Wedding and engagement rings, that special trinket from your travels, even investment grade stones and metals carry a lot of financial value, and often, even more sentimental value. It’s important to know that just because you have homeowners insurance, your jewelry is not automatically covered.
Most home insurance policies cover jewelry, watches and furs up to a combined limit and subject to the policy deductible. It is best to call your broker to discuss the items and whether you should schedule them. Adding a jewelry schedule to your homeowner’s or tenant’s insurance policy has several benefits, they include:
- Coverage if a stone falls out of your ring – this is the most common claim;
- No deductible applies (versus the $1,000 deductible commonly applied to claims for unscheduled property); and,
- The cost of adding scheduled jewelry to your home insurance typically ranges from 1.5 to 2 percent of its appraised value. For example, a $5,000 engagement ring could cost between $75 and $100 per year to insure. So, depending on your insurer’s rates, it’s up to you to weigh the expense against the protection it buys.
Because jewelry tends to appreciate over time as stone prices rise, insurance companies commonly require a new appraisal every five years – an outdated appraisal could mean that you could be insured for less than the replacement value, so to ensure that you’re jewelry is adequately covered, talk to your broker.
If you go ahead, some insurance companies will require an appraisal, and often, the store where you’ve purchased your jewelry will offer free appraisals and provide you with accurate documentation and accurate replacement values. Over time, the value of jewelry and gemstones can fluctuate and this information needs to be shared with your insurer immediately.
The investment professionals at Forbes Magazine suggest this seven-step coverage check-up:
- Review your current insurance coverage, homeowner’s policies have sub-limits, and your deductible applies, limiting your recovery.
- Schedule items of significant value – that is list them separately on your policy – and add valuables as acquired.
- Consider blanket coverage for your entire collection, removing the need to estimate the value of each item.
- Get an appraisal – the value of a piece of jewelry depends on many factors: condition, age, color and clarity of stones, style, and provenance (where it was bought) – and update ever 5 years at minimum.
- Create an inventory of your jewelry – keep receipts and staple them to a photograph of the item. Keep a copy of the inventory on your computer and in your safe deposit box. This will be valuable in the event of a loss.
- Store jewelry in a bank safe deposit box if you have heirloom pieces you only wear on occasion.
- Finally, take loss prevention measures, install a home security system, and periodically check for loose gems.
At Capital Insurance Brokers, our full service independent brokerage offers a wide range of insurance and risk management services in Edmonton. For more information on our jewelry schedules call us at 780-476-1600 to schedule an appointment to discuss your needs in person.