Jewelry Insurance: Explanation Of Jewelry Insurance

Did your wedding ring just go down the kitchen sink drain? Do you have jewelry insurance? Jewelry insurance will replace or repair your lost or damaged jewelry. You can stipulate whether you want a cash payout, a replacement of equal value, or an exact replica.

Jewelry insurance can come in two forms:

  1. As a rider to your home insurance. A basic homeowner policy provides very minimal jewelry coverage and does not always cover the full replacement value of wedding rings and antique jewelry without a rider.
  2. As a stand-alone policy. If you have very expensive jewelry, you should consider a stand-alone policy because its coverage cap is much higher and it has all-risk coverage.

You can also have two jewelry insurance policies. You can have the rider to cover your less expensive items and a stand-alone policy to cover your wedding rings and family heirlooms. This can be helpful in keeping down the cost of your insurance premiums.

Your premium, which will be between one and three percent, is based a number of factors:

  • Your appraiser’s value set for the piece of jewelry.
  • The precedent set in your state for jewelry losses. For example, if your state has a high crime rate, your premium will be higher.
  • Do you store your rarely-worn jewelry in a home safe or a bank safety deposit box?
  • A higher deductible means a lower premium.

There are a number of things you need to do in order to ensure you receive coverage for the full value of your jewelry and to ensure you receive a cash payout or replacement of equal value.

  • Take a full inventory, including receipts and photographs of each piece. If you decide you want to recreate a lost piece, the jeweler will be able to build a much more accurate replica with a photograph.
  • Get appraisals for all of your jewelry from an independent jeweler. Do not get the appraisal from the place where you purchased the piece. Get a quote from an impartial third party.
  • Have your jewelry reappraised regularly. The value of a piece of jewelry generally increases with time, so your replacement value may need to be increased.

Those little pieces of jewelry are usually your biggest sentimental possession, and your most expensive. Be financially prepared to repair or replace your precious items if they are damaged or lost.

Jewelry Insurance: What Does Jewelry Insurance Cover?

Jewelry Insurance: Explanation Of Jewelry Insurance

When thieves break into your house, they go straight to your bedroom and into your jewelry box. Theft is one of the most common claims for jewelry loss and it is commonly a crime of opportunity. Friends and neighbors can be tempted to snatch jewelry left unsecured. Burglars will watch your house waiting for an opportunity to break in undetected.

Jewelry insurance covers the loss or damage of your jewelry due to theft, fire and a myriad of other scenarios, including mysterious disappearance. Your jewelry’s warranty only covers you for cleaning and sizing; for more thorough coverage you need jewelry insurance.

Situations your jewelry insurance provider will not cover are:

  • War and nuclear damage, customs seizure and illegal trade.
  • Pest damage, regular wear-and-tear and damage due to an inherent flaw.

Jewelry insurance also does not cover:

  • Items that are already damaged or missing stones.
  • Loose gem stones.
  • Damage or loss due to poor craftsmanship or a defect.

You can purchase jewelry insurance in several different forms. The most effective type of coverage is called scheduled insurance. It is a stand-alone and an all-risk policy, which means:

  • Your jewelry can be assessed individually and given maximum coverage.
  • You are covered for all contingencies except a few named perils listed in your policy. It will also give you worldwide coverage.

You can also buy jewelry insurance with an agreed cash value (ACV) policy. This type of insurance comes with a high premium because the indemnity does not change no matter what gold is selling for on the day you lost your ring. This predetermined cash payment is usually saved for antique, rare or custom jewelry.

The most basic insurance is unscheduled coverage. This is a simple rider attached to your home insurance policy and is very limited in what circumstances it will cover and the amount of your indemnity. This coverage is best if your jewelry value totals less than a few hundred dollars.

You can choose how you would like your jewelry replaced. You can choose:

  • Jewelry repair.
  • Replacement of equal kind and quality.
  • Cash payment of actual cash value. This is determined by the price of gold or diamonds at the time the jewelry was lost.
  • Cash payment in the amount equivalent to the repair or replacement.
  • Payment of the scheduled amount which is the predetermined maximum amount your insurer agreed to pay.

In case your cherished wedding ring simply vanishes, make sure you are financially covered with jewelry insurance.

Jewelry Insurance: Who Needs Jewelry Insurance?

Jewelry may be your smallest, most valuable and most precious possession. It is much easier to accidentally lose your wedding ring than it is to lose your car. Jewelry has a high value, whether it is monetary or sentimental and it should be covered accordingly.

Professionals who buy, sell and make jewelry must protect themselves and their business from jewelry losses due to theft or damage. There are a number of scenarios that can happen in a business:

  • Thieves can break into your store and steal your jewelry.
  • Employees can steal your jewelry.
  • You or your employees can accidentally damage or lose valuable pieces.
  • Any of these occurrences can also happen to your customer’s jewelry while it is in your possession for repair or cleaning.

Private citizens who own extraordinarily valuable items need extraordinary coverage. If you own valuable jewelry, whether they are highly valuable new pieces, priceless heirlooms, antiques or collections, you will require specialized jewelry insurance that will meet your lifestyle and security needs. If your jewelry value is over $1,000,000, your premium rate will be dependent on your home security systems, the material and construction of your home and the container in which the pieces are housed.

If you have inherited jewelry from a family member, it is very wise to get it insured. Jewelry is one of the few things that actually increase in value as it gets older. Ask your living aunts or grandmother if there is any original documentation for the piece, including receipts and appraisals, in order to determine its true value.

In order to cover an antique piece for its full value, you must be able to determine its age, history, characteristics, qualities and value, which can only be found in historical documentation. If there is no documentation available, a new appraisal needs to be done and may only include a current market price. If you have the historical documentation, take it with you to the appraiser. You can then purchase a jewelry insurance policy with an “agreed cash value”. This means the insurance company will base its payout to you on an agreed amount that is commensurate with the piece’s historical and rare qualities, not on current market prices.

If you simply cherish your engagement ring, you will want to keep it safe. Take care of it and if your ring is damaged or lost, you will want to have it repaired or replaced. Jewelry insurance will take care of your precious items whether they cost $500 or $5,000,000.

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