Planning to buy a special piece of jewelry for your spouse?
Consider a personal articles insurance policy for your jewelry. On a weekly basis we hear one of two stories about insuring jewelry from prospective or current clients.
- “Janet, she is so careful with her jewelry I cannot imagine that ever happening.”
- “There was this one time, Janet lost her ring. There went $3,000. We figure it was lost at the restaurant.” Or “stolen at the YMCA.” Or “fell off at the lake.” Or “we think it could have been the cleaning lady at the hotel.” Among many others…
What do both of these situations have in common? Limited to no insurance coverage
Homeowners insurance may provide limited jewelry coverage but the amount and type of coverage will vary among insurance carriers. For example, a homeowners policy may cover around $1,000-$2,000 in jewelry but can be subject to a high deductible and have limited coverage such as only if its stolen from your home.
What’s your comfort level?
We have clients that do not insure $20,000 diamond rings and we have clients that insure $500 rings. There is no right answer to this other than you should understand what you are willing to risk.
Here are your options.
Self insure your risk – Don’t do anything and automatically assume your limited to no coverage with your homeowners policy. We have clients in this category, one even says “If I can’t break or lose it, then I can’t afford it.”
However, if it makes you uncomfortable to wear or enjoy your jewelry then we would recommend buying some peace of mind through a personal articles policy.
Personal articles insurance – Schedule the important jewelry in your household or better yet get a “blanket” limit to cover all of your jewelry subject to a maximum limit. Cost varies but to give you a middle of the road idea, use a $1.00 rate per $1,000 in jewelry. For example, if your spouse has a $2,500 ring the insurance cost on a personal articles policy would cost about $25 a year with a $0 deductible.
Be intentional with your personal insurance and cover what has enough value to you. Talk with your trusted insurance adviser to best understand your options.
Jeremy Hyde | Colligan & Company