Americans love their jewelry, especially come Valentine’s Day. The National Retail Federation projected that jewelry purchases would reach $6.2 billion in connection with the holiday this year, up from $4.1 billion in 2021.
But will those buyers bother to insure their purchases?
Many fail to think about coverage for their rings, bracelets, brooches and other baubles, financial experts say. Or they don’t realize that their homeowner or renter insurance typically has fairly small coverage limits on jewelry.
Which isn’t to say that jewelry insurance is always necessary (more on that later). But like all forms of insurance, it can provide a certain peace of mind — provided you’re willing to pay the price. Here are some pointers to guide you through what to consider.
Take stock of what you have
Even before you consider buying jewelry insurance, it’s important to know what you own. Lauren Adovasio, a manager with Manhattan West, a wealth-management firm, says people often put rings and other items in a drawer and then “just forget about it.” She encourages her clients to do a thorough inventory, particularly with the idea that they may not realize the value of some pieces.
Get appraisals
There’s little point to insuring pieces of jewelry if they’re not appraised, experts say. Otherwise, you won’t know what to insure them for — and you may not be able to get the full value from your insurance company in case you need to file a claim. Michael Giusti, a senior writer and analyst with InsuranceQuotes.com, puts it this way: “If it’s worth insuring, it’s worth appraising.”
Consider your options (and shop around)
It’s a good idea to check your homeowner (or renter) insurance to see if it provides any coverage for jewelry, but Giusti and others warn that policies usually have limits. (Not to mention the deductibles that must be met before a claim is paid out.) So, you’ll typically need to consider one of two options — buying what’s often referred to as “floater” or “rider” coverage for your jewelry as part of your homeowner insurance or buying separate insurance for your jewelry. Experts say it’s worth shopping around to compare options.
But be prepared to pay in any case. Giusti says annual jewelry coverage typically runs 1% to 3% of the value of items — for a ring valued at $20,000, that means a yearly hit of anywhere from $200 to $600.
Understand what’s covered
Not all policies are alike in terms of what they cover, warns Rebecca Sheena, an agent with Meadowbrook Insurance Agency, a Michigan-based company that works with a variety of carriers. You’ll want to take a close look at any policy you’re considering to see if you’re covered for losses due to theft, damage or an accident as well as what’s termed “mysterious disappearance,” though it may be harder to find coverage for that mystery loss.
Giusti says that if a loss is truly mysterious — as in a ring that was in a drawer and is suddenly no longer there — it’s still worth filing a police report before filing an insurance claim. “The more of a paper trail, the better,” he says.
Think about other protection options
If you purchase jewelry on a credit card, you may be covered for theft or damage for a certain period. That’s not to say you shouldn’t still consider other insurance options, but if you’re gifting a ring soon after you buy it, that may be all the protection you feel you need.
And if you have a safe-deposit box, it’s certainly a good place to store jewelry that you don’t plan on wearing — or that you wear only on special occasions, experts advise. In a sense, that’s a form of protection from loss, though the Federal Deposit Insurance Corporation warns that items in a safe-deposit box are not covered by the FDIC. Naturally, you can also use a home safe to store jewelry.