Comprehensive Guide to Engagement Ring Insurance
In all likelihood, there were only good thoughts on your mind when you purchased a ring to commemorate your engagement. However, it is a good idea for you to plan ahead for the possibility that your ring can be lost or stolen. Purchasing an insurance policy for your engagement ring is a great way to protect your investment. In fact, you can protect yourself from having to pay out of pocket to replace an engagement ring that has been stolen or lost by paying a fraction of what it cost you to buy the ring.
Engagement Ring Insurance Defined
An engagement ring insurance policy will protect your investment in case your ring is lost, damaged, or destroyed in some manner. The cost of this insurance is usually quite reasonable and the payments you make are from month to month.
Insurance protection for your engagement ring can be delivered to you in a variety of ways:
- Engagement ring insurance included with your homeowner’s insurance
- An extension that includes insurance for your engagement ring added to your homeowner’s insurance
- The purchase of an insurance policy specifically for your engagement ring
Homeowners Insurance and Engagement Rings
Homeowners insurance is often a requirement before a lender will agree to put up the money for you to purchase a home. Banks and other financial institutions are for the most part interested in the protection of the home you purchase. Protection will be extended to many of the possessions in your home, but this may or may not be the case when it comes to high-dollar items like an engagement ring.
Many insurance policies for both renters and homeowners will allow you to add the protection you need for an engagement ring for a nominal fee.
Many people protect their investment in a diamond or gold engagement ring by purchasing a policy from a company that specializes in insurance for jewelry. These policies cost more to maintain than a homeowners' insurance policy but will provide the greatest protection for your engagement ring. Insurance policies from companies that specialize in jewelry will also make it more likely that you will receive a full replacement for your ring versus a portion of the value of your ring if it is lost or damaged for any reason.
What is the Cost of Engagement Ring Insurance?
The value of your engagement ring will play a large role in determining the cost to insure the ring.
The average policy requires no more than $2 per each $100 of the appraised value of a piece of jewelry. Once you take into consideration that the cost of the average engagement ring in the United States is approximately $6,000, you can expect your policy to cost a little more or less than $120 per year. The cost of your specific policy can differ based on the insurer with whom you work and the specific options you choose for your policy.
If the cost of an insurance policy seems like a lot of money to you, take a moment to consider the cost of purchasing a new ring.
It is unlikely that you will find ways to earn reductions to the cost of an engagement ring insurance policy. But some companies may provide a discount if your ring is kept in a safe when you are not wearing it. It is important to note, however, these policies will not pay out if your ring is lost or stolen and it is determined it was not being worn or kept in a safe at the time of its disappearance.
Engagement Ring Insurance Requirements
If you purchase a quality piece of jewelry to commemorate your engagement, you will need to prove relevant information in order to properly protect your investment. Information you may need to provide include:
- Proof of Ownership
- Proof of Purchase Price
- Report from Reputable Appraiser
- Your Address
- Any Security and Safe Information that is Applicable
Photos showing the ring both on your hand and in your home will also help to prove you are the rightful owner of the ring in the event of a problem.
These documents and information are extremely important and should be kept in a secure location.
Most reputable insurance companies will require an appraisal from a professional before agreeing to cover the cost of a lost or damaged engagement ring. You will experience a difficult search for the policy you desire without providing this documentation.
It is a fairly simple matter for you to locate a reputable appraiser, however, many companies will only accept appraisals from a list of professionals they provide to you.
Some customers believe an insurance company has ulterior motives for choosing an appraiser for you. This is not the case. It is important for the survival of the company that they stick to the strictest standards possible when it comes to the valuation of the property for which they provide coverage.
The professional that assigns a value to your engagement ring will take into account things like the quality of the stones used to craft the ring, the mount quality, and the manner in which the stones are cut. The appraiser will provide you with a document that considers these and other factors before designating the cost necessary to replace your engagement ring.
Appraisal Documents Explained
There are a number of companies operating in the industry that will provide a valuation of your engagement ring for insurance purposes. One company that has earned a reputation for fair and accurate valuations is the Universal Gemological Laboratory. The UGL is a respected valuation source that is recognized by most insurance companies operating in the country.
Whether the initial document of appraisal you receive is from UGL or another trusted appraiser, it is important to remember that the document should be the first of a number of appraisal reports. The fact that vintage rings will often increase in value should be motivation enough for you to obtain regular valuations. In fact, it is not unheard of for a ring to triple in value over a 20-year period. The owner of this ring who still possesses a policy based on its original valuation will not receive sufficient money to replace the ring in the event of loss or damage.
It is recommended that you obtain a new valuation for your engagement ring every five years or so. It is also a good idea to use the same company to provide you with an appraisal each time.
Using a GIA Certificate
Jewelry owners commonly ask if they can use the GIA certificate they possess as a valuation document for insurance purposes. The answer is "no." This is not to suggest that a GIA certificate does not deserve the status it enjoys as the most authoritative document for jewelry certification available. It is only that this certification is not designed for insurance purposes. You should, however, show your appraiser any GIA certificates you possess to ensure the most accurate appraisal possible.
Things You Should Keep in Mind
Insurance for your engagement ring is not much different than other policy types in that there is often fine print that is not for the benefit of the policyholder. You should make sure you and your insurer are on the same page regarding the following points before you commit to a policy of any kind.
Your Engagement Ring is Lost or Stolen
Many policies will only pay to replace your engagement ring if it is stolen. Since you are much more likely to lose your ring than have it stolen, you should make sure there is a clear understanding between you and your insurance carrier that you are interested in full coverage for both of these possibilities.
Also, go over the exceptions discussed in your policy and make sure these exceptions do not make it impossible for you to recover money in the event something happens to your ring.
Double Check the Valuation You Receive
You should only trust a professional with a true knowledge of jewelry to appraise your engagement ring. For this reason, you should check the certification of any company you consider for this function.
It is an absolute necessity that your engagement ring is correctly valued for the following reasons:
- An error in the valuation of your engagement ring may result in the insuring company deeming the policy invalid.
- A valuation higher than what your ring is worth will cause you to pay more for your policy than necessary.
- A valuation that is too low will result in your recouping insufficient money to replace your ring if it is ever lost, stolen, or damaged.
Cashing Your Insurance Check
There are a variety of ways your insurance company may choose to pay you in the event you file a claim for your engagement ring. You should make sure you understand exactly how your particular insurer will choose to compensate you. Options include:
- A check issued in the name of the insurer.
- The insurer pays a retailer of their choice for replacement ring.
- Company allows you to shop for a retailer to replace your ring.
Most insurance companies offer policies that will pay to fix a damaged ring. These policies pay specifically for repairs and will not cover the cost of a ring replacement. Also, these policies often stipulate that damage to the ring must be the result of some type of impact. Coverage for any damage resulting from normal wear and tear of your ring is not the industry norm but you can discuss this option with your insurance carrier.
An insurance deductible is the amount of money a policyholder must pay before the insurance company is required to provide its share of the compensation needed to repair or replace an engagement ring. One example of this scenario is the policyholder who owns an engagement ring valued at $10,000 and maintains an insurance policy with a $300 deductible. If the ring is lost or stolen and needs to be replaced, the policyholder will need to pay $300 before the company spends the remaining $9,700 it costs to replace the ring.
Proof of loss
Your insurance company will likely require some proof that your property has been lost or stolen when you complete a claim. A police report is a common article of proof used when the reason for the loss is a robbery or burglary. Make sure you know well ahead of time what proof of loss is required by your insurance company in the event you need to file a claim.
If your ring is lost it could be harder to prove so make sure you are not purchasing a policy from a company that writes language into your policy that will make it impossible to file a loss of property claim.
There are a number of insurance companies that will provide great protection for your investment in an engagement ring. You will need to shop around a bit for the company offering the policy that best suits your particular needs.
Companies you should consider include:
- Jewelers Mutual
While it is understandable that no policy for your engagement ring will cover every possible thing that can happen to your jewelry, it is important to steer clear of companies who will try to sell you a policy with so many exclusions it is virtually impossible for you to receive compensation for a loss.
A reputable insurance company understands the true value of your engagement ring and will keep exclusions at a minimum so that you can sufficiently protect your investment. You can take the first step in ensuring your investment is well-protected by speaking to a company representative regarding the policies available to you.