Your Home Insurance Has Limited Protection For Jewellery

Whether it’s a single engagement ring, an heirloom set or a large collection you bought for yourself, your jewellery needs insurance. Yet most home insurance policies limit the amount of coverage to $5,000 or less. That might not even be enough to cover a single piece, much less a jewellery box full.

For example, the average cost of an engagement ring (2021) is around $3,500, according to weddingstats.org. And the average Rolex watch ranges between $7,000 and $12,000. With prices like these, every jewellery owner should consider their insurance options and protect their investments. 

How to insure jewellery

Jewellery insurance options vary almost as much as the pieces they cover. You can add your jewellery to your existing homeowners, condo or renters policy for only a few extra dollars a year or purchase a separate policy specifically for jewellery. 

Depending on the details of your coverage and the value of your items, you may need a rider on your home insurance policy or a dedicated jewellery policy.

If you decide to add your jewellery to your existing policy, you will likely be required to list of all your individual pieces, often with supporting documentation such as photos or appraisals. This list, called a “personal articles floater,” will be appended to your home insurance policy. 

It may be a practical and cost-effective option if you want to insure only a few rings and necklaces, but it might not be the best option if you have a larger or more valuable collection. That’s because each piece has to be added to the list of covered items; if you forget to include a piece or you buy another, it won’t be covered until it is “endorsed.” 

Another drawback of using a personal articles floater for jewellery is that your jewellery is only protected in certain situations. While your pieces will likely be covered if they’re stolen or destroyed in an event such as a fire, they will not be covered for other events such as accidental loss or damage. And your policy might not cover losses due to certain natural disasters like floods or earthquakes. 

Lastly, the payout limit on a personal articles floater may be lower than the value of all your pieces together.

Separate jewellery insurance could be a better option if you have a larger collection or need more flexible coverage. A stand-alone jewellery policy typically costs about 1%-3% of the value of the insured piece or pieces per year. 

These policies usually have significantly higher coverage limits, though. They may also cover events that homeowners, condo and renters policies do not, such as worldwide travel, accidental damage, and loss of part of a pair. 

A jewellery insurance policy offers more flexibility than home insurance, too. For those who collect jewellery or buy on a whim, some policies offer automatic coverage for newly added items. These policies may not require appraisals for pieces under a certain value or may offer agreed-value coverage. Your insurance broker can help you understand the full requirements of your insurance contract.

Remember that the value of some items will increase over time. Whether you have a personal articles floater or a separate jewellery policy, you should review your jewellery insurance periodically to ensure you still have adequate coverage. 

Preserving your pieces

Beyond insuring your jewellery, there are steps you can take to ensure the pieces are yours to enjoy and pass on. 

Use secure storage

The first and most obvious step is securing your jewellery when it’s not in use. Your best option is usually a safe if the items are valuable and not used often.

You should periodically look at jewellery you have stored away to make sure it hasn’t gone missing. You may have a time limit to file an insurance claim, so report a theft or loss as soon as you discover it. Of course, alarm systems and cameras can also deter and catch thieves.

Research travel-related stipulations and best practices 

If you plan to take your jewellery on a cruise or to an international destination, research any stipulations in your insurance policy. Safe storage of your pieces while traveling is important, so learn about best practices before tucking thousands of dollars’ worth of jewellery into your luggage.

Keep jewellery well-maintained

Keeping your pieces in good shape will help you avoid losses due to things like faulty clasps or loose gem settings.

Create a photo inventory

Make a photographic inventory of your collection and any appraisals you’ve had done. Store the photos on the cloud so you’ll still have them if you suffer a large loss due to a fire, flood, windstorm or massive theft. Your insurer will be able to identify what was lost and process your compensation more efficiently. 

Additionally, police and insurance companies often work together in cases of theft to alert pawn shops and other dealers in gems of larceny; photos can help identify your pieces and get them returned to you.