Today’s guest post, brought to us by Afshin of Estate Diamond Jewelry (New York, NY) covers a very important topic that doesn’t get a lot of attention: engagement ring insurance! Enjoy:
Your engagement ring may well be the third most expensive purchase you ever make, after a house and a car, and yet so many people – for whatever reason – don’t insure it in the way they would other home contents. Part of the reason may be that they simply don’t know those expensive items aren’t usually covered by homeowner’s insurance, or it may be that they don’t believe anything will ever happen to it. Whatever the reason, a lot of those people realize their mistake only when it’s too late.
Insuring anything isn’t really that complicated, but it is true that jewelry does require a little more effort on the part of the owner. However, it is still quite a simple process that is well worth the effort. Here, we show you how to make sure, not only that your engagement ring is insured, but that it is insured appropriately.
Read the full post after the cut!
Engagement rings are small, and surprisingly prone to damage, so it makes sense that you should look to insure it as soon as it is in your possession. In order to make sure that your engagement ring is insured for the correct amount, you first need to have all the information you will require when you speak to your insurance company or broker.
Get Your Ring Valued
Okay, we know that you have paid a specific amount for your engagement ring, but that doesn’t necessarily mean that the amount you paid will be the insured amount, or even what your insurer will pay out. Besides which, your insurer will insist on an independent valuation by someone who is regarded as a valid appraiser before agreeing to insure your ring. Most reputable jewelers will use an independent specialist appraisal company to provide a report for their engagement rings which shows both the quality and the value of the item at the time of appraisal.
The reports issued by such companies can be a little daunting, and you don’t necessarily need to understand them fully as they are intended to provide information to your insurer, but it doesn’t hurt to have a broad idea of what the report is indicating. The reports vary very little across the different appraisers, so it’s a good place to start gaining a little more knowledge about your engagement ring.
Types Of Jewelry Insurance
Insurance policies can be notoriously crammed with “small print” when it comes to making a claim, so it will pay (literally) to make sure there will no nasty surprises in the event that you do need to make a claim. As an example, it would be nice to think that all policies will cover theft AND loss, but that isn’t always the case. Too many policies only cover theft and even then will tag on a bunch of conditions that, should you miss a single one, will give them a get out clause which will leave you with no ring and potentially a year’s worth of premiums out of pocket, to boot.
The policy you choose will state one of two things when it comes to paying out. Either the insurance company will simply send you a check for the insured amount, once they are happy that the claim is valid, or they will pay for a replacement as close in design and value to the original ring, usually from an approved supplier. If one or the other is important to you, then you need to make sure the policy you get is the one you want.
Damage insurance may also be listed as an extra to the basic policy, so don’t assume that any chips or other damage is automatically covered. Wear and tear is also often excluded from damage coverage, and you need to be very careful about knowing what is and isn’t covered.
If you want to find out approximately how much your engagement ring insurance will be, click here to read more and also to try out the engagement ring insurance calculator.
Exclusion, Exclusion, Exclusion
Ah yes, the smallest of the small print, the exclusions. To be fair to the insurance companies, most of the exclusions included in jewelry insurance are reasonable enough. As an example, your engagement ring may not be insured if you lose it whilst diving the wreck of a sunken galleon in the Caribbean or downhill skiing blindfolded. Mostly, plain old common sense will save you from losing out a second time after the actual loss of your ring. But some exclusions might not be so obvious and may creep up on you.
If you are pregnant and your rings need to be cut off because your fingers are swollen, the insurance company will certainly maintain that you should have identified such a thing, and will almost certainly refuse to pay out. Some occupations may also be excluded from cover, and these will probably not be listed in any way but will be covered – like most potential exclusions – under a general clause requiring you to be sensible and vigilant.
The Price Isn’t Always Right
As with all insurance policies, there will be a deductible which is the amount that will be taken off any amount payable under the policy. Usually, the higher the deductible, the cheaper the premiums, so you need to think carefully about the amount you will need to contribute to a replacement ring.
The valuation given at the time of the original appraisal is only valid at that exact time. Diamond and other engagement rings rarely decline in value over time, so it’s important to get the ring reassessed periodically. Ideally, you should spend the relatively small amount an appraisal costs on an annual basis but, at the very least you should have your engagement ring re-appraised at intervals of no longer than 5 years.
You may think the premiums you pay for covering an $8,000 ring are reasonable but, in 10 years, the ring may be worth $12,000 or more, and you don’t need the shock of any payout falling well short of the replacement value you need to get another ring. What may have started as a vintage engagement ring will often become an antique engagement ring, and that fact alone is likely to affect the value, as antique rings are certainly less common than vintage and generally more valuable.
Ideally, it is best if you go back to the same company who did the original appraisal, as they will already have copies of everything. Regardless, always take your original report (which you kept safe, right?) just in case.
What To Do If You Need To Make A Claim
Assuming you’ve taken note of everything above, and have a policy that covers you for whatever reason you have for making a claim, it will all come down to the paperwork. Your paperwork, mainly.
If the ring is stolen, for example, you will certainly need any police report that you have. If the ring is stolen from your home, you may also be required to prove that it was kept in a safe or another secure place. You can have an alarm, your own security patrol and even a couple of Dobermans, but your nightstand will not be considered “secure” as far as your insurance company is concerned.
If the ring is lost and assuming you have sufficient coverage, the insurance company may require reassurance that you had taken reasonable precautions against losing it. Whatever happens, don’t be tempted to embellish the facts. There’s nothing you can possibly say that they haven’t heard – and seen right through – before.
Don’t bother telling the person you speak to at the insurance company how much your ring meant to you, as they will have neither the time nor the inclination to worry about your sentimentality, however genuine and well-meaning it might be. Once you start a claim, you are basically involved in a business transaction, so just bear that in mind. There’s unlikely to be any negotiation, but keeping things professional will almost certainly bring the situation to a speedier conclusion than if you scream and shout at someone who might even be getting paid less than your ring is insured for.
Your insurance has not only handled more claims than you could ever imagine, it’s also much better at it than you will ever be, but that doesn’t mean you shouldn’t be ready for them every step of the way, from the policy you buy to the claim you make. The key is just being prepared:
- Make sure your ring is valued appropriately by an appraiser the insurance company recognizes.
- Buy the right policy. Check the finer details and ask the right questions.
- Check the exclusions. If you have any doubts, ask.
- Check any deductible.
- Keep your appraisal report current.
- Stick to the terms of the policy. If your ring needs to be kept in a safe, do that.
- Always tell the truth if you do need to make a claim.
Your insurance is not judging you when you take out a policy, nor when you make a claim, it just wants to know you’ve kept up your end of the bargain, Assuming you have, they will quite happily pay out. Okay, maybe not happily, but reasonably quickly.
The principle of being correctly insured is actually quite simple. Ask the right questions in the beginning, and you’ll have fewer questions to answer at the end. We know your grandmother’s antique diamond ring can never be replaced on a sentimental level, but that doesn’t mean you should have an engagement ring ever again. Insurance is one system which you can make work for you, so why not?
Afshin is a vintage jewelry expert who has been avidly collecting vintage rings for close to 3 decades. He believes that the greatest asset for a jewelry collector is reliable information, and so he does his part by writing educational articles online.
To learn more about Estate Diamond Jewelry, please visit their WeddingLovley Vendor Guide profile.