What items in your home are most valuable to you?
Whether we're talking about pure sentimental value or the financial value of a possession, most people would consider their personal jewelry near the top of the list. Whether it's a full collection or just an engagement ring, you may not realize it's not automatically covered under a basic homeowner's policy.
According to a 2023 survey by The Knot, the average engagement ring in the United States is valued at $5,500 – with, of course, many pieces well exceeding that value. And, of course, most people would say there are few possessions more precious to them than their wedding ring!
Many homeowner's policies have a specific sub-limit for valuable personal property, including jewelry, art, collectibles and certain electronics. That means these items are only covered up to a certain dollar amount, which may only help the owner recover a small percentage of the item's value in the event of a loss.
So how do you ensure your valuables are adequately covered by your insurance?
What is jewelry insurance?
Jewelry insurance is coverage specifically designed to protect against the loss, theft or damage of jewelry. When it comes to adding this coverage, you have some options. It can be scheduled personal property, meaning it's an add-on to an existing homeowner's or renter's insurance policy where specific items are listed along with their values. It can also be purchased as standalone jewelry insurance, a separate policy exclusively set to cover jewelry.
How do I know if I need jewelry insurance?
Generally, if you own valuable jewelry such as an engagement ring or family heirloom pieces, it may be wise to consider a specialized jewelry insurance policy due to the limited coverage provided by standard property insurance policies.
It depends on your coverage, but most homeowner's policies will only pay out a small percentage of the total value for lost jewelry. Additionally, these policies only cover specific types of loss, like theft.
Other Key Factors
Value of Your Jewelry
If a single piece of jewelry is worth a significant amount relative to your overall belongings, it's likely worth insuring.
Homeowner's Policy Limitations
Check your existing insurance policy to see if the jewelry coverage limit is sufficient for your valuable pieces.
Sentimental Value
If a piece holds significant sentimental value, even if it's not extremely expensive, insurance can provide peace of mind.
Risk of Loss
Consider your lifestyle and potential risks for losing jewelry, like active hobbies or frequent travel.
How will it impact my premiums?
Depending on the amount you need to cover, these policies are also reasonably affordable. Rates vary by insurance company and by location, but in the Indianapolis area (where Gregory & Appel has been proudly located for over 140 years!) we've seen annual premiums priced around 1-2% of an item's total value. So, for instance, a $10,000 ring may be insurable at a price between $100-200 per year in the current market.
What type of coverage should I consider?
Scheduled personal property insurance would add coverage for specific, individual high-value items or collections beyond the standard policy coverage. In many cases, you'll need to take the jewelry in question to be appraised – allowing both the insurer and insured to come to an agreement on its exact value. This schedule, a list of the covered assets, is then added to your homeowner's policy.
Each item is listed at its agreed-upon value, which may require you to provide receipts or have the items appraised to confirm their value.
Standalone jewelry insurance is separate from any existing homeowner's, renter's, or condo policy, so it can sometimes include scenarios not typically covered by homeowner's insurance. One advantage to a standalone policy is that they can offer more specialized options, tailored to the needs of jewelry owners, and may be more flexible in terms of repair or replacement options.
A standalone policy may also allow for higher limits, or add specialized coverage. It may also expand the conditions of the coverage to include accidental loss – like losing your ring at the beach – or mysterious disappearance (when you can't determine how the item was lost).
Advantages
As mentioned above, there are several notable advantages to insuring your jewelry. These include broader coverage to protect your jewelry in the case of accidental loss or mysterious disappearance, as well as agreed value meaning you'll know the exact payout in the case your items are lost or stolen.
An additional advantage is that the deductible for any listed jewelry item is $0. On a homeowner's policy, you're subject to a deductible, which would lower your payout amount.
For example: if you have a $1,000 deductible on your policy and your $1,500 wedding ring is stolen, you'll be on the hook for the first $1,000 and will only receive $500 to recuperate your loss.
What are my next steps?
If you're considering insuring your jewelry, the first thing to do would be to speak with your insurance advisor. If you're not sure who to talk to, let us know and we'd be happy to help.
If you have other valuables, you may also consider discussing coverage for additional property, such as fine art. Be sure to have a detailed discussion with your advisor to make sure your needs are being addressed.
This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice. Gregory & Appel is neither a law firm nor a tax advisor; information in all Gregory & Appel materials is meant to be informational and does not constitute legal or tax advice.