Watches: Jewelry Or Timepiece?

Whether a watch is considered jewellery for insurance purposes depends on its design, materials, and context of use. Luxury and designer watches, such as Rolex and Tag Heuer, are often considered both functional tools and decorative fashion accessories, much like jewellery. These high-end watches are crafted with superior artisanship, precious materials, and intricate detailing, contributing to their high price tag and exceptional quality. On the other hand, simpler and more affordable watches designed primarily for practical use or digital watches are less likely to be classified as jewellery.

Luxury watches as jewellery

Luxury watches are often considered jewellery, especially when they are designed with an emphasis on aesthetics and craftsmanship, incorporating precious metals, gemstones, and intricate detailing. These timepieces can be seen as functional tools and decorative fashion accessories, akin to other pieces of jewellery. The primary function of a watch is to tell the time, but many individuals also view them as fashionable items that can elevate an outfit.

High-end watch brands such as Rolex, Patek Philippe, Audemars Piguet, and Omega are renowned for their superior craftsmanship, precious materials, and rich history. These brands blend tradition and innovation, creating timepieces that are both functional and beautiful. For example, Rolex watches are known for their precision, durability, and prestige, often featuring premium materials like 18K gold and platinum. Similarly, Patek Philippe is recognised for its intricate mechanical watches with timeless designs and complex complications.

When it comes to insuring luxury watches, it is important to note that standard home insurance policies typically provide limited coverage for expensive watches. Therefore, it is recommended to get a specialised watch insurance policy or add a rider to your existing policy to ensure adequate protection. The cost of watch insurance is generally based on the value of the watch and can range from 0.5% to 2% of its appraised value per year.

In conclusion, luxury watches can be considered jewellery due to their aesthetic appeal, precious materials, and high craftsmanship. Their monetary and sentimental value makes them worthy of insurance, providing peace of mind and financial protection in case of loss, theft, or damage.

Standard insurance policies

Standard home insurance policies typically include coverage for jewelry and personal belongings, up to a specified dollar limit and minus any deductible. However, there are special limits of liability for certain items, meaning that the insurer will not pay more than the amount specified in the policy. One important limit is for the theft of jewelry, which is generally set at $1,500.

If your watch is worth more than your policy's sub-limit, you may want to schedule the watch separately, also known as adding a rider to your policy. This involves "scheduling" your personal property, allowing you to insure them for their full value, including in the case of theft.

Another option is to purchase a "floater" or "endorsement" policy, which insures a watch outside the limits of your home insurance policy. Floaters offer broader protection as they cover losses of any type, including accidental losses such as dropping your watch down the drain or leaving it in a hotel room, which your homeowners insurance policy will not cover.

If you own valuable jewelry or other items that would be difficult to replace, you can increase coverage in two ways: by raising the limit of liability or scheduling your individual pieces through the purchase of floater policies. Raising the limit of liability is the cheapest option, but there may be a limit on the amount you can claim for the loss of any individual piece. Scheduling each piece may cost more in premiums, but it offers broader protection.

Before purchasing a floater, the items covered must be professionally appraised. Additionally, some insurance companies require an appraisal if your watch is valued at $5,000 or more.

Specialised watch insurance

Watches are a fashion statement and an investment. Some high-end brands like Rolex or Omega can cost tens of thousands of dollars. If you own a luxury watch, you may need to get a specialised insurance policy to protect your pricey timepiece. This is where a personal articles policy will come in. It is a luxury watch insurance plan that protects your watch from all perils, including theft, loss, damage, and mysterious disappearance.

Best Overall: Jewelers Mutual

Jewelers Mutual has a long-standing history of providing excellent jewellery and watch policies since 1913. It gets a superior financial rating from AM Best and has consistently done so for the past 37 years. The company doesn’t require your personal info for a quote, and you can apply online without an appraisal. You can also choose your own jeweller for repair or replacement.

Best at Processing Claims: Hodinkee Insurance

Hodinkee is backed by insurance powerhouse Chubb and has been specialising in luxury watch insurance for 11 years. They provide 24/7 support, and you can make a claim from anywhere in the world. Hodinkee policies don’t have a deductible, making it easy to understand the policy. They insure items based on a watch make and model, and you only need an appraisal if the timepiece is valued over $100,000.

Best for Large Collections: BriteCo

BriteCo will insure watches valued up to $150,000 or collections valued up to $500,000. Their insurance provides for 125% replacement value, accounting for any increases in value from your last appraisal. You will need a certified appraisal valuation to obtain the insurance. BriteCo has a zero-deductible policy, so you won’t pay out of pocket when you make a claim.

Best Low-Cost Coverage: GemShield

GemShield is a low-cost provider with zero-deductible options. You can get a deductible as high as $1,000. It does require an appraisal for pieces and collections valued over $5,000. GemShield offers worldwide, comprehensive coverage with only the most common exclusions. Mysterious disappearance is covered.

Best All-Risk Coverage: Lavalier

Lavalier Jewelry Insurance provides all-risk coverage for any insured item. This means that you have coverage for almost any peril imaginable from anywhere in the world. Lavalier does limit its coverage to $50,000 per piece and $150,000 for a collection. Getting a quote takes about one minute, and coverage can be obtained in under 10 minutes.

Watch insurance costs

The cost of watch insurance varies depending on the value of the watch, the location, and the deductible chosen. On average, watch insurance costs between 1% and 2% of the watch's appraised value. For example, a $5,000 watch would cost around $70 per year to insure in San Diego, California, with a $0 deductible. On the other hand, a $50,000 watch might cost approximately $1,350 per year to insure in Brooklyn, New York, also with a $0 deductible.

It is worth noting that some insurance companies offer a range of deductible options, allowing customers to lower their premiums by raising their deductible. Additionally, insurance companies may provide discounts for secure storage of jewellery or having a home security system in place.

Standalone watch insurance policies typically provide coverage for "mysterious disappearance", meaning that if the watch is lost, the insurer will pay for a replacement. This type of coverage is usually not included in homeowners or renters insurance policies, which often have lower limits for jewellery and watches, typically around $1,500.

When considering watch insurance, it is essential to compare quotes from multiple insurance providers and carefully review the coverage options, exclusions, and customer satisfaction ratings. Some companies may also offer convenient features such as online quotes, applications, and claims, as well as the ability to choose your own jeweller for repairs or replacements.

Protecting valuable watches

Watches are a significant investment and, as with any valuable item, it's important to take precautions to prevent damage or theft. Here are some ways to protect your valuable watches:

Get a Safe:

A safe is an excellent way to keep your watches secure and give you peace of mind. When choosing a safe, consider its size and capacity to ensure it can accommodate your watch collection. Look for security features such as biometric fingerprint scanners, digital keypad codes, reinforced locking bolts, and pry-resistant doors. Fireproofing and water-resistant features are also essential to protect your watches from potential hazards.

Invest in a Quality Watch Box or Case:

A high-quality watch box or case provides individual protection for each watch and prevents them from moving around. The original box is ideal, as it offers the best storage design with an interior pillow or cushion. If you don't have the original, opt for a good-quality box with dividers to separate the watches. Automatic watch owners can also consider a winder box to keep the internal mechanisms working when the watch is not being worn.

Maintain a Consistent Cleaning Schedule:

Regular cleaning is crucial to keep your watches in optimal condition. Use a soft, lint-free cloth to wipe down your watches, and consult your watch's manual or seek professional advice for a deeper clean. For leather straps, dip them in a soapy solution, brush, and rinse with clean water before air-drying.

Rotate Your Watches Regularly:

Wearing the same watch daily can lead to excessive wear and tear, affecting its condition and value. Rotate your watches to preserve their appearance and maintain the intricate movement mechanisms.

Be Mindful of Your Activities:

Avoid wearing valuable watches during strenuous physical activities or situations where they could be exposed to impact, abrasion, extreme temperatures, or harsh elements. Store your watches away from direct sunlight, extreme temperatures, and humidity to prevent damage to their delicate components.

Get Regular Maintenance:

Take your watch to a professional for servicing every three to four years. Have the water resistance tested after each battery change, as the act of changing the battery can compromise the water-resistant seal. For quartz timepieces, consider a full service after each battery change.

Keep Your Mechanical Watch Wound:

Mechanical watches need to be rewound regularly to maintain accurate time. Unscrew the crown and turn it clockwise until you feel resistance, then turn it back a few turns to reduce strain on the mechanics.

Protect Your Watch from Magnets:

Keep your watch away from common electromagnetic devices such as televisions or laptops. "Anti-magnetic" watches are available, which include technology to prevent damage from magnets.

Store in a Dry Place:

Humidity and dust are the main dangers when storing your watches. Keep them in a dry place, away from the bathroom, and use acid-free tissue paper to prevent scratches. Avoid using bubble wrap as it can retain moisture, leading to rust or other damage.

Consider Insurance:

Watches are often covered under homeowners, renters, or condo insurance policies, but there may be sub-limits for jewelry or watches. If your watch exceeds these limits, consider scheduling it separately by adding a rider to your policy or purchasing a standalone watch insurance policy.

Frequently asked questions