Should I Insure My Rings and Jewelry?

Here's another cold, hard fact: life happens, to put it politely. A gorgeous diamond ring may be on your finger one moment, then gone like yesterday the next. Theft is one reason. Or, maybe the little clutch-back that holds a post earring in place slips off, and suddenly you're only rocking one piece of the rock in one lobe, pirate-outlaw style.

Or, even if you don't lose the ring, earring, watch, bracelet, brooch, necklace or tiara (hey, girls can dream!), damage also happens. Gems have been known to pop out of their settings, for example, especially when we wear and enjoy pieces like rings every day.

Losing fine jewelry is painful. Of course, there's the cost of replacing it, and that's gotta hurt. But also, precious jewelry often carries emotional weight as well as financial value. Diamonds, gold, pearls and other precious stuff most often come to us as gifts from loved ones, including family inheritance. So the loss of precious jewelry may carry a double sting.

That's the bad news. The good news is that jewelry insurance is not just for rich people. In fact, it's all about protecting the value of your investment, and the entire shebang usually equates to about 10 cents on the dollar: appraising and insuring a diamond engagement ring, for instance, may initially cost you $300, and less the following year since you already have the appraisal. Not bad, considering the ring itself may have cost $3,000 or much more.

HOME, SWEET HOME

Here's why your homeowner's insurance or renter's insurance won't cut it if you lose or damage your fine jewelry: they aren't jewelry specialists.

Most homeowner's and renter's policies offer a very low figure for standard coverage for jewelry, usually about $1,000 - $1,500 for theft. They don't cover "mysterious disappearances". And you will need to pay a deductible on the claim on top of this. So it's not much coverage. Homeowner's and renter's insurance companies specialize in replacing roofs in tornadoes, carpets in floods, fire damage and other disasters and catastrophes not involving your jewelry.

If you want to insure a more valuable piece of jewelry through your homeowner's or renter's insurance, you will need to purchase a separate rider specifically for your jewelry items. Another thing to consider: if you do file a jewelry claim, then your total homeowner's or renter's jewelry insurance premium will go up for the next few years.

START BY FINDING A QUALIFIED APPRAISER

Start with this: your appraisal must be done by someone who is professionally trained as an appraiser, and who is a graduate of Gemological Institute of America. Ask to see their graduate diploma as a GIA Graduate Gemologist. This is not mean or pushy. This is taking care of your investment. Unfortunately, many folks in the jewelry industry claim they are GIA Graduate Gemologists, but they are not. Here is how to verify GIA education credentials.

Note: someone who has taken a few GIA classes and not completed the curriculum may be a nice person, convenient, a local neighborhood business, a great salesperson. All good, but without the diploma, not the right person to do your jewelry appraisal.

Also, whoever does your appraisal must be an active member of the National Association of Jewelry Appraisers, and adhere to their professional code of ethics. Click here to find a NAJA jewelry appraiser.

The appraisal process requires credentialed skill. An insurance company adjuster uses the appraisal you provide to handle your claim, if and when the time comes. If the appraisal does not cover all aspects of the insured piece, your claim resolution will not be a happy one.

Not every jewelry store is qualified to issue accurate and detailed appraisals of jewelry. A weak appraisal will not help your insurance adjuster if it lacks detail, inflates value of the piece, or is inaccurate in other ways. Most poor appraisals are simply a brief description, along the lines of what you'd find on a sales receipt for the item. It's not enough to help you get your value back.

Bear in mind, that appraising a vintage, antique or custom-made piece of jewelry may be more challenging than assessing modern, mass-produced pieces in terms of insurance replacement.  One reason being that diamonds were cut differently 100 years ago.

And, you need great photos. Today, this is literally a snap. Your phone can capture awesome images of astonishing clarity and resolution. Take lots of shots from every angle, and store them onto a flash drive for safekeeping. Date the images.

ON THE SUBJECT OF APPRAISAL ETHICS

Warning: Do not use an appraiser who wants to charge you a percentage of the appraised value as their fee. This practice is, in a word, sketchy. It's highly unethical. Jewelry appraisers who charge a fee that is based on a percentage of the appraised item's value tend to inflate the value so that they can pocket some quick cash. If an appraiser quotes price as a percentage fee, take your precious gems and your precious self elsewhere.

WHAT IT WILL COST AND HOW LONG IT WILL TAKE

Rates for your appraisal will vary depending upon the location and experience of your appraiser, the jewelry store's overhead and other factors. The price can range from $75 - $150/hour. Depending upon the complexity of the piece, sometimes it can take an hour or more to appraise your piece. On the other hand, sometimes several items can be appraised within one hour. Given the skilled nature of this work, and the credentials required to do it, it is a solid investment.

When you have your complete appraisal, including your digital file of photographs, in order, you're ready to apply for the insurance itself. Be sure that you read and understand your policy fully before making your commitment.

BONUS: FREE JEWELRY INVENTORY SHEET

Keep yourself organized and inventory your fine jewelry.   Create a document, maybe an excel spread sheet, and list your jewelry, with descriptions, when and where purchased, and price paid.