At first, a jewelry insurance policy might seem straightforward. After all, it covers the loss, theft, or damage of your jewelry, right? But many small clauses can determine whether you ever see a settlement when you make a claim on your insurance. Here are a few of the insurance policy points you should look out for when you’re getting ring insurance. Choose an insurance policy for your engagement ring, family heirloom, wedding band, or any other valuable jewelry.
In jewelry insurance, “mysterious disappearance” is defined as missing jewelry with no explainable reason for when, or how it went missing. When your jewelry goes missing, but you can’t remember if you misplaced it, or if perhaps it was stolen.
You might have taken your ring off at the gym and left it in your locker. Then when you get home you can’t remember if you put it back on at the end of your workout, but it is never found at the gym. So perhaps it was stolen from your locker. You might have an antique brooch that you rarely wear. It stays in your jewelry box on your dressing table in your bedroom. Then when a special occasion comes around, and you want to wear your brooch, it is no longer in the jewelry box, and can’t be found. It may have been stolen without your knowledge, or you might have put it somewhere else. But you could have sworn it had been there! That’s called mysterious disappearance. When taking out a jewelry insurance policy, check to see that mysterious disappearance is covered.
Believe it or not, when it comes to jewelry insurance policies there is a difference between loss, accidental loss, and mysterious loss. When a piece of jewelry is lost due to no fault of the owner it is considered an accidental loss. For example, if you’re on a boat that capsized and your pearl necklace breaks casting your pearls on the water; if your earring falls down the sink, or your watch slips off your wrist. For it to be considered accidental loss the jewelry must be unrecoverable or damaged beyond repair. Only if your jewelry insurance policy includes accidental loss will you be compensated.
Some insurance policies state which geographical area, or even which city, or house the policy covers. For example, if you add your jewelry to your homeowners insurance the jewelry might only be covered if it is lost or stolen from your property. Not only that, but many stand-alone jewelry insurance policies do not cover loss, theft, or damage that happens to your jewelry when you are outside your country. Make sure your jewelry insurance policy includes worldwide coverage.
Appraisal and Reappraisal
When you first get your jewelry insured you will need to have it appraised. But what happens in the coming years, if the price of precious metals goes up or if the value of diamonds changes. As the price of gold and other precious metals fluctuates, and as the price of precious gems fluctuates, the value of your jewelry will change. Even inflation can affect the value of your jewelry.
Some jewelry insurance providers will require you to have your jewelry regularly reappraised and notify the company of any change in the value of your jewelry. Appraisers and insurance companies recommend that you have your jewelry reappraised every two to five years. So why is it important to have a correct appraisal of your jewelry? Getting the correct value of your jewelry is important so that you can have it adequately covered by insurance.
If you had your ring appraised at $300 in 1970 and you took out an insurance policy and never had it reappraised. Then in 2023, the ring was stolen; you would be compensated for the original appraisal value – $300. Which would not be enough to replace your ring in today’s jewelry market.
Appraisal Value vs. Replacement Value
If your insurance policy promises you the appraised value of your jewelry in the event of a claim, you will get compensation for the appraised value. But this might not be enough to replace the jewelry with an item of the same type or quality. Make sure your jewelry insurance policy covers your jewelry for the replacement value. Some excellent jewelry insurance providers will offer replacement cost coverage for 125% of the jewelry’s appraised value. So that you can have peace of mind knowing you will be able to replace your lost, stolen, or damaged jewelry with a comparable piece.