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Imagine if your diamond Tiffany necklace, gold Cartier bracelet or Rolex Submariner watch were lost, damaged or stolen. It could cause both heartache and headaches.
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Fortunately, you can safeguard high-value necklaces, bracelets, watches, rings and other jewelry with the right kind and amount of insurance. Coverage options range from standard homeowners insurance to standalone jewelry insurance.
The Insurance Information Institute, an industry trade group, notes that there is no way to insure the sentimental value of jewelry, but at least you can buy financial protection.
Options for Insuring Jewelry
You typically can take advantage of three general types of jewelry coverage.
Standard Homeowners Insurance
Standard homeowners insurance offers coverage of jewelry for theft and damage caused by problems such as a fire, tornado or vandalism. But a standard homeowners policy typically limits theft coverage to $1,500 for jewelry, watches, precious and semiprecious stones and certain other items. Of course, a $1,500 theft limit barely touches the value of, say, a Harry Winston wedding band.
You can pay more to raise the coverage limits for jewelry under a standard homeowners insurance policy. But even then, you’re looking at coverage of perhaps $2,500 per item or $5,000 overall. Still not enough for valuable pieces of jewelry.
Personal Articles Floater
To bulk up jewelry coverage, you might consider a “personal articles floater,” which is either an add-on to a homeowners policy or a separate policy. Buying a floater is generally pricier than boosting the coverage limits under your homeowners insurance but provides stepped-up protection. (This is also called “scheduling” jewelry.)
If you purchase a floater, each item of jewelry is itemized and usually must be professionally appraised. The floater spells out the kinds of losses that might be excluded, such as a ring swept away by flood waters. A floater normally doesn’t include a deductible.
One advantage of a floater is that, unlike a standard homeowners policy, it covers accidental loss. For example, if your watch slips off your wrist and into the ocean while you’re sailing, it should be covered. A floater typically offers coverage wherever you and your jewelry are in the world.
The International Gem Society generally recommends against relying on a homeowners policy to insure jewelry, in part because a jewelry claim could cause your homeowners premium to go up.
Standalone Jewelry Insurance Policy
Another possibility is to buy a stand-alone jewelry insurance policy. In many instances, a standalone policy and a floater provide similar benefits, such as:
Coverage for situations like theft, accidental loss and mysterious disappearance. According to insurance company Jewelers Mutual, mysterious disappearance is the No. 1 reason that its customers file a claim.
Coverage for the loss of part of a set, such as a single cufflink.
Coverage for jewelry you’ve packed when you’re taking an international trip.
A standalone jewelry policy may deliver even more benefits than a floater. For instance, it might cover losses that a typical policy doesn’t, such as a chipped stone in a necklace.
“If you’re looking for the absolute best jewelry insurance coverage, a specialized policy is the right choice. Because it’s a very specific coverage tailor-made to a piece of jewelry or a watch, you’ll get additional coverage you may not get with a homeowners [policy],” the International Gem Society says.
PURE Insurance, which caters to high net-worth individuals, insures jewelry via its collections policies. It insures a collection of jewelry whose pieces have been itemized or provides overall coverage for a group of less costly jewelry.
With PURE, you’ll find higher coverage limits for jewelry than you would with a normal homeowners policy. Under PURE’s homeowners coverage, a policyholder enjoys a $25,000 limit for one item of jewelry that has been lost or stolen, with an overall loss limit of $50,000. If the value of your jewelry collection goes above $50,000, PURE lets you add separate coverage to your traditional homeowners insurance, as long as the items are professionally appraised.
Another insurer, Chubb, requires a professional appraisal only if an individual piece of jewelry is valued at $100,000 or more. And if you buy more jewelry, Chubb covers it for up to 90 days at 25 percent of the itemized coverage as long as you already own jewelry that you have itemized.
How Much Does Standalone Jewelry Insurance Cost?
The annual premium for specialized jewelry coverage might cost 1 to 2 percent of the value of jewelry. So you might expect to pay $100 or $200 a year to cover a $10,000 Rolex. At Jewelers Mutual, options for deductibles include zero, $100, $250 and $500. The company also offers larger deductibles, even up to $100,000, for super-high-value jewelry.
John Egan is a freelance writer, editor and content marketing strategist in Austin, Texas. His work has been published by Experian, Bankrate, National Real Estate Investor, U.S. News & World Report, Urban Land magazine and other outlets.
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