Not only does your jewelry have sentimental value, but it would cost you an arm and a leg to replace should it get lost, stolen, or damaged. This is why having enough jewelry insurance is paramount for financial protection and peace of mind.
Read on to learn everything you should know about jewelry insurance.
Jewelry insurance is an addition (also known as an add-on, rider, or floater) to your homeowners or renters policy that covers engagement rings, earrings, necklaces, watches, and other named items should they be lost, stolen, or damaged. In the event of a claim, your insurance company will repair or replace the covered item.
The most commonly covered perils include fire, lightning, explosions, vandalism, smoke, theft, falling objects, volcanic eruption, windstorms, hail, sudden cracking or tearing, riots, and damage caused by ice, snow, sleet, vehicle, aircraft, and short-circuit. However, there’s no mandatory coverage, so you should check with your insurer whether your items are covered.
The most common exclusion is wear and tear. For example, watch scratches are unlikely to be covered since this is a typical wear and tear case.
Some homeowners policies may have a long list of covered jewelry, whereas other policies may exclude jewelry and valuables altogether. Also, take into account that standard homeowners and renters policies may have low coverage limits.
That said, there’s a chance that your homeowners insurance provides enough coverage for your particular case. But if it doesn’t, then you may need extra coverage.
You may need extra jewelry coverage when:
Purchasing extra coverage boils down to adding items to your policy or increasing coverage limits at the expense of a higher premium.
Whether you need high-value jewelry insurance depends on the total cost of your jewelry and your risk tolerance. In general, to insure $10,000 worth of jewelry, you have to pay around $10 per month or 0.1% of the cost of jewelry. With this in mind, you can determine whether extra coverage is worth it or not.
With most insurers, the annual cost of wedding ring insurance, diamond ring insurance, and any other jewelry insurance will vary from 1% to 2% of the value of the jewelry. So, for example, insuring $5,000 worth of jewels will cost you $50 to $100 per year.
The factors that affect the pricing include your state, zip code, the type and amount of coverage, your deductible, and whether you’re adding coverage or buying a standalone policy.
There are a few things you need to do in advance.
There are dozens of reputable insurance companies in the United States, including Jewelers Mutual, Lavalier, Chubb, Zillion, Gem Shield, GEICO, and JIBNA. When choosing your insurer, take into account the type and amount of coverage, the level of personalization and privacy, and your budget and risk tolerance.
Before you file a claim to your insurer, report the loss or theft to the police, giving as many details as you can to expedite the investigation. Note that, depending on your policy type, you may have to pay a deductible before you are reimbursed for the lost item.
Jewelry insurance is not mandatory, but you may need it if you have pricey items and/or are intolerant to the financial and moral risk of your valuables being lost, stolen, or damaged.
For example, if the limit of your coverage is $1,000, and the total value of stolen items is $10,000, then you will have to pay $9,000 out of pocket. This is what may happen if you are underinsured.
Your homeowners or renters policy may or may not cover specific jewelry items.
If it does, make sure to check whether the amount of coverage is enough.
If it doesn’t, you can add jewelry coverage to your homeowners or renters policy.
As a rule, you need homeowners or renters insurance as underlying coverage for a jewelry add-on. However, some insurers do offer standalone jewelry insurance.
Almost half of all jewelry claims are theft claims, followed by water damage, mysterious disappearance, accidental damage, weather, and fire. That said, you never know what the future holds, so it would be reasonable to find a golden mean between the type/amount of coverage and the monthly premium.
Oleksandr is an expert in deep research. He covers various insurance topics across verticals, adopting to every local law.