The Risk Of Insuring Jewelry On Your Homeowners Policy
Whether it’s a wedding ring purchase for the big day, an antique watch for your ever expanding collection, or an expensive gift “just because”, jewelry is something that most of us own (or will purchase) eventually. We’re all aware that we should insure jewelry; however, as an agent I am often asked the following question, which I’d pose to anyone:
Does my homeowners/renters/condo insurance cover my jewelry, or should I buy a separate policy for this?
Consider the following example:
Following a busy day at the office, Mrs. Smith notices that the center diamond from her $10,000 wedding ring set has fallen out of the setting. She has no idea when this happened, or where to even begin looking for the lost diamond. She calls her insurance company and is told the following:
- Jewelry is covered under her policy, but up to a limit of only $2,500
- Jewelry insured at this limit is only covered against items such as fire or theft only
- Since her ring wasn’t stolen, she just lost a diamond, she finds out that the policy won’t pay as the nature of the loss is classified as a “mysterious disappearance.” Even if the policy would have paid in this example, she’d still be out $8,500 as her policy would only pay up to a set limit of $2,500 as outlined in her policy. (You do read your policy right?)
This example illustrates a common coverage gap in most homeowners policies: coverage is often limited for jewelry, and even then the losses insured against are limited.
So was she covered for jewelry? Yes.
Did she have the right coverage for jewelry? No.
So what’s the best solution for insuring jewelry?
Insure Jewelry with an Inland Marine Policy Also Known As A “Personal Articles Floater.” Technically, these are called inland marine policies or a “personal articles floater.” This is a mini insurance policy that adds coverage for specific high value items, such as jewelry, iPhones, iPads, laptops, cameras, or even artwork. With this policy, you would have coverage for the scheduled piece of jewelry up to the appraised value, with no deductible in most cases. Additionally, coverage would be broadened from “named peril” (certain losses only such as fire or theft) to “all risk” meaning any type of physical loss.
So if Mrs. Smith from our prior example had scheduled her ring, then coverage would have been afforded up to the scheduled value of her ring ($10,000). Even though she didn’t lose the entire piece, she’d still have coverage for damage to the ring from the diamond falling out.
As a rule of thumb, the cost to insure jewelry is around $1.50 for every $100 that you insure. (ex: a policy for a $10,000 ring would cost approximately $150/yr). Not much considering the alternative of paying for a new $10,000 ring out of pocket, right?
In addition to a “personal articles floater,” some insurance companies allow for adding this “all risk” coverage directly on to the homeowners policy. Furthermore, some insurance companies offer additional discounts to policies that you already have (auto/home) for adding another policy for jewelry.
So here’s what to do if you have questions on insuring jewelry:
- Get your jewelry appraised – Most jewelers can do this onsite, and typically charge an appraisal fee per item. If you’re purchasing jewelry, this is often a free service for the item in question for insurance purposes
- Call your insurance agent – Ask what type of coverage you have, and ask for a quote to schedule your jewelry for the appraised value. You may have options to choose a higher deductible to lower the price (similar to car insurance)
- Ask about discounts – Just like you receive a discount for insuring your home & car together, some insurance companies add additional discounts the more policies that you have with them! Never hurts to ask!
- Don’t want to pay for an appraisal? – Ask your agent about “blanket jewelry coverage”- come insurance companies will add blanket all risk coverage for items valued at less than $10,000 without having to have an appraisal!If you’re interested in seeing how we can help cover your jewelry or important items, please feel free to contact CoVerica at 800.490.8800.