The ladies love their jewelry and have many fine pieces! And many are quite valuable! But how do you safeguard the jewelry and insure the jewelry against theft or just being lost? How does the insurance company know the value of your jewelry after the item has disappeared?
Should you insure the jewelry? There are many ways to look at that! Can you afford to lose the item and replace it without insurance? If so, do not buy insurance. The value of the ring, your emotional attachment to it (Grandma’s ring), and your aversion to risk taking are other factors. Best advice – do what gives you peace of mind. If you are going to worry about it, buy insurance.
What insurance might you already have on the jewelry? Most homeowners policies do provide limited coverage for jewelry. Look in the policy under the Special Limits of Liability section and the common language states there is a $1,500 limit for loss by theft of jewelry. Note this limit applies only to theft. If the house burns down and all your jewelry is lost, no limit applies. Your jewelry is insured.
Keep in mind that most homeowners policies insure personal property (jewelry is personal property) only against certain perils, those stated in the policy. These perils may vary depending on the different types of policies. Read your policy carefully as some policies do provide broader coverage. The Federal Flood policy provides $2,500 coverage on jewelry.
What are the most common insurance claims regarding jewelry? First is theft. Second, a stone is lost, i.e. you notice the diamond in your ring is missing. “Lost” is usually not a covered peril under a homeowners policy so no coverage.
In both cases, the best way to insure your jewelry is to “schedule” the items of jewelry by adding the schedule to your homeowners policy or buying a separate policy. Scheduling your jewelry gives you “all risk” coverage so even a stone lost is covered. The value of the jewelry is also established, preventing an argument after a loss.
Scheduling jewelry generally costs $10 to $15 per $1,000 of insurance. Thus, the cost to insure a ring for $20,000 is between $200 and $300 annually.
How much should I insure my jewelry for? Basically for its current value. Most insurance companies will require some form of documentation. If it is a newly purchased item, a bill of sale will usually suffice to determine the value. For pieces you have had a long time or an heirloom, have the item appraised and insure for the appraised value. Most importantly, take photos of all your jewelry and keep the photos in a safe place!
Talk with your independent insurance agent about insuring jewelry. The staff at C. T. Lowndes & Company is happy to discuss your insurance needs.