Love is in the air! Jewelry insurance: Do you need it?
February 13, 2017
Getting engaged or receiving a beautiful piece of jewelry from a loved one can be one of the most memorable times of a couple's life. Having a burglar break into your home and steal the engagement ring, however, can be something you'd like to forget.
The good news is that with a little advance planning, your homeowners or renters insurance policy may help cover the cost of a stolen token, including the diamond.
Who Should Buy The Coverage: The Ring Buyer Or The Recipient?
When thinking of insurance for an engagement or wedding ring, a primary question might be: Who should buy the insurance—the person who purchased the ring, or the recipient? The answer lies in the current ownership—if the couple isn't living together, then the person who is currently holding onto the ring, whether on a finger or at home, is the person who should make sure it's insured.
So, let's say John bought an engagement ring for Nancy, but has yet to present it to her. At this point, the ring is still John's personal property. In this case, John needs to make sure the ring is covered under his homeowners, condo or renters insurance policy. Once John proposes and Nancy accepts the ring, Nancy owns the ring. It is now Nancy's personal property. So she needs to make sure to purchase coverage for her ring under her homeowners, condo or renters policy.
How Is Jewelry Covered? Are There Limits?
A standard homeowners insurance policy typically covers personal property for 50 to 70 percent of the amount of insurance you have on the structure of your home, according to the Insurance Information Institute. For instance, a home with $100,000 worth of insurance on the structure would typically have between $50,000 and $70,000 worth of coverage for personal belongings such as clothes, computers, sports equipment and, yes, items like jewelry.
However, some categories of personal property have a maximum dollar limit your insurance company will pay in the event of a covered loss, like theft. Jewelry and other expensive items are covered, but usually up to certain dollar limits if they're stolen—typically between $1,000 or $2,000 per item of jewelry, according to the Insurance Information Institute.
If you own valuable jewelry like an engagement ring, you can buy a "floater" or "endorsement"—essentially an add-on—to your existing homeowners or renters policy called scheduled personal property coverage. This type of coverage increases the standard limits of your current policy to insure the full appraised value of the ring.
So, if you're planning an engagement, be sure to talk to your insurance agent about your current personal property coverage limits and what options you have to protect your investment, so you won't have to wait at the wedding altar.