Every year, thousands of items of jewelry are stolen. Many more suffer other types of losses or damages. Other valuable items such as fine arts are often at risk, as well. These simply are not risks that a typical or homeowners insurance policy contemplates. Clearly, however, they are risks which must be insured against. What do you need to know about jewelry insurance?
Your renters or homeowners policy absolutely excludes coverage for jewelry and certain other valuable items beyond a very small limit, often as low as $1,000 for loss by theft. You’ll want to make sure you have the right coverage, and that you keep it updated.
Smaller Items Of Jewelry Can Be Endorsed Onto A Renters Insurance Policy
While this can vary by state and underwriter, you’ll often be able to endorse smaller items of jewelry onto your renters or homeowners insurance policy. The limit could be as low as $5,000 of coverage, and you’ll want to be sure that you have enough personal property coverage overall to account for the jewelry as well as for your personal property.
In order to insure jewelry on a renters insurance policy, you’ll want to have some proof of the value. It may not be necessary to issue the endorsement and put the coverage into force in all cases, but it will absolutely be necessary to prove ownership and value if you need to make a claim.
If in doubt, your best bet will frequently be what’s called a personal articles floater for jewelry insurance, also known as an inland marine policy. Why? We’ll get to that in a moment.
Valuable Items Coverage And Jewelry Insurance Is Normally Issued On An Open Perils Basis
When you purchase a personal articles floater or inland marine jewelry insurance, you’re purchasing a policy which offers protection against “risk of direct physical loss” for a specified item or items. Let’s break that out quickly, so you can see what you’re getting with your jewelry insurance.
What Are You Insuring?
Your jewelry insurance will cover specified items named in the schedule made a part of the policy. Only those items are covered, and only at the value indicated. The value is generally determined by an appraisal of the value of the item, excluding any taxes.
In order to insure jewelry or other valuable items, the appraisal is necessary to set the value. In addition, you should have the appraisal updated every few years to ensure that you have enough coverage to replace the item if lost, stolen, or other damage is suffered.What Does “Risk Of Direct Physical Loss” Mean?
Well… Unlike some terms in the world of insurance, “risk of direct physical loss” means exactly what it says when it comes to jewelry insurance and valuable items floater policies. In other words, you’re insuring against any cause that would damage or cause loss to the jewelry, save for the exclusions of the policy.
This is called “open perils” coverage, and means that whatever causes the loss, so long as it’s not excluded, there is likely to be coverage. Exclusions are limited and obvious, such as nuclear hazard. In the event of a loss caused by nuclear hazard, to be honest, you’ve probably got bigger problems than what your Renters Insurance or jewelry insurance covers.
What Happens When There Is A Loss Under Jewelry Insurance?
If you have jewelry insurance in the form of a personal articles floater, the policy is designed to make you whole after the loss. Depending on the loss, there are a few things that could happen:
- Repairs of the damage, if possible and practical
- Replacement of an item of a pair or set
- Replacement of the pair or set (in which case the insurance company would own the remaining items in the original pair or set, as to do otherwise would do more than make you whole)
- Replacement of the item up to the insured value
Jewelry and losses both vary widely, but as you can see the policy is designed to return you to the financial condition you were in before the loss, subject to the policy limits.
Why Is It Called A “Floater” Or An “Inland Marine” Policy?
Valuable property which was easily movable was originally transported by boat, hence the name. Property insurance, of course, generally covers property which is stationary. Inland marine coverage is designed to cover property that is movable.
A floater policy simply sits on top of your renters insurance policy. There are a number of other kinds of inland marine coverage, mostly commercial. Personal property that is movable and valuable needs floater or inland marine coverage, because it’s not something that generally remains in your home. You wear your jewelry when you leave the house, for instance.
How Much Does All Of This Cost?
Jewelry insurance is surprisingly affordable. Pricing is dependent on your location because of increased risk in larger cities, for example. Prices are tiered based on the value of the item, as well. A fifty thousand dollar ring is somewhat more expensive to insure than a five thousand dollar ring, for obvious reasons.
Nationally, most people find that they’ll pay between fifteen and twenty dollars per thousand dollars of coverage, per year for jewelry insurance. It can vary, of course, but that’s a fair average. The best way to find out is to submit an appraisal to Effective Coverage and find out just how easy and affordable it can be to insure your jewelry!
Just call (800)892-4308 to speak with an insurance expert.Photo Credit: Derek Springer Proposal 014 CC BY SA 2.0
Photo Credit: Mark Guim The Ring CC BY 2.0