According to the National Retail Foundation, Americans planned to spend $6.2 billion on jewelry for Valentine’s Day in 2022. Many purchase jewelry insurance to protect their investment as buyers shop for the perfect diamond ring, pearl necklace, or other pieces of fine jewelry to celebrate their love. Valentine’s Day jewelry purchases are an excellent opportunity to obtain this coverage and safeguard valuables against risks.
Jewelry insurance provides coverage for fine jewelry that other coverages may not. Understanding what jewelry insurance covers and its benefits can help buyers decide whether to obtain this coverage for Valentine’s Day gifts.
The Value of Jewelry Insurance
Jewelry insurance protects individuals with high-value jewelry that standard insurance policies can’t cover. This coverage is valuable for those whose jewelry would be expensive to replace.
Why Get Jewelry Insurance?
People who are shopping for an engagement ring, wedding band, or other Valentine’s jewelry with a diamond or other precious gem are familiar with the prices accompanying these pieces. Jewelry purchases represent a significant loss if they become damaged or disappear. These people may turn to jewelry insurance for the protection they need for their high-value belongings.
High net worth individuals may have jewelry with a higher loss potential than average policyholders, making jewelry insurance a valuable investment in case of various jewelry-related risks. Potential risks that could accompany the purchase of fine jewelry include:
- Loss
- Theft
- Damage
- Gifts to others, such as a fiancée
- Earthquake or flood
What Is The Average Cost of Jewelry Insurance?
The cost of insuring jewelry varies depending on its value. Typically, annual jewelry insurance costs range between 1%-2% of the jewelry’s value. If someone purchases a $10,000 necklace, they can expect to pay between $100 and $200 to insure it per year. Rates may also vary between states.
Insuring Valentine’s Day Jewelry
Obtaining adequate coverage for Valentine’s jewelry is beneficial for protecting the purchase. Whether planning a surprise engagement or splurging on a luxury watch, financial protection is crucial in case someone misplaces or damages these valuables. Before purchasing jewelry for Valentine’s Day this year, understand how to insure the investment.
Types of Insurance That Protects Jewelry
Before obtaining coverage for their jewelry, buyers need to keep receipts of their purchases to determine the amount of coverage they need. There are three types of insurance that covers jewelry — they can add their jewelry to an existing policy, purchase a personal articles floater, or obtain personal insurance specifically for their jewelry:
- Adding jewelry to an existing homeowners insurance policy: Adding jewelry to a policy may require policyholders to list each item individually. Failing to include a piece in the policy could result in a lack of coverage if that piece is lost. In addition, many policies limit jewelry coverage to $1,000 to $2,000. That may not be enough to cover a purchase, considering that the average cost of an engagement ring was around $5,500 in 2020.
- Buying a personal articles floater: Insurance agents may be able to add a personal articles floater to an existing homeowner’s policy to raise the coverage amount until it covers Valentine’s jewelry purchase.
- Obtaining personal insurance: Jewelry insurance is a coverage option under many personal insurance offerings. This coverage is ideal for those with high-value jewelry or who plan to add to their collection.
Understanding a Personal Articles Floater
A personal articles floater is also referred to as a rider or endorsement. Insurance agents can add this endorsement to an existing policy to obtain broader coverage for the property than the current policy provides. A personal articles floater may cover additional types of losses that a homeowners policy doesn’t, including accidents.
Floater policies typically offer a replacement cost for lost or damaged jewelry, which replaces jewelry with an item of like kind and quality if it is lost, stolen, or damaged. There is usually no deductible for jewelry claims on personal articles floater policies. However, a jewelry claim filed against a homeowners policy could affect the premium for the entire policy.
Insurance Tips
Following a few tips can help buyers maximize their coverage for jewelry purchases this Valentine’s Day.
1. Compare Options With a Broker
Jewelry insurance costs and coverage vary depending on the insurance provider. An insurance broker helps find a range of jewelry insurance quotes from the best jewelry insurance companies that fit buyers’ needs. The factors an insurance broker might consider when researching coverage options include:
- How claims are handled, such as whether a piece of jewelry will be replaced or its value reimbursed.
- Whether depreciation affects the item’s value.
- Whether the price of precious metals and gems affects coverage limits.
- What proof of damage or loss is required.
2. Know the Jewelry’s Value
An essential step in obtaining jewelry insurance is having an appraisal to determine the items’ worth. A professional diamond appraisal determines the jewelry’s value for insurance purposes and considers qualities such as carat, color, quality, and clarity. A jewelry appraisal considers current retail value but also evaluates the item for craftsmanship and the origin of the materials used.
If the jewelry was recently purchased, buyers might be able to use the receipt when obtaining coverage. However, an insurance policy may require an appraisal instead of a receipt for high-valued items. Reappraisals every couple of years are also critical for ensuring buyers get the necessary coverage.
3. Understand What Is Covered
All insurance is designed to cover certain risks, but policies vary in the types of risks they cover. Different jewelry insurance policies may have various exclusions. For example, some policies may not cover loss or damage to jewelry that occurs while the policyholder is traveling. That means one’s fiancée could lose a ring on the beach on vacation, and the insurance may not cover the incident.
Buyers should also consider whether the policy will pay out if they damage jewelry on accident or give the jewelry as a gift. Determine how a policy handles loss or damage while traveling, damage due to natural disasters like earthquakes, mysterious disappearances, and even preventive repairs.
The Benefits of Choosing BMB
At Bowen, Miclette & Britt, our expertise in personal and high net worth insurance enables us to find the coverage our clients need to be confident that their investments are secure. We work closely with our clients to assess their unique loss potential and determine risk management measures to prevent loss. Personal insurance products we connect clients with include jewelry insurance and coverage for other collectibles to protect these valuable items.
For over 40 years, BMB has connected our clients with risk mitigation and loss control through comprehensive protection against their high-level risks. As one of the top 100 brokers in the country, we have the expertise and resources to advocate for clients’ coverage needs. Our brokers also strive to provide small-business customer service, developing strong relationships with clients to address their particular needs and concerns.
Get Coverage for Valentine’s Day Jewelry
For jewelry insurance in Houston, Texas, after a Valentine’s Day purchase, partner with Bowen, Miclette & Britt. BMB uses a consultative approach to help high net worth individuals find insurance coverage for their needs. Our commitment to our clients’ and communities’ success drives us to help clients mitigate their risks and control losses.
To learn more about our brokerage services, contact BMB today.
