Uninsured jewelry
In recent surveys, over 60% of jewelry owners said their jewelry was not insured! That's a shockingly high percentage. Who doesn't insure jewelry? Why is something so valuable not being insured?
Let's take a look at what's going on.
If it's valuable, you insure it, right? Your house, your car, your health. Why doesn't every jewelry owner insure their jewelry?
• I didn't know I should insure it.
Mind-boggling as this may be to those of us who deal with jewelry or insurance, a surprising number of survey respondents said they didn't know they should insure their jewelry. No one told them. Surely this is a good reason for agents to review their files of policy holders with other kinds of insurance, and check whether they have jewelry that should also be covered.
• It's under warrantee.
Many consumers think the warrantee that came with the jewelry purchase is the same as insurance. "Warrantee" sounds reassuring, and the paper may look impressive, but a warrantee from a retailer, brand, or manufacturer typically covers defects in the materials or craftsmanship of their jewelry. It does not cover repair or replacement if the jewelry is lost, stolen or damaged.
• Insurance is only for valuable jewelry.
Some people do own jewelry that was not expensive to begin with, and they don't find it necessary to add the cost of insurance. At what price jewelry is considered "valuable" is a determination each individual makes on their own. In one survey, 27% of those who owned jewelry worth more than $10,000 did not have jewelry insurance. Perhaps they were comfortable with self-insuring. Or they just assumed insurance was more costly than it is.
• It's covered on the Homeowner policy—they think.
It seems that many people mistakenly believe their jewelry is insured when it's not. Homeowner policies typically have a per-item limit of $1,500-$2,000. That is not enough to cover the average engagement ring, which these days costs about $6,000 according to The Knot.
Also, Homeowner policies cover only certain perils, such as fire and theft. The most common jewelry losses, damage and mysterious disappearance, are not covered. A stand-alone jewelry policy would offer this coverage but, according to one survey, only 9% of jewelry owners have such a separate policy.
Most Homeowner policies have significant deductibles, so that any claim is likely to result in out-of-pocket costs. And most insureds do not realize—and they are usually not informed—that for jewelry covered on a Homeowner policy, any claim for a jewelry loss will count as a Homeowner loss and could impact their Homeowner coverage.
• 
I always wear it, so it's safe.
Often the engagement ring is the most, or only, valuable jewelry owned. A woman may well feel her wedding jewelry is not going to get lost because she's always wearing it. And if the house is burgled, her ring is safely on her finger, not at home.
However, accidents happen. She is overlooking the possibility of damage while wearing it, including the potentially very expensive loss of a stone.
• I was going to insure it . . .
They had the intention but, with one thing or another, never got around to it. The thrill of the purchase, or receiving the ring, or preparing for the wedding, was the center of attention and insurance got left behind. The more time that passed, the less important became the idea of insurance. Few consumers—or insurers—realize that 70% of personal property theft losses are jewelry.
Of course, most people think that the hazards covered by a policy will not happen to them. However, one insurance company survey found that, of those who did buy jewelry insurance, 59% used it to file a claim within the past ten years. That statistic is a good argument for buying jewelry insurance!
Valentine's Day is a major jewelry gifting occasion. This is a good time to remind clients to add any new jewelry to their existing policy or to discuss the benefits of a standalone jewelry policy.
It could also be worthwhile to review Homeowner policies to see whether jewelry is sufficiently covered, or whether it would be better covered in a standalone policy.
In your review, bear in mind that Homeowner policies have value-per-item limits that may leave a client's jewelry underinsured. Be sure clients understand that an HO policy does not cover jewelry damage or mysterious disappearance, the majority of jewelry claims. Also, with jewelry on the HO policy, any jewelry claim is considered a Homeowner claim and may impact the HO coverage.
On a damage claim, ALWAYS have the jewelry examined in a gem lab that has reasonable equipment for the job and is operated by a trained gemologist (GG, FGA+ or equivalent), preferably one who has additional insurance appraisal training, such as a Certified Insurance Appraiser™.
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