Jewelry Insurance: What You Need To Know

Jewelry insurance is a form of financial protection against the loss, theft, or damage of one's jewelry. Most insurance policies offer reimbursement or compensation in the form of a cash payout or replacement of the insured item. Jewelry insurance policies differ in their scope of coverage, with some covering only theft, while others may also include accidental loss or chipped gemstones. It is important to carefully consider the different types of jewelry insurance available, such as adding a floater policy to existing homeowners or renters insurance, or purchasing specialized jewelry insurance from companies like Jewelers Mutual Group or Lavalier. The cost of jewelry insurance is typically 1-2% of the total value of the jewelry, and factors such as the item's appraisal, recent upgrades, and additional premiums may influence the overall price.

Standalone insurance vs. floater policy

When it comes to insuring your jewellery, you have a few options to consider. One option is to take out a standalone jewellery insurance policy, which is specifically designed to protect against risks specific to jewellery. This type of policy is offered by specialist companies like Lavalier and Jewelers Mutual Group, and it covers a wide range of risks, including loss, theft, and damage. The cost of this type of policy is generally reasonable, typically ranging from 1-2% of the item's value. This option provides comprehensive protection for your jewellery and can give you peace of mind knowing that your valuables are covered.

On the other hand, a jewellery floater, or personal property floater, is a type of supplemental insurance that can be added to an existing homeowners or renters insurance policy. While these basic policies typically provide some coverage for jewellery, it is often limited to a set amount per item, such as $1,500 or $2,000. A jewellery floater extends this coverage, providing protection for valuable jewellery beyond what is included in the standard policy. This type of insurance is suitable for individuals with sizable or rare jewellery collections, as it can provide a higher dollar amount of coverage in the event of theft, loss, or damage.

One advantage of a jewellery floater is that it can be tailored to cover specific items, ensuring that each piece is adequately insured. To obtain this type of policy, a professional appraisal may be required to determine the value and authenticity of the jewellery. The insurance company will then set a premium price, typically around 1-2% of the item's assessed value. This allows for more precise coverage, ensuring that you are not underinsured in the event of a claim.

While standalone jewellery insurance offers comprehensive protection, it is important to consider the benefits of adding a jewellery floater to your existing policy. By doing so, you can enhance the coverage for your valuable jewellery and protect against a broader range of risks. Additionally, with a jewellery floater, you have the flexibility to work with your chosen jeweller in the event of a claim, ensuring that any repairs or replacements meet your expectations. Whether you choose standalone insurance or a floater policy, understanding the specifics of your coverage and ensuring that your jewellery is adequately protected is of utmost importance.

Actual cash value (ACV) vs. replacement cost coverage

When it comes to jewellery insurance, it's important to understand the difference between actual cash value (ACV) and replacement cost coverage. This knowledge will help you choose the right insurance policy for your needs and budget.

Actual Cash Value (ACV)

ACV is a common feature in homeowners insurance policies, particularly for personal property coverage. It reimburses you for the current value of your belongings, taking into account depreciation. In other words, ACV considers the age and condition of an item and pays out the amount required to replace it, minus the depreciation. This means that if your jewellery is insured through ACV and it gets lost, damaged, or stolen, your insurance company will pay you the amount your jewellery is currently worth, which may be significantly less than what you originally paid.

Replacement Cost Coverage (RCV)

Replacement cost coverage, on the other hand, provides you with the full amount needed to replace your jewellery with a new item of similar type and quality. This type of coverage does not factor in depreciation. For example, if you have a ring that is stolen, replacement cost coverage will pay for a new ring with similar specifications, regardless of whether the market value of your original ring has gone up or down since you purchased it.

Choosing Between ACV and RCV

The choice between ACV and RCV depends on your personal preferences, budget, and the type of property you own. ACV is often more affordable, as the premiums are lower, but it may leave you with out-of-pocket expenses if the item has depreciated in value. RCV, while more expensive, provides greater peace of mind, knowing that you will be able to replace your jewellery with a similar item without incurring additional costs.

Coverage limits

Most insurance policies have different coverage limits for individual pieces of jewellery and overall losses. For example, the coverage limit for the loss of a single piece of jewellery may be $2,000, while the overall coverage limit for all losses may be set at $5,000. It is important to note that the coverage limits may not be enough to replace all your valuables if they are stolen or lost. Therefore, it is essential to review your policy carefully and consider increasing your coverage limits if necessary.

Specialised jewellery insurance, such as that offered by Jewelers Mutual Group, typically provides higher coverage limits and covers a wider range of risks compared to standard homeowners or renters insurance policies. With specialised jewellery insurance, you can rest assured that your jewellery is protected from almost every imaginable risk, including loss, theft, or damage. These policies usually offer replacement cost coverage, ensuring that you receive the full amount required to replace your insured item, regardless of its current market value.

To increase your coverage limits, you may need to pay a higher premium. Some insurers offer discounts on additional premiums if you take measures to safeguard your valuables, such as storing them in a safe deposit box or installing a home security system. It is worth noting that stand-alone jewellery insurance tends to be more expensive than adding a floater policy to your existing homeowners or renters insurance. However, it provides more comprehensive coverage specifically tailored to protect your jewellery.

Discounts

When it comes to discounts on jewelry insurance, there are a few things to keep in mind. Firstly, it's worth noting that some companies offer discounts for certain safety precautions and preventive measures. For example, having a large safe or an alarm system can reduce your premium costs, as the risk is lower from the insurer's perspective. You may also be able to get a discount by storing your jewelry in a bank vault or safe deposit box, or by getting a gemstone grading report. Some companies, like BriteCo, offer a discount for paying your insurance premium annually instead of monthly.

Additionally, it's worth asking your insurer about any other potential discounts. For instance, Jewelers Mutual offers a discount for policyholders who continuously keep their jewelry insured without a lapse in coverage for four or more years. They also offer discounts for eligible alarm systems and bank vault or safe storage. Similarly, Lavalier provides jewelry insurance with various discounts, including those for home alarms, safes, gemstone grading reports, and bank vault storage.

It's important to note that discounts may vary depending on the insurance company and your specific policy. Be sure to review the terms and conditions of your jewelry insurance policy carefully to understand any applicable discounts and how to qualify for them. It's also a good idea to regularly review your policy, as some companies may introduce new discounts or change their existing ones.

Appraisals

When it comes to insuring your jewellery, appraisals are an important part of the process. An appraisal will account for all the key elements that determine the value of your jewellery, including carat weight, cut, colour, clarity, and quantity of diamonds; types of metal and weight; shape and carat weight of other stones; and any distinctive markings, model numbers, or stamps. Current retail prices in the regional market, the origin of the materials used, and the craftsmanship of the piece are also taken into account.

Most insurance companies will require an appraisal for higher-value pieces (for example, rings worth $5,000 or more), while an invoice or receipt may be sufficient for less expensive items. Having jewellery appraised at the time of purchase ensures current market prices are reflected and distinct characteristics are accounted for. If your centre stone is around half a carat or larger, your jeweller will often provide a diamond certificate or grading report from an independent gemological laboratory.

It is important to have your jewellery reappraised every two to three years for insurance purposes, as its value will likely have increased since its purchase. Reputable appraisers will retain a copy of your original appraisal and can work from that, cutting costs. If you ever need to make a claim, an accurate and up-to-date appraisal is the best way to ensure you are protected for the full value of your jewellery.

Specialised jewellery insurance companies, such as Jewelers Mutual Group, employ jewellery experts that can use your most recently submitted appraisal to help your chosen jeweller recreate an exact match of your original piece. This means you don't have to worry about explaining every detail of your jewellery when making a claim.

Frequently asked questions