While there is no way to insure the sentimental value of an engagement ring or a family heirloom piece, having the right amount of insurance will provide financial protection.
Were you lucky enough to have the question popped and end up with a big rock on your finger? Or did you give that special someone a piece of jewelry — such as a diamond necklace — to show your love?
If so, congratulations! Now put away those romantic feelings for a moment to do something practical: Protect that precious — and expensive — trinket.
Jewelry is a valuable investment that warrants proper insurance. Americans spend more tha $70 billion a year on jewelry, with engagment rings accounting for roughly 10% of that figure.
While there is no way to insure the sentimental value of such a gift, having the right amount of insurance will provide financial protection, according to the New York City-based Insurance Information Institute.
“‘In the event an expensive piece of jewelry is lost or stolen, the added gift of coverage can help alleviate any monetary woes,” said Jeanne M. Salvatore, the I.I.I.’s chief communications officer. “So if you’re planning a proposal, consider getting the coverage before presenting the ring.”
Jewelry losses are among the most frequent of all homeowners content-related insurance claims.
“In my many conversations with consumers, personal finance bloggers and insurance educators they have noted that the purchase of an engagement ring often triggers interest in getting a renters insurance policy for the first time, as many — especially young — people start to think more seriously about financially protecting themselves,” said Salvatore.
Here are four steps that will ensure adequate protection for your new ring, according to the Insurance Information Institute:
1. Contact your insurance professional immediately
Ask your insurance agent if you will need additional insurance.
Most standard Homeowners’ and Renters’ insurance policies include coverage for personal items such as jewelry; however, many policies limit the dollar amount on jewelry to $1,000 to $2,000. With the average engagement ring costing nearly $6,000, that coverage may not be sufficient.
Consider purchasing add-ons to your Homeowners’ or Renters’ policy, which, in most cases, would also cover you for “mysterious disappearance.” Purchasing a floater or an endorsement policy when insuring your jewelry means that if your ring falls off your finger and is flushed down a drain, or is lost, you would be financially protected.
And, unlike a Homeowners’ policy, floaters and endorsements carry no deductibles, so there is no out-of-pocket expense to replace the item.
2. Keep your receipt
Forward a copy of your store receipt to your insurer so that your insurance company has a record of the current retail value of the ring then store the original in a safe place.
Consider also getting a copy of the appraised value of the item.
3. If you received an heirloom piece, have it appraised
Get your antique jewelry appraised for its dollar value. Talk to your insurance professional who can recommend a reputable appraiser.
A good appraisal will give specific details of the stone — such as weight, grade, measurements, diagrams of flaws, any chemical treatments to the stone and a photo of the item. Additionally, the appraisal will identify whether the diamond is synthetic.
4. Add the item to your home inventory
An up-to-date inventory of your personal possessions can help you purchase the correct amount of insurance and speed up the claims process if you have a loss.
Don’t yet have an inventory? Celebrate your engagement by creating one with your fiancée.
Taking the time to create an inventory and even adding photographs for special valuable items, is probably the best step policyholders can take to protect their valuable assets. This, in turn, will help facilitate smooth insurance settlements.
The I.I.I. makes creating a home inventory easy by offering a free tool called Know Your Stuff.