Jewelry Insurance Guide
In this jewelry insurance guide, we answer the most frequently asked questions related to this topic. Should You Insure Your Jewelry? If Yes, then how? That diamond in the ring finger of your left hand has a great sentimental value besides the numerical value and the necklace your grandma gave you... you’ll never want to get it stolen or lost!
There are probably many jewelry items that you are attached to emotionally or that have a high value. You want to keep them in a safe place where no bad eye can catch their sight. Hiding your valuable jewelry in a pillow or digging a hole in your backyard is not going to work. You need a contemporary solution for this issue, and it might be to get your jewelry and valuable items insured.
Continue reading if you want to discover what jewelry insurance is, how it works, and how much it can cost you!
What Is Jewelry Insurance?
Jewelry insurance works like other insurance coverages. It’s a type of insurance where the insurance holder is protected against jewelry loss, damage or theft.
Most of the insurance providers pay the cash claim, while others provide a replacement for the damaged jewelry. Like any other insurance coverage, the insurance holder must pay a fixed premium for the insurance.
Is my jewelry covered under homeowners insurance?
Yes! Your homeowner’s insurance provides you protection against the theft of your valuable ítems or damage in case of fire, windstorm, hurricane, etc. So why should you consider getting personal jewelry insurance as an add-on?
The answer is a bit technical. Although your homeowner’s insurance covers your valuable content like furniture, jewelry, watches or fur, the coverage value is up to a certain value. It might not be enough to cover all your valuable jewelry ítems. As a result, you might have to end up paying high deductibles in case of theft or damage.
The homeowner’s insurance coverage protects your valuables against theft and damage caused due to natural calamities. What if you have lost your wedding ring while washing dishes? Or what if that pretty shining diamond broke into pieces when you accidentally stroked it on a wooden table? These are all reasons why you should consider jewelry insurance.
Should I insure my jewelry when my homeowner’s coverage already protects me?
You shouldn’t worry much when you don’t have many valuable pieces of jewelry or inherited jewelry. Homeowner’s insurance coverage will potentially be enough for you. However, it’s important to ask your insurance broker before you make that decision.
In most cases, your homeowner’s or renter’s coverage has specific limits for your jewelry. Make a list of your jewelry and a jewelry appraisal from the jeweller or the insurance company you’re going to associate yourself with.
If the value of your valuables is more than the limit of regular insurance coverage, you can add special jewelry coverage to your insurance. The amount of premium, coverage, deductibles, and limits will vary across different insurance providers.
How Does Personal Jewelry Insurance Work?
Most of the jewelry insurance policies are tailored to the specific needs and requirements of every customer. It will be calculated depending on the item you’re insuring, your premium rates, deductibles, etc.
If we look into the working of jewelry insurance, you can buy a stand-alone policy for your valuable possessions. In another case, you can add rider or floater, terms used for special jewelry coverage add-on to your homeowner’s insurance.
The jewelry that remains uncovered in your regular home insurance is protected against any losses in the scheduled floater or rider. However, the stand-alone policy for your necklace insurance, engagement ring insurance, or your heirloom valuables is covered for any kind of loss: theft, damage, loss, mysterious disappearance. Most commonly, the insurance company fulfills your claim according to the type of coverage.
Types of compensation methods for your jewelry insurance
1. Reimbursement Jewelry Coverage
This is the most common type of coverage. You buy the insurance policy, file a claim, settle by the insurance company, and receive the claimed cheque. However, one important consideration in reimbursement coverage is the settlement amount.
It can amount to the actual cash value of your jewelry or equal replacement cost. In the case of actual cash value, you will receive the amount of damage equal to the replacement cost minus the depreciation of the jewelry piece. On the other hand, replacement cost pays the damages without subtracting the depreciation. Therefore, replacement cost reimbursement coverage is better than the ACV (Actual Cash Value).
2. Replacement Jewelry Coverage
If you’ve purchased insurance coverage for replacement or repairs, it frees you from the worry of calculating the reimbursement amount. Once you file the claim, you’ll get the replaced piece of jewelry just like the one you’ve lost. The only red flag in replacement jewelry coverage can be under insurance. In that case, you might have to pay a deductible for replacement.
What jewelry should you insure?
You should consider insuring all of your jewelry which has a high sentimental value. The most common one is your wedding band, engagement ring, or the necklace your significant other gifted you on your last wedding anniversary. Besides, you can also buy insurance for your heirloom valuables. These ítems might not be valuable in the appraisal, but these are priceless memories in your heart.
There are different types of jewelry pieces in your possession. Some are those you regularly wear, others are inherited, whereas some are for special occasions or events. Your regular home insurance coverage has protected your jewelry to a specific limit and protection is against theft and damage only.
Most commonly, women and men as well never take off their wedding rings. Women love to wear their engagement rings, bracelets or any necklace inherited from their mothers or grandmas. There is a greater chance of losing these possessions as a result of an unnatural event.
How Much Does It Cost To Ensure Jewelry in Canada?
In Canada, jewelry insurance can cost you between 1.5% to 2% of your jewelry’s value (annual premium). For instance, a piece of jewelry that has a value of 6000 $ will cost you around $90 to $120.
These rates are just a general assumption, and actual rates vary depending on where you live and the specific jewelry type and value.
Advantages Of Scheduled Homeowner’s Property Coverage For Jewelry
Here are the advantages if you buy a scheduled homeowner’s property coverage for jewelry.
The biggest benefit of scheduled jewelry insurance coverage is that you get a full amount of coverage for your jewelry pieces. Many insurance providers offer zero deductibles. It means you’ll get the full amount reimbursed in case of theft or loss.
Easy To Add To Your Homeowner Insurance
It’s not difficult to add a floater or rider for your jewelry insurance to your already existing homeowner’s or renter’s insurance coverage. A quick phone call with your insurance broker or service provider will set you up for this additional special coverage.
Covers You Against All Kinds Of Losses
Your valuable possessions are not insured against the damage, loss, or any other incident in the standard homeowner’s coverage. However, by adding the scheduled personal jewelry insurance, you are covered against any loss, damage or theft.
You Don’t Have To Worry About Your Valuable Possessions
When you know that your jewelry is insured against any incident, you have peace of mind. It lets you enjoy your beautiful moments without worrying about losing your engagement ring or getting your necklace snatched.
Drawbacks of Scheduled Homeowner’s Jewelry insurance
High Home Insurance Premiums
When you add the special jewelry insurance coverage to your already existing home insurance, get ready for a spike. You will notice that after adding the coverage, your home insurance premiums have raised to a considerable amount due to the addition of the jewelry insurance.
Some Insurance Companies Have Maximum Limit
Mostly, your jewelry will be covered in the floater or rider coverage. However, in some cases, the insurance provider might have a maximum limit for replacement or reimbursement costs. In that case, you might have to pay out of your pocket at the time of claim.
You Might Be Victim Of Hidden Clauses In Fine Print
The insurance service providers are notorious for adding hidden clauses in fine print. It’s totally dependent on the vigilance of the insurance policy buyer. You must carefully read the fine print and match every clause to what your broker told you. If you fail to do so, chances are that you might become a victim of a hidden clause.