Is Jewelry Insurance Worth It?

Whether it’s your wedding ring, engagement ring, or a family heirloom like your great-grandmother’s gold locket, your jewelry likely holds more than just sentimental value. Rings, necklaces, earrings, etc., can be small yet mighty assets, carrying far more than their weight in monetary value. But unlike our homes, cars, and even cellphones, many of us might not recognize the potential importance of an insurance policy.

Should you insure your jewelry? Generally speaking, anything that involves a significant financial risk is something that you want to consider insuring. And your insurer might consider jewelry to be outside the realm of personal property coverage. But without legal requirements or common practice guidelines – as are typically available for cars and homes – choosing to insure your jewelry is a multifaceted decision.

Here’s what to weigh when looking for the best jewelry insurance, including what’s already covered by your renters or homeowners insurance and the total value of your jewelry.

Checking Your Homeowners Insurance Policy

If you’re contemplating an insurance policy for your jewelry and already have homeowners or renters insurance, your first call should be to your insurance company. Many homeowners or renters policies will offer limited coverage on jewelry.

If you find your policy will cover jewelry, your next question should be, “how much is covered?” Coverage varies based on policy and insurer, but some insurance policies cover upwards of $7,500, while others may cover a few hundred dollars, if anything at all. It’s important to know what’s in the fine print of your insurance coverage.

If you do have jewelry coverage, your next question should be, “what’s covered?” Some policies may cover a plethora of circumstances, including theft or partial damage, while other policies may not cover jewelry that was lost or misplaced.

In addition to the “what,” you’ll also want to determine the “how” of your coverage; in other words, what happens if you file a claim? Will they pay for you to have an exact replacement made? Do you have to work with a specific jeweler of their choosing? How do they determine the replacement value? Will they reimburse you for the value of the item at the time of purchase or will they include appreciation or depreciation in their payment? All of these questions should guide your final decision.

What if your policy doesn’t cover jewelry, or if the existing policy only offers minimal coverage, making it inadequate for your needs? If so, you might still want to consider starting with your homeowners insurance policy provider.

Usually, policyholders can add extensions or riders to their policy, and these extensions will cover valuable possessions, including jewelry. Further, insurance companies also typically award customers that purchase multiple separate policies, also known as bundling, by providing deep discounts. In this case, a jewelry policy through your existing insurer may save you both time and money.

Jewelry Insurance Policies Without Homeowners Insurance

If you don’t have homeowners insurance, there’s no need to run out and purchase a policy simply to insure your jewelry. Instead, many major insurance companies, like Geico, State Farm, and Nationwide, offer jewelry-specific policies. However, you can also choose to insure your jewelry through a company that specializes exclusively in jewelry insurance, like Jewelers Mutual and Lavalier, both of which offer standalone jewelry policies.

Consumers who have a considerable amount of wealth invested in jewelry alone might want to consider a known player in the jewelry insurance industry. Many of these companies have coverage that exceeds what is offered through homeowners policies and includes a host of circumstances like loss or disappearance both in your home or abroad.

Keep in mind that in some cases, particularly when it comes to a wedding band or engagement ring, individual jewelers may offer warranties. These typically don’t cover theft or loss, but many cover regular cleanings and repairs, particularly when damage is due to poor craftsmanship or a default in the material. But you still might consider whether you need ring insurance.

The Case in Favor of Jewelry Insurance

If you have valuable jewelry and it’s not covered by a homeowners or renters policy, then jewelry insurance can provide peace of mind as well as protection against theft, damage, and in some cases, even disappearance or loss. For the most part, policies are fairly affordable, with most costing between 1 and 2 percent of the value of the insured jewelry. This is particularly true when you are able to bundle it with an existing policy, which will bring down the cost.

If you are considering a jewelry policy, it’s important you gain a thorough understanding of exactly what is covered and how it’s covered. For example, if you (and your prized possessions) frequently travel, then you’ll want to ensure your policy covers your jewelry domestically and internationally.

Further, always make it a point to find out how repairs and replacements are executed. For example, if you have a hand-crafted, customized piece, will your insurance cover the price of an exact replica or will you be forced to go with something that’s merely comparable? A replacement cost policy is often more straightforward and pays out for the price of what it’ll cost to replace the item. Whereas an actual cash value policy might fall short of what you need, leaving you to pay something out of pocket.

The Case Against Jewelry Insurance

Jewelry insurance isn’t for everyone, and that’s particularly true if the value of your existing jewelry does not exceed the amount covered by your renters or homeowners insurance policy. If you’re not insuring a significant amount of expensive jewelry, then you will likely want to consult your insurance company to find out about a “valuables” rider that covers everything from jewelry to artwork.

Additionally, though insuring a valuable asset is often recommended, even with an insurance premium at 1 to 2 percent of the value, a jewelry policy can add up, making it another significant bill on top of existing insurance, mortgage payments, etc. In that case, you may want to consider insuring the most expensive pieces separately, allowing your homeowners insurance to cover the rest.

Buying an insurance policy, regardless of the asset, requires a great deal of research and comparisons, and purchasing a jewelry insurance policy is no different. In the end, the best decision is one that considers the costs and benefits of a policy, as well as the risks associated with not having one.

For that reason, there is no one set answer to the question of whether or not a jewelry insurance policy is worth it. In the end, the answers are entirely dependent on your personal preferences, the amount of jewelry you have, the value of that jewelry, and your current financial situation.