Many of you may have just purchased an engagement diamond ring and have a substantial amount investment in it. Do you insure it? While no one plans to lose their jewelry the reality is that it is occasionally lost or stolen. If you are considering getting insurance for your jewelry the following information will help you to make that decision.
Insurance Requisite
It may be a general misconception that having a homeowner’s insurance policy will cover your jewelry. While a homeowner’s policy will cover jewelry lost from fire or stolen the basic policy will only insure items up to amounts of $1000 - $2500. Details should be discussed with your insurance carrier. To obtain jewelry insurance a general prerequisite is to have an existing homeowner’s insurance policy. Diamond engagement rings or any piece of jewelry whose values are over this amount will not be insured. To obtain a full coverage a floater policy is necessary to cover in full, jewelry lost or stolen or damaged. The floater is a policy that is added to the basic homeowner’s for an additional premium and has to be scheduled. If you do not own a home and therefore do not have a homeowner’s policy you can obtain insurance for your jewelry from Jewelers Mutual.
Appraisal needed
In either case, before you can apply for the insurance policy you will need to have the jewelry item appraised, which you can get by going to a Graduate Gemologist. The appraisal will list the description of the item and its replacement value. The insurance company will determine the premium payments based on the appraised value.
Average floater premiums
The average premiums pad for a floater policy is $20-$25 per thousand dollars of value. That means that for a ring appraised for $10,000 the insurance payments are approximately $200 -$250 per year.
Sample of the appraisal portion only
Updates needed periodically
You may have your jewelry insured by a floater but it is necessary to update your coverage from time to time. This is to cover changes in material value of your jewelry, such as the value of gold increasing and also possible inflation in the economy. You may find that after five years your policy does not cover the replacement of your jewelry. It is recommended that you update your policy every two to three years.
Alternative practices if not insured
If the insurance premiums for your jewelry are a bit more than you would like to spend there are preventative measures you can take to minimize the risk of loss. Most jewelry, especially rings are not lost when they are worn. They are lost when they are taken off. It could fall where no one can find it or picked up by someone. It is always safer worn, provided that periodic inspection is made to insure that the mounting is securely holding in the gemstones. A general inspection of at least once a year is recommended, two to three times a year may be preferable. Keeping your jewelry in a safe place is also recommended. The jewelry box on your dresser is the first place a burglar will look. A bank safe deposit box, hidden wall or floor imbedded safe is more secure.
If your jewelry is lost or stolen and it was insured you will get replacement and you may be glad you had the foresight to get insurance. On the other hand you may have been paying the additional insurance payment for twenty five years and in hindsight thought that the money could have been put to better use. Insuring your jewelry or not is a personal decision.
