Jewelry Insurance 101: How to Protect Your Luxury Items
You may be surprised to find out just how many people assume (incorrectly) that their basic homeowner’s insurance policy is going to cover everything they own in case of some catastrophic loss or theft. While a standard homeowner’s policies can cover luxury items of special value, like jewelry – a general policy usually has per-item and cumulative value coverage limits that are fairly low.
Your homeowner’s policy might cover the loss of each individual piece of jewelry up to a coverage limit of $1K, with a total coverage limit for jewelry of $2,500. In other words, $2.5K is the maximum amount that could be reimbursed for lost or stolen jewelry, even if the actual losses were more than this amount.
Luxury items are one of the key areas in homeowner’s insurance that requires careful scrutiny. You need to know what the limits are in your policy, both for individual items and for total coverage. While the dollar amounts of coverage are often very specific, covered losses can be quite broad. Covered losses typically do not have to occur at home – so loss, damage and theft are covered regardless of where the incident actually takes place.
Determining the Value of an Item Through Appraisal
Naturally, the goal is to make sure that you have the “proper” amount of jewelry insurance. Just as it is foolish to be uninsured or underinsured, you also don’t want to make assumptions about the value of your possessions and inadvertently take out more ring insurance than you need. That old pearl brooch from Aunt Millie that she told you was worth a $10,000? It might not be worth quite that much.
Once you know for certain the limits of your policy, your next step will be to get an accurate reflection of what your belongings are worth. For items that are of “considerable value,” the best method is to get a professional appraisal. An appraisal serves two key functions, which include:
- Helping you decide how much coverage you need; and
- Providing documentation to help your claims process go much more smoothly, if there is a loss down the road.
A properly drafted appraisal from a professional describes all of the attributes of the insured item in such detail that the claims adjuster can get a fair sense of its value from the appraisal document itself. For example, anyone who has seen an advertisement for an engagement diamond knows about the “4 Cs” that determine the value of a diamond: Carat weight, Color, Cut, and Clarity. All of these details should be noted by the appraiser in their written appraisal document to help you obtain engagement ring insurance.
Jewelry Insurance Options for Special Property Protection
There are at least two ways you can add extra protection for your insured items:
For a group of items of special value, you can raise the established limits of liability for specifically named items, such as jewelry, furs or antiquarian books. When you raise the limits of liability from a standard policy, the policy’s premium will be increased.
For a single item of great value, you can create a personal property rider as an addendum to the general policy. This rider outlines specific items of significant value and establishes different coverage limits for these items. Here again, the standard policy’s premium would be increased.
If you haven’t reviewed your homeowner’s insurance recently, or need to add coverage for specific high-dollar items, consider making an appointment with an insurance with a Broker/CSR at one of DPM Insurance Group’s six office in Windsor-Essex and Chatham-Kent. They can help you identify any gaps in your protection, and provide detailed information on how your pricing would change by adding scheduled coverage for valuable household items, including ring insurance.
Substantiating the Value of Your Jewelry or Luxury Items
Carrying a comprehensive policy with appropriate coverage limits is one thing – but actually being able to collect under that policy after a covered loss in a way that is quick, efficient and as pain-free as possible is another!
When a covered loss has taken place, you may need to be able to substantiate the claimed value of your big-ticket items to the greatest extent possible. In many instances, the professional appraisal we mentioned in the section above will be enough. However, this can be expensive and time-consuming, if you have a lot of items to be appraised.
An individual professional appraisal for your private property is generally best-suited for unique or rare items, for which there is not a broad secondary market in which a value can be established. The more mass-produced or common the item is, no matter the price, the easier it is to establish its value.
It is still important to inventory the things in your house. At a bare minimum, your Home Inventory should include a list of all of the valuable items in your house – but it is also important to have photographs of your high-dollar items, and especially if the photographs can showcase any attributes of the item that add to its value for your ring insurance policy.
Many of the most valuable objects in your home may also be those that have the greatest sentimental value: your grandmother’s wedding ring, your uncle’s rare book collection, or an oil painting your sibling made before they passed away.
Insurance can protect you from financial loss and insecurity, but it cannot prevent the pain of losing something that is irreplaceable. No matter how much jewelry insurance you have, you still need to think about the physical security of your home – from fire, theft, flooding and all other potential means of loss.