Once you buy homeowners or renters insurance, you breathe a sigh of relief knowing your belongings are protected. But that’s only true to some extent.
Your standard policy normally won’t provide enough coverage for your valuables, such as your engagement ring or a family heirloom. So that means it probably won’t cover you if your wedding ring slips off your finger and down the drain.
But this doesn’t mean you have to be completely on the hook for replacing the irreplaceable.
There are a few options that can help you get more coverage for expensive jewelry. That way you don’t have to worry about the financial burden of replacements.
Find out how jewelry insurance works and how to get the right coverage for you.
What’s jewelry insurance?
A standard homeowners insurance policy includes some coverage for your valuables. This includes jewelry, antiques, artwork, and furs. But most policies will only cover valuables up to an assigned dollar limit. Standard policies tend to have a low limit for theft. Generally it’s around $1,500.
If your valuables are stolen, the insurer won’t pay more than $1,500 to reimburse you. Since the average engagement ring costs $5,680, you’d be at a big loss. To replace your ring with one of similar value, you’d have to cover the rest of the cost out of your own pocket.
You can always increase the coverage limit. But keep in mind there are still restrictions to what you can claim. It’s different for individual pieces and overall losses.
For example, limit to a claim for the loss of one piece of jewelry could be $2,000. And the overall limit would be set at $5,000. This might seem like a high number, but think about your valuables. If they were stolen, $5,000 is most likely not enough to replace everything.
The easiest way to get the most coverage for your valuables is to add a floater policy to your homeowners or renters insurance. You’ll see it sometimes referred to as scheduling an item or adding a rider. A floater policy gives you more coverage. It can even protect against accidents (like dropping your ring down the sink).
How much does jewelry insurance cost?
Jewelry insurance is pretty affordable. Usually it costs 1 to 2 percent of the total value of your jewelry. If you had a $10,000 engagement ring, it would cost $100 to $200 a year to insure it. The peace of mind you’d get by having insurance makes the low cost well worth it.
Since a floater comes with an additional premium, some insurer’s try to reduce the cost by giving out discounts.
Some insurers will even give you a discount on the additional premium if you take measures to safeguard your valuables. For example, if you store your valuables in a safety deposit box or if you have a home security system.
How to add jewelry insurance to your policy
If you have home insurance, adding a floater policy is simple.
Contact your insurer and tell the rep about the jewelry you want covered. Depending on what jewelry you have and its value, the insurer may ask for a professional appraisal and photos of the pieces before you can buy a floater policy.
Besides better coverage for your jewelry, floater policies also come with another perk. You don’t have to pay a deductible.
If you don’t have home insurance, don’t panic. It takes a few minutes to get a quote. When you do, you can opt to add a jewelry insurance floater to the policy.
Getting an appraisal for jewelry insurance
For your valuable pieces, an appraisal is likely needed. How much each piece is insured for is dependent on its value at appraisal. It’s not based on what you paid at retail.
An appraisal states the value of the jewelry. It contains a detailed description of the piece, the stone’s clarity, cut, and metal quality.
Give a copy of the appraisal document to your insurer. This’ll come in handy if you have to file a claim.
Market fluctuations can cause your jewelry’s value to increase and decrease. Get your valuable pieces appraised every two to three years to make sure your jewelry is properly insured.
Make sure you go to a reputable appraisal firm. It’s best to ask your insurer for recommendations. You can also visit the National Association of Jewelry Appraisers.
Are specialty jewelry insurance policies worth it?
Buying a floater is one of the easiest ways to protect your valuables. But it’s not the only way to get coverage.
Another option is to buy insurance through a specialty company. Some of them have stand-alone jewelry insurance that is more comprehensive than the coverage from your home insurance policy.
While useful, home insurance policies with floaters only cover some risks, such as theft. If you lose your jewelry, chip a stone, or if a necklace breaks, you likely aren’t covered. Specialized jewelry insurance has fewer gaps in coverage.
Stand-alone policies have other benefits, too:
Higher coverage limits
By adding a floater to your homeowners policy, there may be caps on how much you can insure.
Specialty insurers tend to have higher limits. A stand-alone policy might be better if you have valuable pieces or a vast jewelry collection.
If you file a claim through your home policy, you have to pay the deductible.
Most homeowners policies have high deductibles. Some are as high as $2,500! So you’re on the hook for that cost before your insurance kicks in. But this is only if you’re insuring your jewelry through your standard homeowners policy and not through a separate floater policy.
Specialty jewelry insurance policies have flexible deductibles. You can opt for a policy with a $0 deductible. This way you get reimbursed for the total cost of your jewelry’s appraised value.
Impact of claims
Jewelry loss and theft is common. This could cause you to file more claims. With a standard homeowners policy, too many claims can raise your premiums. It can also cause the insurer to drop your jewelry coverage.
Specialty jewelry insurance claims, on the other hand, have no impact on your other insurance coverage. You can file a claim without worrying about your homeowners premium skyrocketing.
Stand-alone jewelry insurance tends to be more expensive than adding a floater to your homeowners insurance. But that’s because it’s more comprehensive. If you decide to go this route, you’ll have to appraise each piece you want to insure.
Protecting your valuables
Whether you have a treasured bracelet or an antique ring you love, jewelry insurance can give you protection and peace of mind at a minimal cost. To get coverage, contact your insurer to add a rider.