How to Insure Jewelry for Cheap (or Free!)

by Daniel Packer on 30 May 2011 16 comments

I won't won't tell you the whole story of how I proposed to my future wife, but with the ring came another expense — jewelry insurance. We wanted to make sure that if it was lost, stolen, or damaged considerably, that we would only be responsible for a fraction of the cost. (See also: Classy Weddings on the Cheap)

I didn't do my research at the time because I was in a rush to get some sort of insurance for it, and now it looks like there are some fantastic options that I passed up. After doing a lot of research, it turns out that jewelry insurance is fairly inexpensive, and in some cases you can get it for free!

There are two ways to insure a piece of jewelry. You can either go to a company that sells specific jewelry insurance, or you can have the piece of jewelry added to a homeowners or renters insurance policy.

If you choose to go with the jewelry-specific option, your choices are limited. There aren't many companies out there that provide personal jewelry insurance, but Jewelers Mutual is the most popular.

Private Jewelry Insurance

As a general rule, you can expect to pay between $1 and $2 for every $100 worth of jewelry you want insured. So a $10,000 engagement ring would cost between $100 and $200 per year. These prices change significantly based on location (in Washington, DC, for example, it would cost $105 per year to insure a ring of that price, but in Los Angeles, the same ring would cost $200 per year to insure).

It's important to review the insurance policy before buying because not everything will be covered. Wear and tear are typically not part of the policy, and a defect in the jewelry wouldn't be covered either (that would have to be taken care of by the jeweler who created it).

Insuring Jewelry With Homeowners or Renters Insurance

The second option is having jewelry added to a homeowners or renters policy. This is probably the cheapest way to go if it's available. Why? While each state has its own rules, a renters policy has to have a minimum amount of coverage, typically $15,000 to $20,000. If the contents of your belongings don't add up to $20,000, then you have some space left over. Let's use an example. If you have $5,000 worth of valuables at home, buy a ring for $10,000, and add it to the renters insurance policy, you'll still be within your limit, and the ring would be covered should something terrible happen.

Which Option Is Better?

If you have renters or homeowners insurance and have the option to add a piece of jewelry onto the policy at no cost, that's definitely the best option! If you don't have renters or homeowners insurance and are deciding between that and private jewelry insurance, take a look at rates for both. It never hurts to compare, and when I looked online for renters insurance rates (just a few days ago because I was curious) in Washington, DC, a $15,000 policy cost just $81 per year. Online I found varying rates (as high as $131 for $20,000 worth of coverage), so comparison shopping is the way to go!

Right now, the ring I bought is insured with a private insurer, but it looks like it's time for me reconsider!

Is your jewelry insured?

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Guest's picture
Guest

I think the Wise (Bread) move would be to not have a ring so expensive that it needs insurance. It's not very wise to just follow along with the race to the biggest diamond.

Guest's picture
Guest

um, I don't know what renters or homeowners you're looking at but that is NOT true about jewelry for most policies. Most policies limit jewelry coverage to $1000. You have to know to tell your agent to raise the limit to $2500 or $5000, etc. And to top it off, for $2500 limits, you have a $1500 per item limit and for the $5000 limit in the aggregate, you have a $2500 per item limit. For costume jewelry, this is fine, but for wedding rings and rolexes, etc., you need a separate policy. Regular homeowners and renters is not enough. Every company has slightly different limits.

And btw, the same is true for boat items, car items (built in radar detectors and other add ons like built in DVD players and DVDs stolen from a car), persian rugs, stamps/comic book collections, computer equipment, riding lawn mowers (which have no limits, but are only covered in certain circumstances), money, gold/silver (including coins -- which are paid at face value not at the value of the silver, etc.), etc.

Daniel Packer's picture

While this may be true of some policies (they may vary by company or location), it's not true of all. I know people who have this type of policy and adding an engagement ring wasn't a problem.

Also, this can definitely work for cheaper jewelry, there are a lot of factors that go into it.

Another great way to reduce insurance costs for jewelry is to play around with deductibles. The more you're willing to pay in an emergency, the lower the yearly cost.

Guest's picture

I was going to say the same thing. Jewelry is often subject to specific limitations, so if you're insuring a ring, don't assume the value is covered under your policy. Ask if a jewelry rider is necessary.

Of course, it simply blows my mind that anyone would spend this much on a ring. I can think of 100 better ways to save/spend $10-15k than wear it on my finger. If you're planning on having kids, for example, investing that now would practically pay for their college educations.

Daniel Packer's picture

It's true, rings can be expensive, and if you and your significant other don't care and if it doesn't have meaning, then it's not worth it.

In my case, it was worth it. The sparkle of my fiance's face is worth every penny I spent to make that diamond sparkle.

Guest's picture
Marcus

Why spend that much money on an engagement ring? Do you know a $7,000 ring can end up costing you $450,000, if you put it on a credit card and just pay the minimum during the life of the purchase? Buy a simulated or synthetic diamond ring, and don't worry about the insurance or the debt. They look the same and come with a lifetime warranty on the stone . .. . .just a thought.

Daniel Packer's picture

That's silly, you can say the same thing about a car or any major purchase. Should you not buy a car because if you're irresponsible it could be expensive? For me, I got a discount by paying cash instead of credit!

Daniel Packer's picture

That's silly, you can say the same thing about a car or any major purchase. Should you not buy a car because if you're irresponsible it could be expensive? For me, I got a discount by paying cash instead of credit!

Greg McFarlane's picture

Daniel, I've got to call you out here.
Buying insurance for a car or a house makes sense: the thing you're insuring has utility, and presumably must be replaced. But buying insurance for a useless trinket? You can live without a ring.

(I'm using the dictionary definition of "useless". A ring has no use, unless you're the Green Lantern.)

I (obviously) think wedding rings are a giant waste of money, but I understand that's a minority opinion. What I really don't get is this: if a ring has a value that transcends price, is irreplaceable, etc., what's the point of replacing it? Should you need to cash in on the insurance policy, the item you'll be getting in return will never be the sentimentally charged original.

And I thought the jewelry industry had already reached its limits for playing on people's emotions. Apparently, it hadn't.

Daniel Packer's picture

Interesting point of view. Did you know that many people upgrade their diamond after 5, 10, or 20 years? In that case, it definitely makes sense to get insurance! I'm not in that boat, I think there's a lot of sentimental value, so saying you want something larger is just another way of saying, 'it's not good enough.'

If you lost something sentimental (and highly valuable), wouldn't you rather get the money back and buy something new and beautiful, or simply say, 'well, we had a good run, but our symbol and the memories that went with it are gone. o well.'

Guest's picture
Pam

I wish I had read this post a year ago. In February I lost a Pandora bracelet my grandmother had given me. When she first gave it to me it wasn't worth too much ($150 or so) but as time went on and charms were added, the value of the bracelet was much more than $500. And each charm we added, we did for a reason. That bracelet meant a lot.

Clearly, I can replace the entire thing. Just go to a Pandora store and start from scratch. But it would have been much nicer to have gotten it added to my renters insurance and been able to get the money from there instead of my savings.

Camilla Cheung's picture

What a useful article! I never even thought of asking whether my ring is covered under our renter's insurance. Now it's on my to-do list! My ring isn't worth in the tens of thousands, but if I lost it, I'd still like to get a little money back, especially if insuring won't cost me anything extra.

Guest's picture
Steveo

I am sorry, I know your intentions are good but this is the worst advice ever! If you think that combining your $10,000 ring with your $5,000 of personal property will work on a $15,000 renters policy, you are dead wrong! This person would never get paid if they had a claim.

I know policies vary by state, but I know they don't vary that much. You really need to double-check this information, people are relying on your accuracy.

Guest's picture
Guest

Downside to adding to your homeowners is if it's lost stolen etc and you make a claim on your homeowners insurance it then adversely affects the price of homeowners insurance for the next 3-5 years as well as affects your eligibility to shop for new homeowners insurance. I always advise my clients not to add it to your homeowners policy. There are many stipulations and restrictions that come with adding the jewelry onto homeowners whereas with jewelry specific insurance policies there aren't.

Guest's picture
Guest

I am sorry but this is terrible advice. Most insurance companies will not insure the cost of an expensive piece of jewelry without a) an appraisal, and b) an additional rider. No one should ever assume that their jewelry is covered under their policy, which will likely only cover their loss up to $2500 (not including the deductible). Additionally, a home-owner's policy will generally only cover the ring for the wholesale replacement value, meaning that a ring that appraised for 11k may only warrant 5 or 6k - whatever their jewelry wholesale partner says they can replace the ring for. In the case of antique or estate jewelry, or other items that are not easily reproduced or have more intangible value, a jewelry specific insurance which will replace the item based on retail replacement value is the best way to go. Do your research!

Guest's picture
Guest

You're correct about everything except for one thing. If you buy your ring from a wholesale jeweler, your retail appraisal can be as much as double what you paid for it. This is the case for me. I'd rather have the ring insured at the wholesale replacement value because that's what it would cost me to replace it from my wholesale jeweler if something were to happen. Also your policy is much cheaper in this case since you don't have to insure it at the bloated retail appraisal price.