Should you insure your valuables against theft?
If you are a risk-averse person who needs safeguards in place when things go wrong, you may want to consider getting an insurance policy to cover your jewelry and diamond rings.
As a consumer advocate, one of the problems I frequently come across is that claimants don’t get what they expect from the insurance companies when tragedy strikes.
In fact, many of them only realized they were insufficiently covered after filing a claim.
To be clear, the insurance industry is typically filled with pages of legal jargon and most consumers don’t completely understand what they are buying. In this write up, I hope to offer some useful tips to help you select the best type of policy that suits your needs and required level of protection.
First of all, you should start by reviewing your homeowners or renters policy. It is very likely that you already have some kind of cover for personal property – like jewelry – under the policy.
If the current value of your jewelry far exceeds the maximum coverage offered, it may necessitate a separate policy to provide adequate protection.
When choosing a jewelry insurance company to work with, one of the things I look out for is their ability to give clear explanations about their policies and the type of liability they can take on.
In sales pitches, some agents may hold back on certain technical information which they expect you to read in the contract’s fine print. That’s why you always need to pay attention and read through the fine print carefully.
If there are any clauses you aren’t sure about, make sure you clarify them. If a company is not willing to explain the technicalities of their policies in a transparent and concise manner, look for another company that does.
Once you’ve chosen a company to work with and agreed on a policy, the next step is to find an independent appraiser to evaluate the value of your diamond jewelry. This is an important step especially if you intend to get a “Replacement Value” type of policy.
Why so? Let me give you a hypothetical scenario. If the company evaluates your jewelry and sets the appraised value at $20,000 when the true value of the jewelry is only $12,000, you can expect to get overcharged on your premium.
In the event of you lose your jewelry, the insurance company may get a replacement deal that is far below the set value, say for example $12,000. What is worth $12,000 in retail may only cost the insurance company $8,000 to replace.
This means that the insurance company actually profits at your expense on both ends!
That’s why it is always advisable to get an independent appraiser to make sure the value of your jewelry has been accurately assessed. This will also ensure you are paying the correct amount of insurance premium for its replacement value.
1) Will the policy cover accidental loss and theft?
2) Are items lost during travel covered?
3) Do you need to have the piece of jewelry appraised?
4) In a loss, is the item replaced or is there a cash option?
5) Are there any kinds of deductibles?
6) Is there full value coverage on the item?
7) What are the fine-print clauses on jewelry care?
Lastly, there’s one final question you should ask yourself: is it really worth it to insure an item? Does it make economic sense to buy insurance for a jewelry piece which only costs $3,000? Would it be worth paying monthly premiums or would you be OK to replace the jewelry at your own costs?
Personally, I have never seen a need to purchase insurance for all the diamond rings I own. That’s because I live in a safe neighborhood and even if my wife lost a $10,000 ring, it is something I can replace with no financial difficulty.
With these tips in mind, I hope you are now better equipped to selecting the best insurance policy for your diamonds and jewelry. If you have any questions, feel free to leave a comment below.<< Prev Page