Does a Diamond Ring Fall Under Homeowner's Insurance?
Homeowner's insurance policies typically provide limited coverage for jewelry. Policies generally do not cover jewelry, or gems from jewelry pieces, that are simply lost. Read your homeowner's insurance policy carefully to determine whether your valuables, such as a diamond ring, are adequately insured.
Mysterious disappearance is a term often used by insurance professionals to describe a claim for lost jewelry or a lost gem from a piece of jewelry. The disappearance of the item might not actually be a mystery – the insured person might know exactly where the item was lost – but it might be irretrievable. For example, suppose a woman might lose her wedding ring while swimming in a lake. She knows where the ring is, but to her, it is lost forever.
Most Policies Provide Limited Coverage
Insurance policies differ from one company to the next, but policies typically limit coverage for jewelry and other types of items that might be very valuable. The most common types of homeowner insurance policies impose a limit of $1,500 for loss by theft of jewelry, watches, precious and semi-precious stones. This means that, regardless of how many jewelry items might be missing following a theft loss, the insurance company will not pay more than $1,500 for the loss.
There is no limitation on jewelry if the loss occurs as a result of another insured peril. So, for example, if jewelry is damaged as a result of a fire the items would be covered. There is no coverage at all for jewelry or gems that are simply lost because mysterious disappearance is not a peril covered under the policy.
Many insurance companies offer a comprehensive policy that provides more generous coverage than the average policy. Requirements for this type of policy are generally more stringent. The comprehensive policy also places a special limit on loss of jewelry and it might also provide coverage for mysterious disappearance. This type of policy provides around $1,500 coverage for loss by theft, or misplacing or losing jewelry, watches, precious and semi-precious stones. Check with your insurance company to see how much their comprehensive policy will cover when it comes to jewelry.
Jewelry floaters are the best way to insure valuable jewelry. Items insured under a floater are normally covered for any type of loss – at the value indicated on the floater. A jewelry floater, also called a rider, is an endorsement attached to an insurance policy to add coverage for specific items of jewelry.
Items insured under a jewelry floater are scheduled, meaning they are specifically described, and their value is clearly indicated. Before agreeing to insure high-value jewelry items, most insurers will request photos and current appraisals to accurately establish value. Jewelry floaters add to the premium of the policy – but are a wise investment for those who wish to protect valuable jewelry.
Lynn Knauf has been involved in the insurance industry for more than 25 years working in a variety of positions including underwriting, claims and government affairs. She has written on insurance and political issues since 2010. Knauf holds a Chartered Property Casualty Underwriter designation.