An important thing to think about as an owner of fine jewelry is how and if you want to insure your precious jewelry. This is even truer if you travel a lot, live in an area where theft is not uncommon, or if there are other specific risk factors. Many people mistakenly rely on their homeowners insurance to cover loss or theft of their fine jewelry. There are many reasons why this is not wise. Most homeowners’ policies only cover theft, not loss or damage!
Generally unscheduled (unspecified) items such as jewelry will only be compensated up to a maximum of $1,000. Homeowners policies have notoriously high deductibles, often $500. Often a policy will only cover theft or loss from inside the house and will not cover travel. Because this type of coverage does not require items to have been appraised, you should keep receipts, photos and/or written descriptions in order to prove you owned the jewelry in question and so that the insurance agency can try to accurately estimate their replacement value.
Important Facts about Jewelry Insurance
A wiser option for heavy travelers, or for those with jewelry valued at more than $1,500, is to insure it specifically. In this instance, there are two main options for how to insure the jewelry. The first option is to add a floater, rider or endorsement to your homeowners or rental insurance policy that lists the jewelry specifically. Then, your jewelry becomes "scheduled property" and is more fully covered.
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You should still make sure that your jewelry is covered for all the contingencies which may be important to you (theft, loss, damage, travel, etc). Make sure that the policy is still worthwhile for you after taking into account any deductible that might exist. Accurate appraisal of your jewelry is incredibly important. Most policies will allow your insurance to decide if they wish to replace the item, or if they wish to give cash compensation. If the appraisal is too high, you will pay high premiums, but in the end will just be given a replacement which your insurance purchased for less than the amount for which you were insured.
If the appraisal is too low, you will simply be given cash - but not enough to replace the item. Appraisals need to be updated. The cost to replace your fine jewelry will change over the years. Scheduled items are insured for the amount they were appraised, and if it is cheaper for the insurance to give you cash, they will; you will have to fork up the difference yourself if you want to replace your fine, fashion or designer jewelry.
Because of the special issues involved with jewelry, many owners of fine jewelry prefer to use an insurer specializing in jewelry insurance. Many policies issued by jewelry insurers will resolve the issues listed above by employing special clauses. One example might be if your policy allows you to decide if you want cash reimbursement or item replacement. Some policies will even let you select the jeweler who will replace your lost or stolen item.
Although it is generally recommended to have your jewelry appraised, many jewelry insurers do not require appraisal for jewelry insured for less than $50,000. Depending on how quickly you want insurance and other reasons of convenience, this may be preferable. Many jewelry insurance policies will not require you to pay a deductible.
