Owning engagement ring or other pieces of jewelry comes with tremendous responsibility. There is more to these lovely stones than meets the eye. You also have to consider the possibility of damage. Let’s not forget jewelry can be stolen or lose. As a result, you practically lose thousands of dollars unless you have jewelry insurance. In order to help you protect your jewelry, this post sheds more light on the jewelry insurance and why you need it.
What Is Jewelry Insurance?
Jewelry insurance is a type of insurance that you can take out to protect your precious and expensive jewelry pieces against theft, damage and in the instances when you lose them.
Since jewelry tends to be quite expensive, people often do not bother with jewelry insurance as they think it would be too much for their budget. In reality, the contrary is true – jewelry insurance is more affordable than you think. At the same time, it is not a “rich people” problem. This type of an insurance is available to all jewelry owners. Luckily, it is possible to find adequate coverage regardless of the budget.
How Much Does Jewelry Insurance Cost?
Jewelry insurance costs about 1-2% of the jewelry’s value per year, according to Jewelers Mutual.
Here’s how it works; let’s say you have an engagement ring worth $10,000. Now, consider 1-2% of the total value which will be paid for jewelry insurance annually. This means you will pay between $100 and $200 on a yearly basis.
Moreover, if you buy a ring that cost $5000, you would have to pay as little as $50 for the insurance.
Considering the fact that in most instances, jewelry insurance is paid in monthly installments, you will pay between $8 and $17 a month for a $10.ooo-worth engagement ring. For such a small price you get to protect your engagement ring from damage, stealing, losing.
Some jewelry insurance companies also offer various special offers and discounts to policyholders, which add more benefits to the client’s budget. Some of these discounts include:
- Security system discount
- Vault discount
- Gemprint discount
- Valued policyholder discount
Why Do You Need Jewelry Insurance?
The reason why you need to take out jewelry insurance is obvious – you don’t want to lose your hard-earned money that was spent on that piece of jewelry. With the insurance, regardless of the scenario, you get the compensation which downplays the damage.
Another benefit of jewelry insurance is that there are different types to choose from. You can choose the ideal insurance for your jewelry based on your needs, preferences, and budget of course.
Let’s take a closer look at how jewelry insurance can help you. For the purpose of demonstration, we are going to use the same example from above – a $10,000 engagement ring and an annual cost of $100 to $200 for insuring the engagement ring. To make things more accurate, we’ll assume the monthly installment is $200.
Imagine the scenario where after five years your engagement ring is stolen, but you have jewelry insurance that can help you get a new one.
You could claim a $10,000 amount from the insurance company to buy a new. Now, when it comes to price, during the five-year period, you would have only paid $1,000 for the insurance. In turn, the insurance saves you as much as $9,000 when it comes to buying a new engagement ring.
Tips For Taking Out Jewelry Insurance
Now that you know the importance of jewelry insurance and why you need it, here are some important tips to bear in mind. First, obtain multiple quotes, from different companies, before you choose where to take out jewelry insurance. Different companies provide different benefits, you never know what can work for you unless you have multiple options.
Kullberg Jewelers recommends asking a series of questions to each company they request a quotation from. This will help you identify the trustworthy companies and determine which company can offer the most convenient and practical service for your needs. Here are some questions to ask:
- Are any security precautions required? If so, would they affect the premium?
- Are there any exclusions that you should be aware of?
- Are there any specific retailers that need to be contacted for a replacement piece of jewelry in case of a claim, or can you choose any of the local retailers in your area?
- Can I ask for a larger deductible for premium savings?
- Does jewelry insurance coverage feature some specific geographic limitations such as internationally or outside of my home?
- Does my jewelry insurance apply in instances when negligence or carelessness are involved?
- How does the claim process work and what is needed to submit a valid claim?
- Is an appraisal for the piece of jewelry necessary before the insurance policy can become active?
- Is depreciation ever imposed?
- Is my policy all-risk (damage, robbery, disappearance)?
- Is there a deductible? If so, how much?
- What happens in instances when the item is irreplaceable?
- What if only a part of a jewelry piece is missing e.g. a diamond out of a ring?
- What is the “pair and set” clause (a pair of earrings, set earring, pendant etc.)?
- What is the difference between scheduled and non-scheduled coverage?
- What proof is needed to justify my claims?
- What risks are covered by the particular policy, and whether damage and an accidental loss would be covered as well?
- Would the insurance pay out when the jewelry is damaged, lost or stolen while the piece of jewelry is not in your possession at the time of occurrence?
Brides.com recommends signing up for jewelry insurance as soon as possible. This will allow you to wear your brand new piece of jewelry with confidence knowing it is protected. Let’s put it this way when buying a brand new car, the first thing you do is to insure it. The same thing you should do with the jewelry.
Although this seems as unnecessary, the sooner your jewelry is insured, the better. While you don’t want to think about negative events and disasters, the reality is that they do happen. Houses get broken into, we misplace our belongings quite frequently, things get broken. Without jewelry insurance, you would feel devastated if your ring (or some other piece) was stolen, damaged, or lost.
This doesn’t apply to engagement rings only, but all sorts of jewelry. As soon as you purchase (or receive) it, you should start looking for insurance providers.
Scheduled vs. Non-scheduled Jewelry Insurance
There are two types of insurance coverage and this is the point that confuses a vast majority of people. Scheduled and non-scheduled jewelry options are available to all potential policyholders, but what is the difference between them?
Scheduled jewelry refers to those items listed on your policy. This type of an insurance displays the description and the specific limit of insurance for every item on the list. On the other hand, non-scheduled insurance is more suitable for a collection of smaller-valued items such as watches.
Non-scheduled jewelry insurance comes with a set deductible amount and a ceiling of coverage. Jewelry items that are usually covered with this type of insurance are valued less than $1000 and the highest coverage amount available is $5000. Unlike with scheduled jewelry, in this case, insured items are not individually listed on the policy’s declaration page.
To be eligible for non-scheduled jewelry insurance, one must have at least one scheduled item. It is also important to mention that non-scheduled jewelry insurance can be quite limited. In most instances, it revolves around loss and damage as the result of some specific causes like fire or theft.
Non-scheduled coverage doesn’t cover mysterious disappearance or loss, unlike scheduled insurance.
What about homeowner policy?
Homeowner policy oftentimes gives us a false sense of security. How many times have you thought you don’t need jewelry insurance because homeowner policy covers everything. This isn’t entirely correct! In fact, almost all homeowner insurance policies are inadequate for luxury watches and fine jewelry that worth more than $1000.
In fact, some of these policies cover only certain issues such as stolen items. These insurance policies don’t cover replacement costs of missed items, damages to jewelry etc. That’s why these items require a separate policy.
Jewelry insurance is vital for peace of mind, protection of the precious pieces, and it protects your budget too. Even though it is easy to assume that jewelry insurance is incredibly expensive and only works for celebrities, that’s not the case. As seen above, jewelry insurance is affordable, meaning you have no excuse not to protect the jewelry you own or look for adequate protection for the jewelry you plan to buy. Two different types of insurance are available and all you have to do is to opt for the one that appeals to your needs the most.