Once you purchase homeowners or renters insurance, you breathe a sigh of relief knowing all your personal belongings are protected. Unfortunately, that’s only true to a certain 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 in the shower.
However this doesn’t mean you have to be completely on the hook for replacing the irreplaceable.
There are a couple of options that can help you get more coverage for expensive jewelry, so 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 is jewelry insurance?
A standard homeowners insurance policy includes some coverage for your valuables, including jewelry, antiques, artwork, and furs. However, most policies will only cover valuables up to an assigned dollar limit. Standard policies tend to have a low limit for theft — generally around $1,500.
If your valuables are stolen, the insurance company won’t pay more than $1,500 to reimburse you. Seeing as the average engagement ring costs $5,680, you’d be at a significant loss. To replace your ring with one of similar value, you’d have to cover the remaining cost out of your own pocket.
You can always increase the coverage limit, but there are still restrictions to what you can claim for individual pieces and overall losses.
For example, limit to a claim for the loss of a single piece of jewelry could be $2,000, with the overall limit set at $5,000. This might seem like a high number, but think about your valuable items. If they were all destroyed or 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 — sometimes called scheduling an item or adding a rider — to your homeowners or renters insurance. A floater policy gives you more coverage and can even protect against accidents (like dropping your ring down the sink).
How much does jewelry insurance cost?
Jewelry insurance is surprisingly affordable. In general, it only costs 1 to 2 percent of the total value of your jewelry. If you had a $10,000 engagement ring, it would cost you just $100 to $200 a year to insure it. The peace of mind you’d get by having insurance makes the relatively low cost well worth it.
Since a floater comes with an additional premium, some insurance companies will try to alleviate the cost by providing discounts.
Some insurance companies will give you a discount on the additional premium if you take the right preventative 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 already have homeowners insurance, the process to add a floater policy is simple.
Just contact your insurer and tell the representative about the jewelry you want covered. Depending on what jewelry you have and its value, the insurer may require a professional appraisal and photos of the pieces before you can purchase a floater policy.
Besides better coverage for your jewelry, floater policies also come with another perk. You typically don’t have to pay a deductible before the insurance kicks in.
If you don’t have homeowners insurance yet, don’t panic — It takes just a few minutes to get a quote. When you do, you can opt to add an jewelry insurance floater to the policy.
Getting an appraisal for jewelry insurance
For your valuable pieces, an appraisal is likely necessary. How much each piece is insured for is dependent on its value at appraisal, rather than what you paid at retail.
A proper appraisal states the value of the jewelry and contains a detailed description of the piece, including stone’s clarity, cut, and metal quality.
Remember to give a copy of the appraiser document to your insurance company. This will come in handy if you ever have to claim on a loss.
Market fluctuations can cause your jewelry’s value to increase and decrease. It’s a good idea to get your valuable pieces appraised every two to three years to make sure your jewelry is appropriately insured, but some insurers have different guidelines.
Make sure you go to a reputable appraisal firm. It’s best to ask your insurance company for recommendations or visit the National Association of Jewelry Appraisers.
Are specialty jewelry insurance policies worth it?
While purchasing a floater in addition to your homeowners insurance is one of the easiest ways to protect your valuables, it’s not the only method to get coverage.
Another option to consider is purchasing insurance through a specialty company. Some insurers offer stand-alone jewelry insurance that is more comprehensive than the coverage you’d get from your homeowners insurance policy.
While useful, home insurance policies with floaters only cover certain risks, such as theft. If you instead lose your jewelry, chip a stone, or if a favorite necklace breaks, you likely aren’t covered. With specialized jewelry insurance, there are fewer gaps in coverage.
Stand-alone policies offer 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 insurance companies tend to have higher limits. If you have valuable pieces or a vast jewelry collection, a stand-alone policy may be a better option.
If you file a claim through your homeowners policy, you’re subject to that policy’s deductible.
Most homeowners policies have fairly high deductibles — some as high as $2,500 — so you’re on the hook for that cost before your insurance kicks in. This is only if you are insuring your jewelry through your standard homeowners policy and not through a separate floater policy.
Specialty jewelry insurance policies offer more flexible deductibles. You can even 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
Unfortunately, jewelry loss and theft is common, and could cause you to submit more claims. With a regular homeowners policy, too many claims can raise your premiums. It can also cause the insurance company to drop your jewelry coverage.
Specialty jewelry insurance claims, on the other hand, have no impact on your other insurance coverage. That means you can submit a claim without worrying about your homeowners insurance premium skyrocketing.
Stand-alone jewelry insurance policies tend 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 go through an appraisal for each piece you want to insure.
Protecting your valuables
Whether you have a treasured bracelet or an antique ring you love, jewelry insurance can provide you with protection and peace of mind at a minimal cost. To get coverage, contact your insurance company to add a rider.