While popular culture reinforces the idea that diamonds are forever, the truth is that any number of incidents could cut the life of one’s precious jewelry short. This includes being stolen, lost or damaged, all to traumatizing effect – both to a person’s wallet and their mental wellbeing. While one can combat these occurrences by locking valuables deep inside an underground vault, there are other ways to mitigate the consequences of loss without sacrificing the enjoyment of a piece.
At the forefront of one’s options is what’s known as “jewelry insurance,” a form of insurance that works exactly as one would expect it to – by paying a small price, one can insure their most prized pieces of jewelry against the unknown.
However, unlike car insurance or home owner’s insurance, the benefit of jewelry insurance is greatly under-appreciated, according to Mike Maley, vice president of jewelry insurance company Jeweler’s Mutual. So to give some insight into this topic, Maley shares some of his experience working with the jewelry insurance industry.
Why is jewelry insurance so important?
MM: For young couples, especially those that do not own a home, an engagement ring or wedding ring is their biggest asset. Jewelry insurance is necessary because unexpected accidents happen every day. And when it comes to engagement rings and wedding rings, they are more than just jewelry – they are cherished memories reflected in tangible forms.
A 2011 national study of married women by Jewelers Mutual revealed that over 54 percent of respondents had never had their engagement rings appraised or had not done so within the past 10 years. Ten years ago the price of gold was approximately $240 per ounce. Over the past ten years, gold prices have increased more than 700 percent to reach its current price of approximately $1,722.32 per ounce (source: http://goldprice.org). Prices of precious stones are soaring as well. A polished diamond cost 18% more in June 2011 than it did a year before according to The DuMouchelle Diamond Exchange. Gold and diamonds are becoming more valuable which means jewelry appraised and insured years ago is not completely protected.
What are the dangers of not insuring the jewelry?
MM: Once the jewelry is lost or damaged, it is too late to get insurance. Uninsured jewelry cannot be replaced or fixed without the owner incurring out of pocket costs. Some of the happiest times, including right after the wedding, are some of the most vulnerable for jewelry theft and damage.
Honeymoons can involve wonderful trips to exotic locations, but can also be dangerous for jewelry. When traveling, you can become an easy target because you are often not paying attention to your valuables. Travelers become distracted with finding their way and taking in sites, and may drop their guard on their valuables. Before you travel you should ask yourself if you really need all the jewelry you’re taking and if there are special measures you can take to protect yourself against theft, such as using hotel safes.
What kind of services do you offer to help mitigate this danger?
MM: A personal jewelry policy, like the one offered by Jewelers Mutual, offers individuals broad coverage, including repair or replacement of jewelry, in the event of a loss, damage, theft or mysterious disappearance.
If our policy holders experience jewelry damage or loss, they won’t have to pay out of their own pocket. Our jewelry insurance policy even offers jewelry protection with no deductible.
A standard homeowner policy includes coverage for jewelry and other valuable items but there are limits of liability, usually $1,500. These policies do not typically cover damage or mysterious disappearance. Consumers can also purchase floater policies by scheduling their individual pieces of jewelry, which offers more protection but also adds an additional premium.
Jewelers Mutual offers jewelry repair or replacement for lost or damaged jewelry with items of same kind and quality, returning jewelry owners to the same position that that they were in before the loss, unless, of course, they choose to upgrade. Jewelers Mutual works with a policy- owners’ jeweler to match the previous ring’s cut, quality and brand. We want to make jewelry replacement as easy as possible.
How do you determine the value of the jewelry and what kind of policy is right for a client?
MM: Some people will actually [avoid] purchasing insurance for their jewelry because they don’t think they have the necessary paperwork or think they will have to jump through hoops to start insuring their gems. You’ll be relieved to know that getting an appraisal or insurance evaluation in order to receive coverage is simpler than you think. For items below $5,000, some insurance companies won’t even need an appraisal – a detailed sales dated within the past 18 months will do.
Engagement and wedding bands are not the only valuable pieces of jewelry that are vulnerable to loss or theft. Wise jewelry owners should consider all of their wearable valuables when exploring insurance options. Expensive pieces like men’s watches and strings of pearls should also be protected.
The premium rate for insuring unscheduled jewelry is $15 per $1,000 of value, up to a $5,000 total limit. You can add this option to your policy in $1,000 increments without an insurance evaluation/appraisal. This coverage has a $100 deductible.
To qualify for this coverage, you must have at least one item of jewelry scheduled on your policy with an insurance evaluation/appraisal. The cost of jewelry insurance is based on limit of insurance value and the state and county or province where the person who wears the jewelry lives.
In what kinds of cases/jewelry are your services needed most?
MM: Consider this – if you no longer had your favorite pair of earrings, your wedding band or that necklace from your mother, you would be pretty distraught. If you can’t bear to part with a piece of jewelry, it should be insured.
Items that hold special emotional value, like an engagement ring, should always be protected. Any jewelry that has great financial value should be covered as well since the disappearance of that item could be a financial loss as well as an emotional one.