Insuring Your Jewelry with an Inland Marine Policy
The holidays are a popular time for gifting fine jewelry. This season also sees heavy travel, increasing the risk of jewelry loss and theft. The number of people who reported lost or stolen fine jewelry while traveling has doubled since 2015.
Unfortunately, only 1% recovered their jewelry after a loss. Research also finds that almost a quarter of men and 14% of women confessed to losing their wedding ring sometime during their marriage. With odds like these, it’s important to understand how you can best protect your assets.
Read on to explore the role jewelry insurance plays in safeguarding your precious investments.
Why Do I Need Jewelry Insurance?
While a basic homeowners policy may offer protection against jewelry loss or theft, relying on this coverage to safeguard your valuable and sentimental jewelry has drawbacks.
#1: Typically, homeowners coverage imposes limitations on jewelry. For example, if your $10,000 ring is stolen and your policy only covers up to $1,000, this can lead to a frustrating and costly experience.
#2. A deductible usually applies to losses covered by a basic homeowner’s policy. You’ll need to cover some of the expenses before receiving any coverage.
#3: Filing a jewelry claim through homeowners insurance may also lead to higher premiums. Jewelry insurance, a type of inland marine policy, helps mitigate risk, frustration, and financial burden by insuring a particular piece of jewelry.
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How Does Jewelry Insurance Work?
Jewelry insurance provides compensation when an insured piece of jewelry is lost or stolen, whether you’re at home or traveling. To ensure your jewelry insurance appropriately covers the value of the insured item, you’ll need to get a professional appraisal.
A professional appraiser will assess the actual value of your jewelry, excluding any markups that the jeweler may have added. They will also calculate the value of your jewelry by considering critical factors such as age, materials, producer, stone cut, color, clarity, and carat weight.
Pro Tip: The value of jewelry can fluctuate over time. Schedule appraisals every few years to ensure your jewelry is covered for its current value.
As mentioned, most insurance companies offer two different loss settlement options for jewelry: Agreed Value Loss Settlements and Traditional Repair and Replacement. Below, we break down what each of these options entails:
1. Agreed Value Loss Settlement
Most people imagine this option when they think of jewelry insurance. For an additional premium, the agreed value option pays the appraised amount listed on the policy for the item.
2. Traditional Repair and Replacement
Traditional repair and replacement is the default option on a scheduled personal property endorsement tied to your homeowners policy. This option allows an insurance company to replace a piece of jewelry at an amount lower than the value listed on the policy. This situation may arise if a lower dollar amount is sufficient to restore a damaged item to its original condition. It also allows for replacing a lost, stolen, or damaged item with something of a similar kind or quality.
What Else Does an Inland Marine Policy Cover?
While jewelry constitutes the most common item covered by inland marine policies, these policies offer coverage for a wide range of valuables, including:
Cameras
Coin or stamp collections
Electronics
Fine artwork
Firearms
Furs
Musical instruments
Wine collections
These items vary widely but have a few common characteristics. Generally, they are portable and high value. In addition, their coverage under a standard homeowners policy is limited. Investing in an inland marine policy ensures the item is adequately covered wherever it goes, offering peace of mind that your valuables are protected.
Protect What’s Precious to You
Research has shown that engagement rings are among the least insured yet most frequently lost or damaged personal valuables. Learn more about insuring your engagement ring and how to best protect your investment. When you’re ready, connect with a Central agent to explore your jewelry insurance options.
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