Recently I ran into one of my co-workers near our office building's elevator. As we waited for it to arrive, we were not impressed with just how long it had been taking to really make it towards the fourth floor, cheap it had been on the fritz for some time.
At the eventual sound from the “ding”, we entered into the elevator and I learned something that made the machine's inefficiency appear to be the least of our troubles.
“I lost my wedding band in here a few days ago,” my coworker explained. After i finished gasping, he was quoted saying that the ring had fallen off his finger and on the elevator shaft, for the reason that just-wide-enough gap between your floor from the building and the elevator. The technician tried to think it is, but the search turned up fruitless. The chances of having it back weren't great to begin with. It was like, well, looking for a wedding band in a elevator shaft.
When you write about personal finance and insurance as a living like I actually do, hearing a story like this sends a mundane albeit relevant thought through your mind: I really hope he's jewelry insurance.
Something that expensive ought to be shielded from damage and loss. But which kind of insurance coverage is best for an engagement or wedding band? These things carry a ton of sentimental value, not to mention actual cash value. So in the event you insure them under your home or renters insurance policy, via a third-party jewelry insurer, or just rely on the warranty in the jeweler?
First things first
No matter which way you decide to insure your ring, you need to first find out how much the ring is worth, as this is quite a significant determining element in the amount and price of coverage you will get.
It's best to possess the ring appraised by either a certified appraiser or jeweler. The price for this service can differ. Some appraisers charges you a set rate for the service; others might take a percentage of the value of the ring his or her fee.
Appraisals shouldn't be a one-time deal, either. Because global financial markets are constantly in flux, the need for your ring will change, too, based on what gemstones or precious metals it's made out of and just what those materials are presently being sold for.
Industry strategies for how frequently to appraise vary from every 2 to 5 years. And whenever you get an updated appraisal, you need to tell your insurer, because you don't wish to risk being underinsured. The updated value may also change your premiums.
Some insurers, for example Jewelers Mutual, which provides coverage for all personal jewelry items and jewellery businesses in the U.S. and any place in Canada except for Quebec, will provide something called “inflation guard protection, or insurance value adjustment.”
“This feature will automatically adjust the insurance coverage worth of insured items when an up-to-date 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 most recent recent results for Jewelry and Watches within the Consumer Price Index, and protects the customer using their jewelry items being underinsured.”
Once you've got a good handle around the value of your ring, you can start doing all of your research on which path you want to take to insuring it.
Insuring the ring under your home or renters policy
One of the most common ways to insure an engagement or wedding band is within home, condo or renters insurance policy.
Insuring your ring this way is relatively straightforward, since keep all your property insurance with one company.
However, most home and renters policies will include merely a base quantity of coverage for jewelry, or perhaps a limit – usually around $6,000 or less for every claim you make. So, the first thing ought to be exploring the policy language to determine what the cap is perfect for jewelry items, and whether you will 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 particular amount of coverage is usually based on figuring out just how much it would cost to exchange 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 get the cash value for the ring (though keep in mind that your insurer will take into account just how much the ring has depreciated in value because you got it) or perhaps a replacement ring that's similar in quality and kind. You may need to hand over any receipts from appraisers or the jeweler that you purchased the ring.
Insuring the ring using a jewelry insurer
Another method to insure your rings is to buy standalone jewelry insurance from a jewelry insurer.
“Each clients are unique with what they offer in terms of their cost and degree of coverage,” says Howard. “Warranty products will cover damage to the item and perhaps a few types of losses, for example where they lose a piece of the product that they purchased. Insurance plans are usually 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 determine what amount and kind of coverage you're getting with each provider.
Each insurer asks for different information, but if a person applies for a policy with Jewelers Mutual, they'll need to supply the worth of the ring, who is going to be wearing it (and just how often), where it will likely be stored, and how it will be used. These factors determines the amount of coverage, with deductibles that can range between $0 to $25,000, with respect to the worth of the ring, says Howard.
“We'll also ask for permission to operate an insurance score,” he states. An insurance score, he explains, is a way for insurance providers to determine your insurability by taking a look at your credit or financial habits. It's completely optional in Canada and also the customer must consent to it.
A jewelry policy at Jewelers Mutual will typically cover loss, theft, or harm to the ring.
“Let's say you hit your engagement ring along the side of the table and you chip the stone or bend or break the prong or setting store the stone in position,” says Howard. “Those are usually types of perils or losses which 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 essential thing is making sure you have the appropriate coverage when you need it.
“The minute it leaves the jewelry store,” says Howard, “it's the individual's responsibility to ensure that it's protected.”