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How Do You Insure Jewelry?

Home insurance has a low coverage limit for jewelry. Learn what your best insurance options are to cover your bling.

Insured jewelry

If your jewelry is lost or stolen, jewelry insurance can help with the loss. While home insurance helps cover some jewelry loss, its jewelry coverage limits are typically pretty low and may offer minimal protection. This can be costly if you lose an expensive piece of jewelry like an engagement ring or necklace.

There are different options for finding your best jewelry insurance, depending on how much jewelry you have and what it’s worth. These include jewelry protection insurance, floaters and homeowners insurance. Each one carries pros and cons for you to consider. This article details:

How to insure your jewelry

Depending on how much jewelry coverage you need, there’s an insurance plan to fit your needs. You have three options:

  • Jewelry protection insurance (JPI)
  • Home or renters insurance
  • Jewelry floaters

Your homeowners insurance covers jewelry to some degree. However, home insurance coverage for jewelry is often limited in how much it pays out. For the best coverage, you’ll want a jewelry floater or jewelry protection insurance (JPI).

Jewelry protection insurance (JPI)

Jewelry protection insurance is a separate policy from home insurance. It is specially tailored towards jewelry coverage. As such, it covers a much wider range than homeowners insurance. JPI covers your jewelry against loss, damage and theft.

If mysterious disappearance coverage isn’t part of the JPI policy, it can sometimes be added. Insurers who offer jewelry protection insurance also cover jewelry repair costs for covered items, such as watches. A standout feature of JPI is that your premium doesn't go up after a claim.

Jewelry protection insurance often won't cover:

  • Wear and tear
  • Flood
  • Earthquakes

JPI pays out claims in three different ways: actual cash value (ACV), replacement cost or agreed value.

  • Actual cash value: An ACV policy covers your jewelry for its value minus any depreciation. It’s the market value of the jewelry at the time of the loss. Jewelry doesn’t depreciate the way other items can. If anything, it tends to increase in value over time. However, wear and tear can reduce its value. This may affect your payout after a claim.
  • Replacement cost: Replacement cost pays out your jewelry claim without considering depreciation. It’s the cost to replace the jewelry with a new piece. The only payout limit is the coverage amount listed on the declarations page of your policy. When making a JPI claim at replacement cost, you will be paid out the amount needed to repair or replace the covered item. The only limit is the amount you had it appraised for at the time of insuring it.
  • Agreed value: Agreed value is based on a value decided by you and your insurer. Your insurance pays out at that value in the event of a loss. This is probably the best payout option available for your jewelry. However, this type of payout also carries some of the highest premiums.

How much does jewelry protection insurance cost?

On average, JPI costs 1% to 2% of the jewelry's appraised value. The retail market value changes frequently. As such, you should reappraise your jewelry every one to three years.

Regarding the appraised insurance value of your jewelry, you should know the difference between retail replacement value (RRV) and resale value. The RRV of your jewelry isn't the same as what it would sell for on the resale market. RRV reflects what a piece of jewelry is worth for insuring it, not for what you can sell it for.

For example, if your engagement ring is appraised for $10,000 on your JPI policy, that means you are paid out that amount if the ring is damaged. If you try to sell the ring, you may get more or less for it.

To find out what your jewelry’s resale value is, you'll need a resale appraisal. This is a professional estimate of what a buyer would pay on the open market for a piece of jewelry. When jewelry is resold, it’s often as used jewelry on the wholesale market. RRV appraises the value of jewelry as new on the retail market.

Jewelry protection insurance can be worth it, but be prepared to pay a big premium. You can often lower your premium by taking on a larger deductible, but that means more money out of your pocket if a claim needs to be filed.

Jewelry floater

A jewelry floater, also known as a jewelry rider or personal articles policy, is one of the best ways to cover your jewelry. A jewelry floater is a big step up from what a standard HO-3 homeowners insurance policy provides, as it offers comprehensive coverage on scheduled jewelry. “Scheduled” means that itemized and appraised pieces of jewelry are covered for their full value.

Jewelry floaters are popular with people who have large jewelry collections. The better jewelry riders include “mysterious disappearance” coverage, but some policies exclude it. Home insurance doesn't often consider misplacing something as damage. With HO-3 insurance, if a diamond engagement ring goes missing, your HO-3 often won’t cover it.

Mysterious disappearance coverage can replace the ring. In some cases, the disappearance doesn’t need to be all that mysterious. If you are swimming in a river and your engagement ring falls off, you know where the ring is, but it probably can’t be recovered. A jewelry insurance rider with mysterious disappearance coverage should cover it.

It should be noted that there is a difference between mysterious disappearance and accidental loss. Accidental loss would be a case where your pearl bracelet gets snagged on something and pearls go flying everywhere. You gather all the pieces but find that the bracelet cannot be repaired. Accidental loss is covered by most jewelry floaters. Mysterious disappearance is only covered by some.

If the jewelry floater you’re looking at doesn’t include mysterious disappearance coverage, ask your insurer if it can be added. All in all, having a jewelry floater can save you a lot of money and heartache. Another benefit of jewelry floaters is that they typically have no deductible.

Your jewelry floater premium is based on the appraised worth of the jewelry covered and the area where you live. Should you want to cover your jewelry with a rider, your home insurer will need proof of the item’s value. This proof can be acquired with a professional appraisal.

Homeowners insurance coverage for jewelry

Standard home insurance covers jewelry under your policy’s personal property coverage. The perils that standard homeowners insurance covers jewelry against include:

  • Fire
  • Explosions
  • Theft
  • Vandalism
  • Water damage from plumbing

As it is already part of your policy, there is no additional premium to cover your jewelry with standard home insurance. An HO-3 covers jewelry for an average of $1,000 to $2,000, even if your personal property limit is higher. This is a relatively low reimbursement amount if you have a sizable jewelry collection. This is why a jewelry floater on your homeowners insurance policy or jewelry protection insurance can be a wise investment.

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