Jewelry insurance has a variety of forms, so it’s important that for detailed advice on insurance cover you should see an insurance agent. However, it’s good to have some sort of knowledge about jewelry insurance so you know how it works and can ask relevant questions. You need to get all the right information before you insure, not afterwards.
An understanding of insurance for jewelry starts with learning how unscheduled and scheduled property differ.
Unscheduled property (jewelry isn’t listed specifically) is frequently included with basic home owners or renters policies. An appraisal isn’t normally needed for this type of cover, but keeping receipts and photographs can help as evidence of ownership and of value.
Scheduled property (jewelry is listed specifically) is usually included in a rider, endorsement or floater to the home owner or renters policies. Insurance for jewelry can also be obtained by a separate policy from a jewelry insurance company. In the case of scheduled property, an appraisal is needed as it describes the item of jewelry and gives the ‘insured value’.
If you file an insurance claim, the settlement process and amount paid will depend on the policy and in particular, if the policy allows replacement or agreed value settlement. For agreed value policies, the settlement amount is stated in the policy whereas replacement value allows the insurance company to replace your jewelry or make a cash settlement based on the insurance company’s cost to replace your item. The insurance company’s liability ceiling is set at the “insured value” on the appraisal.
Do you have enough jewelry insurance? The answer depends on what kind of policy you have, the “insured value” is on the appraisal, the settlement procedure is for your particular policy, and the accuracy of the information on your appraisal. If you have a jewelry item valued at more than the $1500, you should definitely consider scheduled as opposed to unscheduled coverage.
The critical issue for scheduled property coverage is the how accurate is the information on the appraisal.
If the appraisal information is quite general and vague, the insurance company might replace an item with a similar one of lesser quality and value. Ensure that the appraisal is both accurate and detailed.
If the appraisal value is higher than it should be, you may not be covered for that amount. This could happen if you paid more at a retailer than the item sold for in other retailers. They could have given you an appraisal that was artificially high. The appraisal value does not need to be greater than 150% of the item’s price at a competitively priced retailer online.
If the appraisal value is too low, the insurance company can make cash settlement that might not cover the current replacement cost of the item. This could be the case for items purchased three or four years ago from a low price online retailer and the appraised value was at or below the purchase price. With diamond prices increasing about 10% a year recently, it does not take long for appraisal values to be out of date if too close to online retail purchase prices. Be sure to have your jewelry insurance appraisal updated every four or five years so you do not end up underinsured.
Visit Sarah Carter’s site to find out more information on jewelry, particularly choosing a wedding ring and also wedding ring sets.