Why homeowners insurance isn't enough if you're buying expensive jewelry — and what you can do instead

Why homeowners insurance isn't enough if you're buying expensive jewelry — and what you can do instead

February 9, 2021
  • If you purchase an engagement ring or other jewelry, you may need to add a rider insurance policy.
  • Most homeowners and renters insurance policies have a limit of $2,500 for jewelry coverage.
  • You may need an appraisal or receipts to get a rider policy or standalone jewelry insurance.
  • Policygenius can help you compare home insurance policies to find the right coverage for you, at the right price »

Jewelry is the preferred gift for Valentine’s Day, and the holiday is also one of the most popular days to get engaged. It is also when most customers come in to insure their jewelry, according to Bryan Howard, Director of Product Management at Jewelers Mutual.

If you’re purchasing expensive jewelry, such as an engagement ring, you’ll want to make sure it’s properly insured. Most homeowners and renters insurance policies have coverage limits for jewelry, so you may need to purchase additional insurance to cover your purchase if it is lost, stolen, or swallowed by the family pet.

Do you need jewelry insurance?

If you’re purchasing jewelry, ask yourself the following questions to decide whether you need insurance.

  1. Can I afford to spend that much money on another ring if I lose it? If not, then you need jewelry insurance.
  2. Is your jewelry worth more than the standard limit of your homeowners or renters insurance policy? If yes, you need to add a special jewelry rider or purchase stand alone jewelry insurance. Howard noted that standard homeowners and renters coverage is up to $2,500 for lost or stolen jewelry.

Note that jewelers can’t sell insurance themselves; they can only provide a warranty to cover manufacturing defects or damage, but not loss or theft.

Your home insurance policy may not be enough

Most homeowners and renters insurance policies only offer limited coverage in the event that jewelry is damaged or stolen. If you have an engagement ring, heirloom, or other special jewelry pieces, you’ll need to get special coverage beyond your homeowners or renters policy.

Lost or stolen jewelry is covered under “named peril” for homeowners and renters insurance. An insurance peril is an event that may damage your home or belongings, like theft, fire, or a storm. 

Homeowners insurance falls into two categories: named peril and all (open) peril. A named-peril policy covers you for listed events, like a fire, storm, or theft. An all (open) peril policy covers just about anything that might happen, unless your policy specifically notes that it’s not covered.

The difference between homeowners/renters insurance and standalone jewelry insurance is the type of peril coverage. Jewelry would fall under a named peril with a homeowners or renters insurance policy, but under a floater or add-on rider policy it will include named perils and some accidents. With personal jewelry insurance, on the other hand, both named and open peril are included — meaning any event is covered.

Here’s a comparison of the jewelry coverage you can get with homeowners or renters insurance, a floater or add-on rider policy for homeowners or renters insurance, and a standalone jewelry insurance policy such as Jewelers Mutual.

CoverageHomeowners/renters insuranceFloater or add-on rider to home insuranceStandalone jewelry insurance
LossNoYes — appraised valueYes — appraised value
TheftYes*Yes — appraised valueYes — appraised value
Damage****Yes — appraised value
Mysterious disappearance (unexplained loss)NoYes — appraised valueYes — appraised value
Claims processMay require you to use jeweler of insurance choice. May require multiple estimates.May require you to use jeweler of insurance choice. May require multiple estimates.Repair or replacement with same kind and quality (up to the value on your policy) from the jeweler of your choice; no need for multiple estimates
Effect of claimsClaims may affect status of entire policy, including coverage for your homeClaims may affect status of entire policy, including coverage for your homeNo increase to your Jewelers Mutual policy premium
DeductibleSame as overall policyFlexibleFlexible

*Subject to liability limits

**Depends on policy

Data from Jewelers Mutual

3 options for getting extra jewelry insurance coverage 

  1. Request an increase on your liability limit for homeowners or renters insurance

You can ask your homeowners insurance to increase your liability limit, but note that “the amounts are still limited for both individual pieces and overall losses,” according to the Insurance Information Institute. 

  1. Purchase a floater or add-on rider under your homeowners or renters insurance

You can purchase a floater or add-on rider for special jewelry on your homeowners or renters insurance policy. The Insurance Information Institute notes that although this is more expensive, it offers the broadest coverage. Your jewelry must be appraised before purchasing a floater. If you make a claim under your floater for your jewelry, it may impact your rates for your homeowners and renters insurance. 

  1. Purchase standalone jewelry insurance

Howard told Insider that unlike a homeowners policy, “a standalone jewelry policy is a comprehensive, all perils policy, meaning it covers every type of loss unless specifically excluded.”

With standalone jewelry insurance, your jewelry must be appraised. However, insurance company Chubb, which offers standalone jewelry coverage, doesn’t require appraisals for jewelry valued under $100,000 — so in some cases you may be able to get around this.

Howard noted that the premium for personal jewelry insurance is typically 1-2% of the item value. The premium will also be based on where you live, who’s wearing the jewelry, and the deductible.

Ronda Lee is an associate editor for insurance at Personal Finance Insider covering life, auto, homeowners, and renters insurance for consumers. She is also a licensed attorney who practiced litigation and insurance defense.

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