An average engagement ring costs nearly $6,000, and heirloom pieces and other kinds of jewelry could have significantly higher values. And while jewelry remains a top choice for thieves, most stolen jewelry is never recovered by law enforcement.
What’s more, this valuable property is often not adequately covered under the theft victim’s homeowners or renters insurance, leaving huge out-of-pocket costs for replacing an item that is stolen, lost, or damaged.
Here’s how to make sure you have enough jewelry insurance coverage for your treasures.
The average cost of an engagement and wedding ring set in 2014 was $8,000 ($6,000 for the engagement ring and around $2,000 for the wedding bands). Other precious items you own can be just as pricey—if not more—to replace.
According to the FBI, only 4% of jewelry is recovered after being reported stolen. The bottom line: If your ring is stolen, you are not likely to get it back. You need insurance coverage that helps you replace a stolen, lost, or damaged engagement ring and other jewelry without extensive out-of-pocket costs.
So how will you replace your jewelry if something happens? You can’t assume your standard homeowners or renters insurance policy is adequate. Yes, most homeowners insurance policies provide jewelry coverage, but it is limited, even if you have really good coverage. A typical limit for jewelry coverage is around $1,500 (after a deductible), and this is a combined limit that applies to all of the jewelry you have in your household. If you have any one item that is more valuable, your coverage for that item is still limited to $1,500.
In this scenario, your average-cost engagement ring ($6,000) has only $1,500 in insurance coverage. If it is stolen, you need to pay the difference ($4,500) if you want to replace it.
What’s more, most standard homeowners and renters insurance policies only provide jewelry coverage in response to certain “covered perils,” or causes of loss. Most do not cover jewelry for damage (e.g., bent prong and lost stone), or accidental loss (e.g., your ring is lost while swimming).
What can you do? You can add a scheduled personal property rider, or jewelry rider, to your homeowners or renters policy to increase the individual coverage limit on your jewelry. Each valuable piece can be listed on the rider, with a corresponding value for which it is insured.
The amount of jewelry insurance you need depends on the value of your engagement ring or other jewelry. Whether you want to insure precious gems or a piece with great sentimental value, here’s how you can be sure that you have the right amount of jewelry coverage.
You may be wondering what it costs to properly insure your engagement ring or other jewelry. You must purchase enough coverage to limit or eliminate your out-of-pocket costs should you have a loss. While it may seem like you are spending a lot, imagine trying to pay for your stolen item on your own, or worse, being unable to replace it at all.
On average, jewelry or engagement ring insurance should cost around $1 to $2 for every $100 in replacement cost. Simply put, expect insurance for a $6,000 ring to cost $60 to $120 per year. Rates can be higher in larger cities or areas where jewelry is considered more susceptible to theft.
If you keep your jewelry in a vault or a home safe when you aren’t wearing it, you might be eligible for certain discounts. In addition, the insurance company will consider your situation less risky if you take these precautions.
When looking for engagement ring coverage, other jewelry coverage, you must pay close attention to what types of losses your particular policy actually covers. Most will cover theft, but coverage for loss or damage is often limited or excluded.
Adding a special jewelry rider provides “all-risk” coverage. This means that the scheduled items are covered for all risks, including damage and accidental loss, not just theft, fire, or other perils outlined in the main homeowners or renters policy.
While your jewelry may include some of your most precious possessions, it is not difficult to insure. Typically, you will add coverage for your engagement ring or other jewelry to an existing homeowners or renters insurance policy. As you add valuable items to an existing policy, you want to make sure your insurance company is still the best one for your needs.
You can shop for homeowners and jewelry coverage at the same time. Consider these tips for finding a jewelry insurance company:
Remember to compare policies carefully and seek the advice of your independent insurance agent. One of our Trusted Choice agents can find the best combination of coverage and price to suit your needs and budget. Contact an agent today to help you sort through the best coverage and quotes for your jewelry.