Unprotected assets include a diamond engagement band, a vintage Rolex, or a Tahiti-sourced black pearl necklace. While most people have comprehensive insurance policies that cover their home and furnishings, it doesn't necessarily mean all items under your roof are covered.
Some policies exclude jewelry and other valuables, such as musical instruments, artwork, and furs. Some policies restrict coverage to a specific type of event and a dollar amount. This coverage isn't enough if the item's value has increased significantly since it was bought.
What You Need
Jewelry insurance is required if you have significant assets. It is also known as a "rider" and, more specifically, a "floater" (which targets small, mobile items). It takes over insurance coverage when the traditional one ends. It typically covers the insured item against loss, fire, theft, or damage. These policies may not cover jewelry or other valuables. For example, a watch might need to be insured by one of the top watch insurance companies.
Major insurers don't offer jewelry coverage as an individual product. Instead, they require that you have an underlying property policy. Owners of valuables may add coverage to their homeowners' insurance policy. Most of the more well-known insurers will require extra handling for high-end items.
Examples of Insurance Coverage
USAA's typical homeowner's insurance policy covers jewelry lost or stolen by fire or theft, but not accidental damage or loss. The jewelry coverage limit is $10,000, with no per-item limits. It is also subject to the policy deductible (the amount you will have to pay before your insurance coverage kicks in). A separate policy is required to provide additional coverage for jewelry.
The USAA Valuable Personal Property policy covers many types of incidents and accidents. For example, it will pay for the replacement or repair of a broken ring or the cost of a new diamond. The deductible is 0. The deductible is $0. An appraisal is not required for jewelry items insured up to $15,000, but a receipt or proof of ownership is necessary to file a claim.
Farmers Insurance follows a similar approach. For example, jewelry is covered up to $1,000 per item in a homeowner's policy and $5,000 per incident (theft or fire). Accidental damage is not covered. Farmers provide riders that cover valuable items. The insured can choose the deductible (beginning at $0). Most of the time, farmers will need a receipt or an appraisal for each covered item.
Allstate and GEICO offer similar options. Personal property coverage is limited to $500 to $2,000 for GEICO, and $1,000 to $2,000 for Allstate. Riders and floaters can be added to increase coverage or cover damage not covered by the policy.
What To Ask
These are the questions to ask when looking for the best jewelry policy.
- How are claims handled? Can you ask for reimbursement and buy a replacement, or do you have to wait for the insurance company to send you a check first?
- Is the item covered for its total replacement cost? How do you figure this out, especially if it was made to order or is an antique?
- Are coverage limits affected by the price of precious metals and gems?
- At what frequency should you submit an updated appraisal?
- Which evidence of loss or damage is required?
- What exclusions are there in the policy? What kinds of damage and loss are not covered by the policy?
Additional Tips
Before you buy your policy, and when adding to it later:
- Get your items appraised by a professional to determine their worth for insurance purposes.
- Take photos of the items.
- Consider increasing your deductible if you have the option to do so.
- All receipts, appraisal paperwork, photos, and other documents should be safe but easily accessible.
- When you're not wearing items, store them safely.
- Avoid taking irreplaceable or precious jewelry with you.
The Bottom Line:
Many insurance companies offer discounts for customers who buy multiple policies. You are more likely to receive a better deal if you buy your auto, home, life, or property insurance from one provider.
You may be eligible to buy stand-alone coverage through a provider who specializes in jewelry insurance if you don't already have homeowners or renters. These policies are often offered by jewelers or recommended companies.
Lastly, just because you protect your property doesn't mean that you shouldn't wear it. You can actually enjoy your valuable items more if you have insurance.