This is why you need diamond ring insurance, watch insurance, and more
Whether you are looking for diamond ring insurance or Rolex watch insurance, jewelry insurance coverage is incredibly important. Not only does it eliminate high deductibles, but it provides broader coverage and eliminates headaches and stress during a claim.
The COVID-19 pandemic has impacted many facets of our society and behaviors. It has limited gatherings, reduced large parties, and eliminated a significant amount of travel and tourism. This extra disposable income, in many cases, has meant an increase in engagements, wedding planning, and jewelry shopping. This begs the question: do I really need to insure my jewelry? Are jewelry insurance companies just a waste of money?
What is jewelry insurance and why do I need it?
Jewelry insurance is incredibly important, especially for people with large collections and an appreciation for diamond rings and Rolex watches. A homeowner’s policy provides limited coverage for jewelry. If your jewelry is stolen or vanishes, traditional homeowner’s policies provide as little as $1,000 coverage. On top of that, your homeowner’s deductible, which is traditionally $1,000 or more, would also apply. If your engagement ring is of any significant value, you may not only be mourning the sentimental value, but the financial cost of replacing it, too. In order to appropriately cover your jewelry, you should either schedule your most cherished and highest valued items or ask for blanket coverage on your policy.
What does it mean to schedule jewelry and what is blanket coverage?
If you schedule jewelry on your insurance policy, it means that you specifically list the descriptions and values of your rings, bracelets, gold jewelry, diamond rings, and watches that you own. Each description should include the four C’s: cut, clarity, color, and carat weight. These are commonly found on an insurance appraisal generated by a certified gemologist or jeweler. Scheduled jewelry or diamond ring insurance coverage starts at $1-2 per $100 worth of your jewelry value. If you want to schedule a $25,000 ring, the insurance premium would be approximately $250-$500 annually. If you have a piece of jewelry that is highly sentimental, a custom piece, or of significant value, you should schedule your jewelry coverage. It may require proof of value ahead of insuring it, but it simplifies the claim process significantly.
Blanket jewelry coverage provides a broad coverage limit for multiple jewelry items. It typically does not require descriptions, receipts, or appraisals, and there is a limit per item. For example, you may carry $50,000 or $100,000 of total blanket jewelry coverage. However, there may be a $10,000 or $25,000 limit per item that the insurance company will pay in the event of a loss. Generally, blanket coverage is less expensive and an easier process to insure your jewelry than scheduling it. However, the drawback is the insurance carrier may request proof of value of your damaged or stolen jewelry at the time of a loss.
The primary benefit of both scheduled and blanket jewelry coverage is that no deductible is required, and broader coverage is provided by your insurance carrier. Credits are also available for jewelry premiums if your jewelry is kept in a safety deposit box or a home safe when they are not worn, too.
What does premier jewelry insurance cover?
Scenario 1: You are traveling and misplace your ring.
With standard homeowner’s insurance, you would have no coverage for this type of loss. Homeowner’s policies do provide limited coverage for theft of jewelry, but they typically exclude lost or misplaced jewelry or diamonds. Additionally, if your ring was stolen, traditional home policies limit that coverage to $1,000-$2,500 per item and you will also be responsible for paying your homeowner’s deductible of $1,000 or more before your insurance company pays.
If your ring is covered on a scheduled or blanket basis with high-net-worth insurance, you will have coverage and no deductible will apply. If you carry blanket coverage, there may be a limit to what your insurance company will pay, but it is almost always higher than the limit on your traditional home policy.
Scenario 2: Your diamond falls out of your wedding band.
If your diamond falls out of your wedding band, you’re going to wish you had diamond ring insurance. You will not have coverage for this heartbreaking occurrence with the majority of standard home insurance policies. However, if your jewelry is insured, you would not be stuck paying for this out of pocket.
Scenario 3: Your home is broken into and many valuables are stolen including your $10,000 wedding band, $35,000 anniversary ring, and your grandmother’s heirloom necklace insured at $4,200.
If you do not insure your jewelry by scheduling it or adding blanket coverage, your basic homeowner’s policy would provide coverage for this, but the coverage would be severely limited. First, you would be responsible for your homeowner’s insurance deductible of at least $1,000. Additionally, your policy would only pay out around $1,500.
As you may realize by now, this would be a covered loss if your jewelry is insured. Let’s say each jewelry item is scheduled, but the price of gold has increased drastically since your grandmother’s necklace was appraised several years ago. It is now worth $6,000. If you are insured with a premier insurer, that would be covered up to $6,000 figure. Many premier insurance policies automatically provide up to 150% coverage of the appraised value if the market value of the item increases at the time of a loss.
Now, ask yourself again, “should I insure my jewelry?” A trusted insurance advisor that specializes in high-net-worth insurance can help you navigate the coverage and make recommendations based on your distinct needs. Additionally, if you have a large jewelry collection valued at $50,000 or more with a premier insurer such as Sterling Coverage, we can recommend reputable gemologists, jewelry appraisers, and more to help ensure that your jewelry is properly insured.