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Everything You Need to Know About Insuring Jewelry

Summary

Jewelry has sentimental and monetary value, and it’s at risk for loss and theft. Your homeowners or renters policy protects your belongings—but it’s likely you’ll need additional insurance for jewelry due to policy limits and exclusions.

  • Know the difference between “actual cash value” and “replacement cost” and which your policy covers
  • Because jewelry items are typically small pieces that are worn, a lot can happen—insurance protects you from loss, damage and disappearance

Whether you have a string of pearls that has been handed down through your family over generations or you’ve just received a new watch as a gift, you know that jewelry can carry both financial and sentimental value.  

If you are wondering how to insure jewelry or how much jewelry insurance costs, you might be surprised how many factors there are to consider.  

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Does Your Homeowners or Renters Insurance Policy Cover Jewelry? 

One of the most common assumptions is that all of your jewelry is covered by a standard homeowners policy or renters policy.  Because jewelry is meant to be worn, it is small and portable — making it a target for thieves. In reviewing your homeowners insurance policy, you probably noticed that one of the covered perils is theft. 

Does this mean that all of your jewelry is automatically covered?  The answer is… it depends.. 

Yes, you are covered for theft, but your insurance policy likely has limits on what types of losses are covered and for how much. Given these limits, if something happens to your jewelry, you might only be covered for a fraction of its value.  

On the other hand, some policies specifically exclude jewelry altogether. Even a few missing pieces can add up quickly because jewelry can so easily be lost or stolen.. 

To make certain that you are covered if an expensive piece is lost or stolen, you’ll want to add it as a rider to your homeowners insurance or renters insurance policy.  

How Does Jewelry Insurance Work? 

Let’s define some important terms that will help you understand the ins and outs of jewelry insurance and find the right policy to cover your valuables

Schedule: A policy schedule is essentially a list. When you add jewelry to your policy, you might be asked to list the pieces you want covered. It’s important to make sure that you include everything, because items that are not listed might not be covered if something happens to them. 

Personal Article Floater: When you purchase additional insurance to cover high value items such as jewelry, that coverage is known as a “rider” or “floater.” Make sure that you understand what is being covered. Some insurers offer floaters to cover just one high-value item, such as an engagement ring. If you have other expensive pieces, you might need additional riders to cover those items too.

Sometimes floaters or riders will cover a single group of things, like a gun collection. In this situation, you might need separate riders to cover your jewelry, your gun collection and so on.  

For expensive jewelry items, your insurer may require you to get an independent appraisal to verify the value of the pieces you are insuring.  

Talk to your agent and explain exactly what you own to determine what type of policy riders you will need. 

Actual cash value vs. replacement cost: These are important terms to understand when it comes to insurance in general, and they are particularly important when it comes to jewelry. People often think that jewelry always appreciates and that the value of their pieces will go up. 

This is not accurate. While some classic pieces from well-known brands can hold their value quite well, trendy pieces and precious metals can go up or down in value. 

Actual cash value” means that if your jewelry item is lost or stolen, your insurance policy will reimburse you for what you paid for the piece — minus depreciation. This will be less than it cost to purchase the item. 

Replacement cost” means that if the piece is lost or stolen, your policy will pay the amount that it would cost to replace the piece. 

What Does Jewelry Insurance Cover? 

Jewelry insurance is designed to cover pieces that would be expensive to replace if lost or stolen, with a value that is higher than the limits set in a standard homeowners or renters insurance policy. Valuable personal property floaters or jewelry riders also frequently offer additional coverage beyond theft. 

Loss 

Jewelry can be easily lost. For example, a stone comes loose from its setting and you don’t know where it fell out. What if you take off a 12.5 carat, $400,000 ring, set it on a paper towel while you do the dishes and accidentally throw the paper towel in the trash? Perhaps an earring comes off, and you watch as it goes straight down the sink drain. Most jewelry insurance policies will cover loss of the item in these scenarios. 

Mysterious Disappearance 

Despite sounding vaguely like a mystery novel, “mysterious disappearance” coverage makes a lot of sense when it comes to jewelry.  Given that jewelry items are small, when a piece disappears, it can sometimes be impossible to determine if the item was lost, stolen or simply fell down the drain. 

Jewelry insurance policies will frequently offer mysterious disappearance as a covered loss — something that your standard homeowners insurance policy or renters policy will not cover. 

Damage 

Although normal wear and tear is generally not covered, damage usually is. If you hit your hand against something and your covered jewelry is damaged, a good jewelry insurance policy will typically pay for repairs. 

How to Get Your Jewelry Appraised

Although some insurers will accept a receipt of a recent purchase in lieu of an appraisal, there’s usually a time limit. That’s because jewelry can fluctuate in value over time. So if the item you are insuring is a recent purchase, ask your agent if a receipt will suffice. Your insurer may or may not require an appraisal. 

If your insurer does require an appraisal, you will need to find an experienced appraiser. A legitimate appraisal will happen in person; no one can assess the value of a piece without examining it closely. 

Ask friends and family for recommendations, or contact a local jewelry store and ask if they have an appraiser on staff or if there’s an appraiser the shop typically works with. There are several national appraising associations that provide training. You’ll want to seek out someone who has been certified by or is a member of one of the following:

You should expect to pay for an appraisal, but pricing varies. Some appraisers charge by the piece, while others may assess several pieces and charge a percentage of the appraised value as a fee. Ask beforehand how fees are determined. 

For each piece appraised, you should receive a document that details what characteristics of your piece were evaluated to determine its worth. For a diamond engagement ring, the appraiser should evaluate the style and metal of the setting, along with “the four Cs”:

  • Cut
  • Color
  • Clarity
  • Carat weight

You should take gemstones to a certified gemologist, who will assess similar characteristics, such as grades or the presence of inclusions.  

When is a Piece of Jewelry Covered? 

This question arises often around the holidays due to the nature of gift-giving. Buying an engagement ring or expensive necklace as a gift means that the gift-giver will have possession of the piece for a period of time before it is presented, at which point the gift-receiver takes possession.  

As previously mentioned, your homeowners insurance or renters insurance does not automatically cover expensive pieces. If you have purchased an expensive piece of jewelry or a high-end watch to give as a gift, you might wish to contact your insurance agent to discuss coverage during the interim period before you give the gift to the recipient.  

When You’re Giving Jewelry as a Gift, Who Purchases The Insurance? 

Answers to these questions may depend on factors such as whether you are living in the same household — and how your homeowners or renters policy is structured. If you are living together and have a renters policy with both names on the policy (one as the policyholder and the other as a named insured), you’ll want to call your insurer and ask about adding a rider to the policy you share. 

If you live in separate dwellings, the person who received the jewelry as a gift will need to add it to their policy. Essentially, the jewelry will need to be added to the policy that covers the place where it is kept. 

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The Bottom Line 

Whether your jewelry includes a single engagement ring or a collection of heirloom pieces from family members, it’s important to protect it with insurance coverage. There are a wide range of jewelry policy options available.  

Depending on the value of the items you wish to cover, you may need to pay to have the piece or pieces appraised, but with so many additional situations covered, jewelry insurance is well worth the effort to get an appraisal done. 

Protecting your jewelry pieces with insurance will give you peace of mind. Talk to your agent or connect with an Expert Agent today to be sure that your treasured items are protected for years to come. 

Disclaimer: 

All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Guaranteed Rate Insurance does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Guaranteed Rate Insurance. Guaranteed Rate Insurance does not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.