Recently I ran into one of my co-workers near our office building’s elevator. As we waited for it to arrive, we complained about how long it was taking to make it to the fourth floor, and the fact that it had been on the fritz for some time.
At the eventual sound of the “ding”, we stepped into the elevator and I learned something that made the machine’s inefficiency seem like the least of our troubles.
“I lost my wedding ring in here the other day,” my coworker told me. Once I finished gasping, he explained that the ring had fallen off his finger and down the elevator shaft, in that just-wide-enough gap between the floor of the building and the elevator. The technician tried to find it, but the search turned up fruitless. The odds of getting it back weren’t great to begin with. It was like, well, trying to find a wedding ring inside an elevator shaft.
When you write about personal finance and insurance for a living like I do, hearing a story like this sends a mundane albeit relevant thought through your brain: I hope he has jewelry insurance.
Something that expensive should be protected against damage and loss. But what type of insurance is best for an engagement or wedding ring? These items carry a ton of sentimental value, not to mention actual cash value. So should you insure them under your home or renters insurance policy, via a third-party jewelry insurer, or simply rely on the warranty from the jeweler?
First things first
No matter which way you decide to insure your ring, it’s important to first find out how much the ring is worth, since this is a pretty significant determining factor in the level and cost of coverage you’ll get.
It’s best to have the ring appraised by either a certified appraiser or jeweler. The cost for this service can vary. Some appraisers will charge a flat rate for the service; others might take a percentage of the value of the ring as their fee.
Appraisals shouldn’t be a one-time deal, either. Because global markets are constantly in flux, the value of your ring is going to change, too, depending on what gemstones or precious metals it’s made out of and what those materials are currently being sold for.
Industry recommendations for how often to appraise range from every two to five years. And whenever you get an updated appraisal, you should tell your insurer, since you don’t want to risk being underinsured. The updated value could also change your premiums.
Some insurers, such as Jewelers Mutual, which provides coverage for all personal jewelry items and jewelry businesses in the U.S. and anywhere in Canada with the exception of Quebec, will provide something called “inflation guard protection, or insurance value adjustment.”
“This feature will automatically adjust the insurance value of insured items when an updated appraisal has not been received for a period of time,” says Bryan Howard, director of product and risk management at Jewelers Mutual.
“This adjustment is based on the latest results for Jewelry and Watches within the Consumer Price Index, and protects the customer from their jewelry items being underinsured.”
Once you’ve got a good handle on the value of your ring, you can start doing your research on which path you want to take to insuring it.
Insuring the ring under your home or renters policy
Insuring your ring this way is relatively straightforward, since you can keep all your property insurance with one company.
However, most home and renters policies will include only a base amount of coverage for jewelry, or a limit — usually around $6,000 or less for each claim you make. So, your first step should be looking at the policy language to determine what the cap is for jewelry items, and whether or not you’ll need to purchase additional coverage (called an “endorsement”) in order to fully cover the cost of the ring.
Typically, home and renters policies will cover loss or damage to the ring. The specific amount of coverage is usually determined by figuring out how much it would cost to replace the ring, as well as other factors like where it’s being stored and who’s wearing it.
If you need to make a claim for loss or damage to the ring, you would contact your home or renters insurance company. Depending on the insurer, you might be able to obtain an actual cash value for the ring (though keep in mind that your insurer will take into account how much the ring has depreciated in value since you bought it) or a replacement ring that’s similar in quality and type. You may need to hand over any receipts from appraisers or the jeweler from which you bought the ring.
Insuring the ring via a jewelry insurer
Another way to insure your rings is to buy standalone jewelry insurance from a jewelry insurer.
“Each company is unique in what they offer in terms of their cost and level of coverage,” says Howard. “Warranty products will cover damage to the item and maybe a few types of losses, such as where they lose a piece of the item that they purchased. Insurance policies tend to be a little more comprehensive from that standpoint, where they’ll cover theft, damage to the item, things like that.”
But no matter where you’re getting your insurance from, Howard recommends doing your research and sifting through the policy language to see what amount and type of coverage you’re getting with each provider.
Each insurer will ask for different information, but if a customer applies for a policy with Jewelers Mutual, they’ll need to provide the value of the ring, who is going to be wearing it (and how often), where it’s going to be stored, and how it will be used. These factors will determine the level of coverage, with deductibles that can range anywhere from $0 to $25,000, depending on the value of the ring, says Howard.
“We’ll also ask for permission to run an insurance score,” he says. An insurance score, he explains, is a way for insurance companies to determine your insurability by looking at your credit or financial habits. It’s completely optional in Canada and the customer must consent to it.
A jewelry policy at Jewelers Mutual will typically cover loss, theft, or damage to the ring.
“Let's say you hit your engagement ring on the side of the table and you chip the stone or bend or break the prong or setting that holds the stone in place,” says Howard. “Those are typically types of perils or losses that are covered in our policy language.”
There’s no difference in coverage for male versus female rings, and it’s possible to insure multiple items under one policy.
The most important thing is making sure you have the appropriate coverage when you need it.
“The minute that it leaves the jewelry store,” says Howard, “it’s the individual’s responsibility to ensure that it’s protected.”