When it comes to jewelry, most people think about the sentimental value of the pieces they own.
They may not realize that jewelry can also have a significant financial value that may be worth protecting just the same as they would their house or vehicles.
If something happened to your jewelry, would you be able to replace it or would you simply regard the loss as any other risk that you take in life?
If you are inclined to buy insurance policies for the most valuable things you own, then perhaps you should calculate the value of your jewelry based on appraisals rather than purely on sentiment.
Appraised values will indicate the amount of insurance that you will be able to buy because you cannot get a policy without an appraisal, while sentimental value may be placed on items that have very little value and which might be better protected in a different way.
In this article, we will discuss how jewelry insurance works and whether or not it is actually worth the cost.
Table of Contents
1. What Is Jewelry Insurance
Assuming that you have decided that you wish to find a way to recover cash value from items that you own and can provide written valuations for them, then you may also want to know that jewelry insurance is not the same thing as a store warranty, but rather, it goes far beyond that.
A store warranty will simply indicate some protection against manufacturing defects in workmanship or mishaps that were caused by the bench jeweler when handling and repairing your item.
But jewelry insurance will actually replace an item for loss, theft and damage on the pieces covered.
The first step to jewelry insurance is always an appraisal.
You will need a written jewelry appraisal in order to get a policy, and you should update your appraisals every few years or whenever you make a major jewelry purchase because the value of precious metals and stones can increase over time, as well as the labor costs for repairs.
The appraiser will look at the quality of your jewelry and determine a value for it, which will be what you use to insure it for.
2. Where To Get Jewelry Insurance
Jewelry stores can guide you to sources that you can buy jewelry insurance from, starting with the ones they use for their own coverages.
If you have a reputable jewelry store that you trust and work with from time to time, just ask them for information and follow their lead to find out if that source will work for you.
Jewelry Insurers
Another way to find insurance is to simply search online for companies that offer insurance and then call them to ask how their set up works. Companies such as Jewelers Mutual, BriteCo or Chubb Limited are a few of the known insurers for fine jewelry.
Homeowners Insurance
Last, there is your typical homeowner policy which will have a very limited amount of coverage included. You can even find insurance through your car insurance company such as Progressive or Travelers Insurance.
These companies will offer you a rider for your home and auto policies so that you can bundle more of your insurance needs together with them.
The Cost of Jewelry Insurance
At first it may seem as though buying insurance is relatively affordable on the surface, but you must also consider that there is the initial cost that must be paid to get a policy in the first place.
One such cost is that your items must have written Appraisals for each of them and they must be relatively up to date due to market changes over time.
These Appraisals must not be confused with store receipts although the store receipts are also helpful to have.
Typically, you will spend at least $100 for each item that you want to have insured for to purchase an Appraisal.
After acquiring an appraisal, then you can shop for the monthly cost per piece that you want insurance. The average cost will fall around 1 to 2 % of the value to insure per year.
So if you have a $5000 ring it will cost between $50 to $100 per year.
If you have many pieces of fine jewelry and the value of them adds up to $50K, then your average cost will be in the neighborhood of $500 to $1000 a year to insure.
Keep in mind that the cost of an insurance policy is heavily dependent on the area where you live, much the same as car insurance or homeowner insurance is.
If you live in an area where there is a higher documented rate for theft or for regular natural disasters, then you will simply pay more for your policy.
3. The Benefits of Jewelry Insurance
Much like car insurance or homeowner insurance, jewelry insurance is there for you when the worst happens and you lose your precious jewelry.
Even if it’s just a simple loss such as leaving your diamond earrings at a restaurant, jewelry insurance will reimburse you for the cost of replacing them.
And in the event that your jewelry is stolen, whether it’s from your home or while you’re wearing it, jewelry insurance will reimburse you for the cost of replacing it.
Let’s look at a few benefits of buying insurance for your jewelry:
- Full value amount allowed for claims. If you have a ring that costs you $10K then your homeowner policy will typically only cover up to $2K. That amount will not even buy the mounting let alone the center diamond.
- Insurance will cover items for more types of mishaps than a homeowner policy will allow for such as for theft or loss.
- A policy will not have a deductible and will not have exclusions typically found in a homeowner policy. A homeowner policy will deduct for “time of use” which means that if you have enjoyed your ring for 20 years before it was burned up in a fire, then you will not get as much reimbursement because you were able to have use of it.
4. How Jewelry Insurance Works
First, you will need to pick the right coverage. When shopping for insurance, there are factors that you need to keep in mind:
- Value. Consider the amount of coverage in relation to the jewelry and the include appreciation.
- Replacement options. Find out if you will be allowed to choose a cash payment or will it be strictly a duplicate replacement.
- Choice. Will the insurance company allow you to choose which store to replace or repair your items or will you be forced to deal with a store who you are no longer happy with?
- Coverage. Scour to make sure that the types of coverage include the types of risk that are most likely to happen in your life such as loss, theft, damage or repair.
- Cost. Add up the cost to buy the policy over the life span of ownership to calculate if it makes practical sense. Include the amount for deductibles and yearly premiums.
Then you will need to shop for what you want to buy.
Take your time doing this because there can be fluctuations in pricing that will take you for a wild ride.
Check Your Homeowners Insurance Policy Cover
Start by checking your Homeowner Policy first to see what they exclude and how much they will pay out for what they will actually cover.
Your agent can help you understand this and give you a general idea of what to expect.
You may find that your homeowner policy excludes jewelry from their base policy or if they do cover it, the limit is very low.
Start from there and then shop for a company that will cover you for those exclusions and amounts that are too small.
How To File A Jewelry Insurance Claim
Presuming that you now have a policy in hand for your items, let’s consider how to actually use it.
Remember that your insurance policy does not cover for wear and tear. So if you have scratched the face of your watch or the top of your ruby, it will not be covered the same way that it may be if you simply lost it.
Think about that.
First, be prepared.
Before you make that phone call, make certain that you can back all the information that will be required. You should have this available at the ready to shorten the claim time.
You will need:
- Insurance policy number and any policy numbers for homeowner or secondary insurance that are going to be considered.
- Date or approximate date that the item was lost, stolen or damaged.
- Details of the circumstances of how the loss occurred.
- Police report reference number if loss was occurred by theft.
- Recent appraisal for the item. This is important, because if you don’t have one, the insurance company will put their own valuation on it and it wont be high.
- Photos. If the appraisal does not have photos included (it most certainly should), then you will want to supply them so that you have proof for the likely value of the item(s).
- Record the conversation and the date. This may be necessary if the insurance company tries to find reasons to deflect, delay or otherwise say that you failed to comply.
- Keep original boxes and receipts along with any other paperwork that pertains to your item.
Remember that the company is in no rush to pay a claim, but nevertheless, will require YOU to report the loss asap.
5. Tips For Keeping Your Jewelry Safe
If you have purchased insurance, it is relatively safe to assume that you are interested in safeguarding a loss. Here are some tips so you can avoid having to use your policy.
Do Not Wear Your Jewelry While Working
Remove jewelry if you know that you are going to be doing something that can damage it such as yard work, working with chemicals, or even housework. Many times the work you do can result in the loss of an expensive diamond.
Do Not Remove Your Jewelry In Public
Not even to wash your hands. Leaving an item on a public bathroom sink or in a hotel room is a surefire way to quickly realize the loss of it. Chances of you getting it back are 99.99 % against you.
Hide Your Jewelry From Thieves
Do not keep your fine jewelry in a jewelry box at home.
Reserve that for costume pieces that you do not care as much about. When a thief enters your home, they will head straight for that box and empty it.
They will not be bringing a loupe to examine any of it, so put your expensive items in a place that is unlikely to be searched.
Leave Your Jewelry At Home During Summer Activities
Do not wear your jewelry when you go swimming. Chances are that if a ring fits, it will suddenly become too loose if you are swimming in cold water and it can slip off.
This is also an issue when going to the beach and using sun tanning lotion. Lotions and sun screens will be a great lubricant to help that jewelry just slide right off your body.
FAQs About Jewelry Insurance
Is Jewelry Insurance Worth It?
This is a difficult question to answer. It depends on many factors such as how often you wear the jewelry, what the value of the jewelry is, and whether or not you think you can take care of it.
If your jewelry isn’t worth that much, you may want to just get a rider on your homeowner’s insurance policy.
Should I Insure Expensive Jewelry?
When it comes to expensive jewelry, or jewelry that is difficult to replace, then you should most definitely insure it. This is something that you will not want to have to replace out of your own pocket.
Do You Need An Appraisal For Jewelry Insurance?
You will need an appraisal for jewelry insurance. This is because the insurance company will want to know how much your jewelry is worth in order to give you the proper coverage and no policy will be underwritten by investors without one.
Should I Insure A $3000 ring?
Insuring a $3,000 ring is completely relative to how much you think it is worth to you. For some people, a $3000 ring is not that expensive and for others, it is their life savings. It all depends on how much you are willing to pay the monthly premium.
Over time, you will eventually spend more on premiums than the jewelry is worth.
When Does Jewelry Insurance Make Sense?
If you own expensive pieces of jewelry or even own a store full of it, then consider your surroundings.
- Do you live in a higher crime area?
- Do you live in a remote area?
- Does your lifestyle include a lot of activity that could result in a loss, or are you relatively inactive or even sluggish?
- Do you have friends or relatives who have friends who may know about your jewelry?
- Do you live in a tornado or wildfire zone?
- Do you travel a lot and like to wear your nice jewelry?
Think about these things and then figure out if you can afford to insure all of your pieces or if it makes better sense to insure just the most expensive or sentimental ones.
Final Thoughts
Jewelry insurance is a great way to protect your jewelry from loss or damage. However, it is important to understand the terms and conditions of your policy before you sign up.
Make sure that you are getting the coverage that you need for your jewelry.
Also, be aware of how much your monthly premiums will cost so that you don’t end up spending more on jewelry insurance than your jewelry is actually worth.