If you own jewelry, you probably want it insured - it's relatively easy to damage, and it's small, so it can be relatively easy to lose or for someone to steal. Your two basic options are adding a jewelry rider to your homeowner's or renter's policy or purchasing a separate personal jewelry insurance policy.
The trick is to ensure that your policy covers the replacement value. You don't want to be under-insured (you won't be covered in total if you make a claim), and you don't want to be over-insured (your premium is tied to the amount the item is insured for, so you will be paying unnecessary premiums for no additional coverage). Here are some of the more common questions we get...
Do I choose who replaces my jewelry when I make a claim?
Unless there is a clause in your policy indicating you can go to the jeweler of your choice to have your item replaced or repaired, your insurer will likely choose the jeweler. Because of their volume buying power, insurers calculate their premiums based on the assumption that they will pay less to replace the insured item than you will. You may buy one item, two, four, or six in your lifetime. Your insurance company buys hundreds every month.
Some jewelry-specific insurers like Jewelers Mutual sell personal jewelry insurance that allows you to choose your jeweler. They expect and receive volume discounts from their suppliers for the items they buy. It's worth comparing the cost of putting a rider on your homeowner's or renter's insurance versus getting a policy from a company like Jewelers Mutual. If you're curious about personal jewelry insurance, check out www.jewelersmutual.com/Personal-Jewelry-Insurance.
Will I need an appraisal?
You will likely need a jewelry and gemstone appraisal to add a rider for more coverage on your homeowner’s insurance or a new policy specifically for your jewelry pieces.
Jewelry items insured through a rider on your homeowner's or renter's policy usually don’t appreciate them, so it’s a good idea to have your items reappraised every three to five years.
Otherwise, if you have the misfortune of damaging or losing an item whose market value has increased, you may be stuck with a replacement value that may not cover the repair or replacement cost.
You also want to ask prospective insurers if they ever depreciate the values of insured items and on what basis. In this situation, you’ll want to avoid paying premiums for items based on outdated values higher than the current market value.
Click here to get an appraisal.
What will your policy cover?
Some policies may be “all risk,” meaning they cover a wide range of incidents. Other policies only cover “Named risk” that only cover specific incidents. So make sure you know what kind of losses are covered, so you don't have a nasty surprise if something unusual happens to your jewelry. Some policies cover damage, loss, and theft as the most common risks, but other things like “mysterious disappearance” are covered. For example, suppose your insured items turn up missing, and you have no idea how that happened many or even when it happened. In that case, your insurer could consider that a mysterious disappearance instead of a theft.
If your policy excludes mysterious disappearances, you won’t be covered. Some other situations to consider are things like you are covered if you loan your jewelry to a friend or child and the pieces are lost or damaged or if your jewelry consists of pairs or sets (such as earrings, wedding bands, or other ensembles) will your policy replace the entire set if one item is lost or damaged.
Can I get cash instead of replacing my jewelry?
Cash value insurance is a more expensive and uncommon option for riders but will give you the most flexibility to choose how your pieces are repaired or replaced. If you’ve insured an item and are paying a premium based on its replacement value, you will likely not get the replacement value in cash. If your policy has a cash-out option, it will probably be significantly less than the replacement value.
Click here to get your jewelry insured.
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