I know I am often put off when going to Toys ‘R Us and the cashier pitches me on an $8 warranty for a $25 toy that its new owner is going to outgrow in about 6 months. The percentage of what I would be paying to insure that item just doesn’t make sense.
Jewelry typically is much more valuable. Not all though, so let’s examine when it is appropriate to buy jewelry insurance and how to do so the right way.
WHEN IS THE BEST TIME TO PURCHASE JEWELRY INSURANCE?
When you want to insure something valuable. This could mean a large out of pocket expense or perhaps it is something of sentimental value. If it cannot be easily replaced, then you should consider jewelry insurance.
QUICK TIPS ON JEWELRY INSURANCE:
- Select an all-risk coverage in case the jewelry is lost or stolen
- Annual premiums should be about 1-2% of total worth of jewelry
- Insure the value not the purchase price
- Get an Appraisal from a qualified appraiser or jeweler
- Make sure you have flexibility in choosing your jeweler should you need to use your policy
WHAT DOES JEWELRY INSURANCE COVER?
Insurance policies all differ. Just like when insuring your car or home, it is very important to establish everything a policy does, and probably more importantly, does not cover. Don’t be disillusioned in thinking your homeowners or renters policy is going to cover the replacement cost. Typically these types of policies only insure up to $1,000 per item. There is also a maximum amount of jewelry that is insured, something along the lines of $5,000. This is in aggregate of the value of all jewelry.
WHAT QUESTIONS SHOULD I ASK UPON SELECTING A CARRIER?
Exactly what is your insurance covering?
All-risk coverage is the most inclusive. There are a wide range of insurance levels out there so make sure you are getting what you think.
What if I flush it down the toilet?
Make sure your insurance will be covered under any circumstance. I know this seems redundant.
If I do accidentally lose it, what steps do I need to take in filing a claim?
What you need to find out is if you have a certain number of days to report the lost jewelry. What paperwork needs to be completed in that situation? Will the insurance carrier still cover the full amount or only a portion in the event of loss?
What is the total value my ring is being insured for?
It is not uncommon that insurance carriers only insure the purchase price of the jewelry instead of the current market value. This can be a disadvantage if you got a great deal on your purchase.
Which jewelers can I go to if I need to file a claim on my policy?
Sometimes carrier have a designated list of jewelers you have to select from. If the jeweler you love to use is on that list, great! Better to know beforehand. Some policies just issue a check for the total insured amount and then you are free to replace the jewelry wherever you please.
Whose responsibility is it to keep all the documentation supporting the jewelry’s value?
Is the insurance carrier keeping a copy of agreement, appraisal, etc. or are they depending on you to do that?
Why should I get a jewelry appraisal?
Much like buying a home, someone has to determine what the value actually is. Your insurance premiums will be based off this information. It is very important that your jewelry is not only appraised, but is done so from a credible source. For instance, a professional appraiser, jeweler, or GIA certified gemologist. Don’t depend on your sales receipt to cut it. This will not be an acceptable documentation of value. Also, it is important to note that value of jewlery changes over time so getting appraisals done occasionally will ensure you are covered for the current value of the ring.
When it comes to jewelry insurance, it is pennies on the dollar to insure something valuable. It gives peace of mind in the event your jewelry is lost or damages. Work with your trusted jeweler (providing they have the proper credentials) to determine the appropriate amount of coverage. Keep all your appraisal paperwork and insurance information in a safe place.
