Should I Insure My Jewelry?

Similar to insurance for other types of assets, jewelry insurance is about protecting you financially from the unplanned and unexpected. Since jewelry is both small in size and high in value, losses and damage are easier to sustain and harder to swallow by “self-insuring” than with other assets you might insure.

You need not insure every piece of jewelry you own. In order to determine which jewelry to include on their jewelry insurance policy, most folks find their “sweet spot” by applying this rule of thumb we like to share: “Would I be okay paying for a replacement out of pocket?” If you purchased the jewelry recently, you will instinctively know this, because the amount you spent will be fresh in your mind.

If, however, you inherited the piece or have owned it for a long time, you should seek the services of a trained gemologist in order to determine current value.

Ultimately, you are in control of which items you want to insure. Many people use $2,000 as a “per piece” qualifier. Quite a few people also choose $500 as their qualifying number.

What About Insuring Priceless Jewelry Items? How Are They Handled by Jewelry Insurance?

Since insurance is about your wallet and not your heart, please know that each piece you insure needs to have a dollar value assigned to it, and that those values are in no way enhanced because your great-great-grandma’s irreplaceable antique daguerreotype photo was stashed inside that locket, or that a pendant was made in Borneo (sorry, no travel expenses to go back!)

Your General Homeowner’s Insurance Policy is NOT Enough for Fully Insuring Your Jewelry!

Many consumers believe their jewelry is automatically covered under their homeowner’s or renter’s policy. That’s because when your agent goes over your policy with you, there is a clause about jewelry. But, that clause typically has a total coverage limit (shockingly pretty low, like $1,500 to $2,500), but also a maximum per piece, meaning you might only receive, say, $500 towards your $5,000 ring. It’s hardly “ring insurance” if it only covers one-tenth of its value!

Furthermore, most standard homeowner’s insurance only covers specific types of claim events, with fire or other accidents being included…but “oops, I lost it” is excluded from jewelry insurance coverage on your general homeowner’s insurance policy. Yikes!

Specialized Jewelry Insurance to Protect Your Fine Jewelry is What You Need

The good news is that you have options for jewelry-specific insurance. One option is a special, additional policy, commonly called a “jewelry rider” attached to your homeowner’s or renter’s insurance. Your other options are one of several third-party insurance companies that sell jewelry-specific insurance.

Our Take on Third-Party Jewelry Insurance versus a Jewelry Rider

Since Babs is a vetted and approved State Farm Jewelry Replacement Specialist, she can speak to her experience dealing with that particular company extensively. “Overall, since State Farm has a dedicated team for jewelry insurance, I find that I can work my way through a trickier claim on behalf of our mutual client almost every time. If my appeal is technical in nature, I usually can be connected to a fellow gemologist that is on-staff at State Farm.”

But what about companies other than State Farm? Babs says, “Generally, the best companies with which to work through the jewelry insurance claim process are the ones who do not require you to acquire your replacement item through a specific company they contract, or that the only monetary amount you can be awarded will be equivalent to the replacement quote for which the contracted firm agreed to replace the item. These contracted jewelry replacement companies got the contract by promising to keep the insurance company’s costs down. I’m sorry to report that often, there’s “corner-cutting” and quality issues with the replacement items…and consequently, if the insurance company opts to just cut you a check, the amount on that check will also be too low to allow you to purchase the replacement item, of truly similar quality as the original, on your own.

“All this is to say: Before insuring with a jewelry rider through your homeowner’s or renter’s insurance, confirm that there is a process by which you can use the jeweler of your choice for any replacement you might need and that your jeweler has the ability to appeal the amount that is provided by the insurance company’s replacement firm.”

Jewelry Rider on Your Homeowner’s or Renter’s Insurance

Called a “jewelry rider,” “jewelry floater,” or “personal articles floater,” among other things, this is additional coverage that is attached to your homeowner’s or renter’s insurance policy.

Each item of jewelry is separately listed, and includes not just value, but also descriptions of type, quality, and size of gems; style, metals, and all other pertinent details. On occasion, and especially if you have many, many items to insure, an insurance company will accept a recent sales receipt, typically dated within the previous 12 months, for items under a certain value.

Some folks like the convenience of just one bill, and so getting a jewelry rider attached to their homeowner’s or renter’s insurance suits their needs. Other folks (often ones who have gone through the claims process for items other than jewelry) really like the idea of going with third-party jewelry insurance firms who specialize in jewelry, and also keeping their homeowner’s insurance premium unaffected by any possible future jewelry losses.

Third-Party Jewelry Insurance

Many people will ask, “Can you get jewelry insurance from a jeweler?” but not all jewelers can offer you third-party solutions to your jewelry insurance needs. The jeweler is not selling you insurance–but rather, it is through the jeweler that you are able to obtain this type of stand-alone jewelry insurance. There are many companies offering this type of jewelry insurance, but our preference are the ones that are offered by companies that truly specialize in insuring jewelry…often, they are the same companies that insure jewelers themselves, so they really “speak jewelry.”

Third-party jewelry insurance is not sold to you through a jeweler, but you typically can only access this type of insurance through a jeweler–but you are a direct customer of the insurance company itself. The two companies we like the most here at Alara do not offer jewelers commission, so you can rest assured that we are simply looking out for your best interests.

One third-party jewelry insurance company we particularly like offers the consumer 10 days of no-cost insurance, so the items are covered even before you leave the jewelry store. This buys you time to research other options, and everything is readily handled via your smartphone.

Another company we highly recommend is Gemshield, which isn’t quite as slick as Zillion, but is a super-solid jewelry insurance company we have worked with for many years. We have application forms on hand, ready to get you signed up with them as needed.

Contact us so we can share our recommendations with you, based on your individual needs. We are here to help!

What Does Jewelry Insurance Cover?

Total loss: whether completely ruined and irreparable, at the bottom of an ocean, or left on a sink at an international airport.
Partial loss: major stone missing or broken due to trauma, item itself requires extensive repair or remounting due to trauma (but be mindful that just like with your homeowner’s insurance, you generally don’t want to “ping” your insurance policy with minor losses).
Theft & robbery: self-explanatory…just be sure to file a police report.
Mysterious disappearance: just like it sounds, it’s gone and you have no idea what happened.

What Is NOT Covered by Jewelry Insurance?

Plain and simple: jewelry insurance does not cover losses due to normal wear-and-tear. This is why jewelry maintenance is of the utmost importance.

In other words, if you lose an accent stone in your ring because the prongs that held it in place were thin from wear, and you failed to keep up with maintaining those prongs…it’s on you. The maintenance itself always falls to you, as well. So, if you have a loss due to wear-and-tear, that’s the perfect time to bring your piece up to good and wearable condition.

The other thing that is not covered by insurance is the expense to custom craft a replica of your original ring, unless the original was custom made. So, if that mass-produced ring from the 1980s is insured, your coverage is for a ring that is also mass-produced, made of the same type and approximate amount of metal, plus the same type, quantity, and quality of gems contained therein. But, you will be offered a currently available style–not a replica of the original.

In the case of antique items, your replacement offer will include something of as similar as possible style and era…but will not allow for travel to locate it.

In Most Cases, You Need a Recent Appraisal from a Trained Gemologist

With the exception of low-value items (which perhaps can be insured using an invoice), most jewelry insurers require a recent appraisal, performed by a trained appraiser or gemologist. Each insurance company defines “recent” differently, but no appraisal is accepted after the three-year mark–and some companies require an appraisal that’s less than a year old.

How Much Does Jewelry Insurance Cost?

Jewelry insurance premium prices vary by state, and sometimes county or even city. The differences in pricing are attributable to the past record of claims in various areas. For example, in Montana, the annual premium for a no-deductible jewelry insurance policy is 1% of value. In many places outside of Montana, that percentage is higher–typically maxing out closer to 3.5%. A 2% rate seems to be fairly common throughout the US.

Deductible or No Deductible?

Your insurance agent might advise you, in the name of reducing your premium, to get a jewelry insurance policy that has a deductible. Having dealt with a number of customers who have needed to file a jewelry loss claim, it seems everyone with a deductible has regretted having one. The reason is, you literally save a few bucks on the premium, but you’re suddenly out a large amount ($1,000 or more) when the loss actually occurs.

Therefore, it is our recommendation that you get a no-deductible jewelry insurance policy or rider.

Replacement Policy or Cash-Out Settlement?

Back in the day, “Cash-Out” jewelry insurance policies were far more common. Basically, in this scenario, if you incurred a total loss, the insurance company would literally cut you a check for the Retail Replacement Value, and you did with that money as you pleased. Don’t want to replace the item, but you were eyeing some really nice garden furniture–no problem, you could use the cash for whatever you liked!

We hardly ever see policies like that being issued these days. In fact, it seems only people who originally acquired a cash-out policy quite a few years ago, and never allowed the policy to lapse, have such policies in force today.

Now, this is NOT to say that there is no way that you will be given a check at the end of the claims process. But, the way the amount on that check is calculated is not truly related to the retail replacement value listed on your appraisal. It’s related to the amount the insurance company (or an outside company contracted to do their jewelry replacements) will have to pay to do the replacement.

That’s right–while insurance companies require a retail replacement value appraisal in order to insure the jewelry described in that appraisal report, those value figures end up representing the maximum amount of coverage, but not how much the claim will be settled for. Whether they are a large insurance company who actually has a jewelry division and vetted jewelers to assist them with replacement, or they have an outside company to whom they farm out all their jewelry replacement claims, the insurance company’s internal “claim amount” is calculated based on what the wholesale cost is to perform the replacement/repair plus a percentage of profit on top of that (which either goes to the jeweler performing the replacement/repair or to the contractor the insurance company hired to do so). That profit percentage is something that is typically controlled by a contract between the insurance company and any vetted jeweler they use, or the contractor they hired. That profit is far lower than standard retail pricing would allow for, with the idea being that the insurance company is “buying” so much jewelry in the course of conducting business, that they are entitled to a discounted rate.

So, with many policies, if you decided you wanted to just be “sent a settlement check,” the amount on that check would be the amount that the insurance company would have paid for actually performing the replacement/repair. Clearly, that is a lower amount than standard retail, so you will find your money won’t “go very far,” unless you find a jeweler who is willing to work within the budget determined by your settlement amount.

Because of how jewelry insurance replacement works, you want to make sure that you acquire your insurance through a company that allows you to use the jeweler of your choice, and that they are willing to negotiate with that jeweler. If you are forced to use the replacement contractor of the insurance company’s choice…well, all you know is that the contractor’s customer is the insurance company, not you. Therefore, they are looking out for your insurance company’s bottom line–not your satisfaction.

What is the Claims Process Like?

While the details vary a bit from company to company, here is the basic outline of the claims process:

If you suffered the loss due to a crime, be sure to file with the local law enforcement agency, and get a copy of the report…the insurance company will be asking for this.
Regardless of the reason for the claim, contact your agent or the insurance company directly.
The insurer will direct you to acquire a replacement quotation from a local jeweler, or they will ask you to send the piece to their contracted replacement firm [WARNING–the latter is exactly the scenario we advise you to avoid, by selecting an insurance company who does not require this].
You will bring the item (in the case of partial loss) or all the info you have on it (in the case of complete loss) to the jeweler of your choice.
The jeweler will either give you or the insurer the information they are seeking.
The insurance company will typically get back to you and explain that you are either fully covered or partially covered (usually because you failed to get your appraisals updated over the years).
After you give a solid approval to the insurer, the work will proceed, and the insurance company will either give you a check (and you pay the jeweler separately), or they will pay the jeweler directly.
As a matter of course, the jeweler should provide you with a new appraisal.
You submit the new appraisal to your insurer, and let them know it is an update of an existing piece, as opposed to an additional piece.

How Do You Account for Changes in Jewelry Value?

You should have your jewelry re-appraised:

Every three years, regardless of anything else mentioned here.
Whenever you move to a different area.
If your jeweler recommends it, because of a drastic change in metal market values or gemstone values that your piece contains.

Why Partnering with a Trusted Jeweler Helps You with Insuring Your Jewelry

“Arm’s Length” value assessment so you can decide if you even want to insure a particular piece
Professional Jewelry Appraisal Services

Initial appraisal if one was never performed, or if more than 10 years have passed since the last one was performed
Reminders to update appraisals every three years
Recalculating appraisal values every three years

Your Connection to Third-Party Jewelry Insurance Providers

While your jeweler doesn’t sell you the jewelry insurance you need, they are key to having access to the best third-party jewelry insurance companies.

Possible Claims Assistance

Look for a jeweler who is a vetted Jewelry Replacement Vendor for one of the major insurance companies (for instance, Alara is a listed State Farm Jewelry Replacement Jeweler), since they will know better how to handle the replacement side of a claim.
Since disagreements can arise, you will want a jeweler like this “in your corner” to deal with the insurance company.

Accurate and Professional Jewelry Replacement and Repair

Since the entire claims process can be confusing and emotional enough as it is, be sure to find a jeweler who has the experience, patience, and professionalism to assist in replacing or repairing your insured jewelry. There definitely are jewelers who do not have the needed “bedside manner” to properly assist you during this fraught time.
Your replacement or repair is best done “in-house,” so also be on the lookout for a jeweler who has an actual on-site goldsmithing staff.

5 Tips for Protecting Your Jewelry

Keep copies of purchase receipts. Having them might make it easier to replace or repair.
Take pictures of your jewelry–especially if the pieces were custom-made. This is for the jeweler who will be assisting you with replacement/repair.
Store valuable jewelry in a secure place, such as a safe deposit box or in a heavy at-home safe that’s bolted to the floor and out of sight.
Consider not putting all your jewelry in one place in your home.
Whenever possible, don’t bring any fine jewelry with you whilst traveling. Obviously, some travel involves special events at which wearing jewelry is desired…try to bring no more than you will wear for the event(s) in question, and do try to keep it on your person as much as possible. Consider traveling only with lower-end or costume jewelry that looks like pricier pieces, rather than with high-value items.

We always say, the best customer is a knowledgeable customer. So, if you’d like to learn more, we’ve outlined a few suggestions below.

Want assistance from our Jewelry Insurance Concierge?
Learn more about Appraisals.
Now that you know about Jewelry Insurance, learn what a Jewelry Warranty covers and protects you from.
Schedule a No Charge Jewelry Cleaning and Inspection today!
Have a lot of items, but not sure what’s worth insuring or not, or even what’s real or not? Schedule a one-hour Professional Jewelry Box Review.