which “pays damages equal to the replacement value of damaged property minus depreciation,” according to the Insurance Information Institute.
On the other hand, the replacement policy “pays the dollar amount needed to replace damaged personal property without deducting for depreciation but limited by the maximum dollar amount shown on the declarations page of the policy.”
In other words, you’ll receive a larger payout at the time of claim if your insurance follows the replacement model, considering that most things depreciate. You will receive the amount required to replace the item you insured at the time you insured it. ACV might leave you with more out-of-pocket expenses after a claim. In this case, a jewelry insurance cash payout might not always be the best option.
What Does Jewelry Insurance Cover?
Insurance companies offer different options to insure your jewelry, but a good insurance plan would be one that’s comprehensive: a policy that will cover the full value of your jewelry in the event of theft, damage, accidental loss, and mysterious disappearance. People often confuse the definition of the last two terms, so let’s discuss them further below.
Accidental Loss
This is when you lose your jewelry by mistake, or when it has become irreplaceable because of an accident. For instance, you own a stunning diamond necklace. You wear it, drive to work, and you get in a car accident. The airbag releases, your sparkling necklace breaks, and broken crystals are everywhere. Such damage is irreparable. This situation is considered an accidental loss because your jewelry has been damaged beyond repair. You’re lucky if you have jewelry insurance (and hopefully car insurance, too) when this happens because it will cover the losses you incurred.
Mysterious Disappearance
This is when your jewelry goes missing, but you’re unsure if it has been stolen or misplaced. Stolen jewelry can go unnoticed for months, especially for pieces you rarely wear. For example, you own an extravagant pearl necklace that you only use during special occasions. After wearing it to an event, you store it in your jewelry box and wait for the next special occasion to arrive. Once it does, you open your storage only to find out that it has disappeared. You’ve scoured every corner of your home, but it’s still nowhere to be found. This could only mean that it has been stolen in the few months that you didn’t wear it, and you just didn’t notice. This situation is a case of mysterious disappearance.
Is worldwide Coverage Necessary?
It’s important to get an insurance policy that has worldwide coverage. If you travel outside of the country and lose your jewelry, you are assured that it can still be replaced. It’s so easy to misplace valuables when you’re traveling, plus, thieves often target tourists because they aren’t familiar with the area.
Make sure that your policy will allow you to work with your local jeweler or let you select from a list of preferred jewelers in case you need to have it repaired or replaced. Some insurance companies may require you to get services only from their jewelers, and that is something you should avoid.
How Much Does Jewelry Insurance Cost?
The cost will vary based on a lot of factors: the type and value of your jewelry, how often you wear it, your place of residence, and your insurance plan’s deductible. It’s affordable and usually costs around 1% to 2% of the total value of your jewelry. Some insurers will offer you a discount if you take safety measures to protect your jewelry. For example, if you have a safe deposit box or a home security system, you can possibly pay a lower premium than usual.
So, at what value should you insure jewelry? Consider the minimum annual policy premium. Usually, it’s $25 to $30, depending on your state. If the rate calculation for the complete policy premium is less than the minimum, then your premium shall follow the minimum for the state you’re living in.
How Much Does It Cost to Insure a Diamond Ring?
As mentioned above, the rate will vary based on several factors, but the typical cost is around 1% to 2% of the jewelry’s value. The same goes for diamond rings. If you have a $5,000 ring, then having it insured may cost you as little as $50 per year.
What Jewelry Should I Insure?
There is not one rule in determining what jewelry you should insure, but here is one crucial question that must be answered: regardless of how much it’s worth, what piece of jewelry is valuable to you? “Valuable” is not just about how much money was spent to acquire the jewelry; it could also mean emotional worth. There are lots of jewelry that carry sentimental value: anniversary bands, wedding rings, engagement rings, family heirlooms, or custom-made pieces. These are all precious items, and you’d want to protect them at all costs, right?
But if you’d like to focus solely on monetary value, then a good question to ask would be this: if you lost this piece of jewelry, could you easily replace it with out-of-pocket money? If the answer is no, then having that piece insured should be the way to go.
Is jewelry Insurance Worth Getting?
As a jewelry owner, you might have asked yourself this question at least once. And the answer is a quick yes. Insuring your jewelry is worth every penny for so many reasons. If you have a valuable item, like an engagement ring or a sentimental piece of jewelry, then having it insured is a must. Because of its typical fits-in-your-pocket size, jewelry is one of the easiest items to lose and the hardest ones to replace. We take off our rings and bracelets when we wash our hands, work in the kitchen, put on lotion, or go swimming. It’s so easy to misplace jewelry because we often have to remove them to finish specific tasks more quickly.
As for engagement rings, many people wear them as little as possible out of fear of damaging them or losing them. This should never be the case. Jewelry, especially a beautiful ring that signifies your partner’s love for you, is meant to be enjoyed by its owner, not merely kept locked away in a safe. Purchasing jewelry is a waste if it’s rarely worn. With insurance, you get to worry less about your wearing jewelry so you can enjoy its benefits more, which is the way it’s supposed to be.
Conclusion
Nothing can ever replace the sentimental value attached to a piece of jewelry if it gets lost or stolen. But having a reliable jewelry insurance policy will allow you to do the next best thing: repair or replace your cherished gems and jewels. It’s always better to be safe than sorry, and responsible jewelry owners know that insuring these valuable items is the smart thing to do.
We hope this article convinced you to avail of an insurance plan for your prized jewelry. If you’d like to expand your jewelry knowledge further, then you might want to check our article on the 10 facts about jewelry you didn’t know.