In this guide to jewelry insurance, we answer the most frequently asked questions in relation to this subject. Should you insure your jewelry? If yes, how? That diamond on the ring finger of your left hand has great sentimental value in addition to its monetary value, not to mention the necklace your grandmother gave you...you'll never want it stolen or lost!
There are probably many pieces of jewelry that you are emotionally attached to or have great value in. You want to keep them in a safe place where no one with bad intentions can see them. Hiding your valuable jewelry in a pillow or digging a hole in your yard isn't going to fix this. You need a suitable solution to this problem like jewelry insurance.
What is jewelry insurance?
Jewelry insurance works like other insurance coverage. This is a type of insurance where the policyholder is protected against loss, damage or theft of jewelry.
Most insurers reimburse the claim in cash, while others provide a replacement for the damaged jewelry. Like any other insurance coverage, the insurance holder has to pay a fixed premium for the insurance.
Are my jewelry covered by home insurance?
Yes! Your home insurance protects you against the theft of your valuables or damage in the event of a fire, windstorm, hurricane, etc. So why should you consider taking out personal jewelry insurance as a supplement?
The answer is a little different. Although your home insurance covers your valuable contents like furniture, jewelry, watches or furs, the value of the coverage is limited to a certain value . It may not be enough to cover all your valuables. Therefore, you may have to pay high deductibles in the event of theft or damage.
Home insurance protects your valuables against theft and damage caused by natural disasters. What if you lost your wedding ring while washing the dishes? Or if that pretty diamond shattered into pieces when you accidentally knocked it on your wooden table? These are all reasons why you should consider jewelry insurance.
Should I insure my jewelry if my home insurance already covers me?
You shouldn't worry too much if you don't have much valuable jewelry or if you inherited the jewelry. Homeowner's insurance coverage will potentially be sufficient for you. However, it is important to ask your insurance broker before making this decision.
In most cases, your homeowner's or renter's insurance will have specific limits for your jewelry. Make a list of your jewelry and ask for an appraisal from the jeweler or insurance company you are going to engage with.
If the value of your valuables exceeds the limit of regular insurance coverage, you can add special jewelry coverage to your insurance. The premium amount, coverage, deductibles and limits vary among different insurance providers.
How does personal jewelry insurance work?
Most jewelry insurance policies are tailored to each client's specific needs and requirements. It will be calculated based on the item you are insuring, premium rates, deductibles, etc.
If we take a look at how jewelry insurance works, you can take out a standalone policy for your valuables. Alternatively, you can add a rider or floater, terms used for special jewelry coverage, to your homeowners insurance.
Jewelry that is not covered by your regular home insurance is protected against possible loss by personal insurance. On the other hand, the standalone policy for the insurance of your necklace, your engagement ring or your heirloom valuables is covered for any type of loss: theft, damage, loss, mysterious disappearance. Generally, the insurance company settles your claim based on the type of coverage.
Types of compensation methods for your jewelry insurance
1. Jewelery reimbursement coverage
This is the most common type of coverage. You buy the insurance policy, file a claim for compensation, the settlement is made by the insurance company and you receive the claimed check. However, the settlement amount is an important consideration in reimbursement coverage.
It can be the actual cash value of your jewelry or an equal replacement cost. In the case of real money value, you will receive the amount of damage equal to the replacement cost minus the depreciation of the jewel. On the other hand, the replacement value pays for the damage without subtracting the depreciation. Therefore, replacement cost reimbursement coverage is better than ARV (actual cash value).
2. Replacement jewelry coverage
If you have taken out insurance for the replacement or repair of your jewellery, you no longer have to worry about calculating the reimbursement amount. Once the refund request has been made, you will receive the replaced jewel, just like the one you lost. The only downside to replacement jewelry coverage may be underinsurance. In this case, you may have to pay a premium for the replacement.
What jewelry should you insure?
You should consider insuring all jewelry that has high sentimental value. The most common are your wedding band, your engagement ring or the necklace your spouse gave you on your last wedding anniversary. In addition, you can also take out insurance for your valuables. These items may not have value at appraisal, but they are priceless keepsakes in your heart.
There are different types of precious jewelry. Some are the ones you wear regularly, some are heirlooms, while others are for special occasions or events. Your usual home insurance covers your jewelry up to a certain limit, and the protection only covers theft and damage.
The majority of women and men never take their wedding rings off. Women like to wear their engagement rings, bracelets or any other necklace inherited from their mother or grandmother. The risk of losing these assets to an unnatural event is higher.
How much does jewelry insurance cost in Canada?
In Canada, jewelry insurance can cost you between 1.5% and 2% of the value of your jewelry (annual premium). For example, a piece of jewelry worth $6000 will cost you around $90-120.
These rates are only a general assumption, and actual rates vary depending on where you live, the type of jewelry and its value.
Benefits of Personal Jewelry Insurance
The biggest benefit of jewelry insurance is that you get full coverage for your jewelry. Many insurers do not offer any deductible. This means that you will be fully reimbursed in the event of theft or loss.
Easy to add to your home insurance
It's easy to add floating insurance or an endorsement for your jewelry insurance to your home or tenant insurance. A simple phone call to your insurance broker or service provider will get you this extra special coverage.
Cover against all types of losses
Your valuable possessions are not insured against damage, loss or any other incident in standard home insurance coverage. However, by adding Personal Jewelery Insurance, you are covered against any loss, damage or theft.
You don't have to worry about your valuables
When you know that your jewelry is insured against any incident, you have peace of mind. So you can enjoy your beautiful moments without fear of losing your engagement ring or having your necklace stolen.
Disadvantages of Personal Jewelry Insurance
High home insurance premiums
When you add the special coverage of jewelry insurance to your already existing home insurance, be prepared to pay a higher price. You will notice that after adding the coverage, your home insurance premiums will have increased by a considerable amount.
Some insurance companies have a maximum limit
Most of the time, your jewelry will be covered by floating or supplementary insurance. However, in some cases, the insurance provider may have a maximum limit for replacement or reimbursement costs.