They say, “Diamonds are forever.” But, if you want your diamond to last forever, it had better be insured.
Did you give or receive a special piece of jewelry this Valentine’s Day? If so, take time to read this post and insure your special trinket—one of the most important (and often overlooked) steps in the jewelry purchasing and giving process.
While important pieces of jewelry, like family heirlooms and last year’s anniversary tennis bracelet, are priceless to the owner, their monetary value is tangible and insurable.
And like many big purchases, jewelry is an investment—both sentimental and monetary. This is especially true for wedding jewelry. According to Investopedia, one third of all brides will lose her wedding ring at some point.
If possible, insure your jewelry before or immediately after purchase. This coverage will protect against potential financial losses and preserve the sentiment behind your gift through replacement or reimbursement options.
Jewelry Insurance Coverage
First, consult your home or renters insurance policy. Most homeowners or renters insurance covers items only if they are stolen, rather than lost or damaged. You can purchase an extension, or policy rider, to cover items of higher value than the maximum limit (typically between $1,000-$2,000) typically set by home insurance policies. This, however, will likely require an appraisal before the item(s) can be insured.
Appraisals can be obtained from a certified appraiser, or gemologist, separate from the company that sold your gem. According to Forbes, it’s important for policyholders to track and adjust the value of their jewelry.
Verify the appraisal based on the jewelry’s value, of which there are three, when getting your jewelry appraised:
- Cash value is the value of your jewelry at today’s market rate, rather than the purchase price.
- Replacement value means the insurer will pay you according to the current market value at the time of loss.
- Agreed value allows you and the insurer agree upon a settlement price.
Ideally, you should have your jewelry appraised every two years to ensure your appraisal is accurate with the current market value of that piece. It is also helpful to watch the changing market value of precious metals and gems, and have your appraisal documentation updated accordingly.
Be sure to read the fine print in any insurance plan. The best jewelry protection policies will cover every threat—from theft to accidentally dropping the piece in the ocean.
Specialized jewelry insurance is also available, which include policies that insure your item for more than its current value. This option might replace a lost or stolen item, instead of paying a predetermined amount of cash, for example.
The Cost of Insuring Jewelry
On average, jewelry insurance costs $1-$2 for every $100 spent on jewelry, per year. If you have $15,000 worth of valuable jewelry in your home, your collection should cost between $150-$300 per year to insure. Furthermore, investing in a bank vault or personal home safe to hold your most treasured items could lower your insurance costs.
Aside from selecting an insurance policy, there are other risk management practices you can use to better protect your cherished items.
3 Tips on How to Protect Your Jewelry:
- Keep an eye on your jewelry. Take note of its wear and tear damage, and be extra cautious of prongs holding precious gemstones. If the fitting of your jewelry changes, have the piece re-sized to safeguard against loss.
- Lock jewelry in a safe when on vacation or away from home for extended periods of time. If you bring your jewelry on vacation, avoid wearing them in swimming pools, open water or in situations that don’t call for baubles and bangles.
- Keep a file of your appraisals, receipts, documents and photos for reference in case of a loss.
There is no better time than the present to protect your prized possessions. Allow jewelry insurance to provide you and your loved one peace of mind with the assurance that heirlooms and timeless gifts will never be completely lost.
Does your current insurance cover expensive jewelry and family heirlooms? Contact INGUARD today to ensure your valuables are properly protected by your personal insurance program.
Image Credit: Seth Lemmons via Flickr