Price, Coverage, and Other Considerations When Insuring Your Diamond
Planning for the possibility of a lost or stolen engagement ring isn’t exactly romantic, but it’s practical. Here’s what you should know about insuring your diamond ring.
Do you need insurance for your engagement ring? People routinely insure other investments and expensive purchases, such as cars and homes, but they might not consider insuring that expensive diamond that gets worn every single day and exposed to the elements. If you’re considering an insurance plan for your ring, here are some considerations to keep in mind.
Why Engagement Ring Insurance?
Expensive jewelry often is not covered by existing homeowner or renter’s insurance policies. Many of these policies will only pay up to a set amount for jewelry theft. This amount varies with the policy, but it’s commonly in the neighborhood of $500-$2500 (if you live in the U.S.), which certainly does not cover the cost of most engagement rings. Furthermore, these policies typically cover only theft, so if you lose or damage the ring, you may not be covered at all. In order to insure your ring, you will probably have to pay an additional premium on your existing policy, or perhaps will want to get a new policy specifically for your ring.
Cost of Engagement Ring Insurance
The price of engagement ring insurance varies based on the appraisal value of the ring, your geographical location, and the company. Obviously, more expensive rings will be more expensive to insure. If you live in a high crime area, it may also be more expensive to insure your ring.
With those factors in mind, shop around carefully, as some companies charge quite a bit more than others. Typically, the price of insurance is somewhere between 1.25% – 1.75% of the appraised value of the ring per year. Therefore, if your ring is appraised at $10,000, you’ll pay between $125 and $175 a year to insure the ring. Of course, this is an added expense to keep in mind when you are considering whether or not to purchase an expensive engagement ring, as you’ll be paying quite a bit to insure your ring over the years to come.
Engagement Ring Insurance Coverage
When purchasing an insurance policy, find out what’s covered and what is not. At minimum, your policy should cover theft, loss of the ring, and damage to the ring. You’ll want to find out if there are any circumstances under which the ring is not covered by insurance. (It’s common for insurance companies to refuse to insure a ring lost or damaged due to “acts of war,” but other than that, if you shop around you should be able to cover most situations.) You’ll also want to find out if the policy covers ring repair. In addition, find out exactly what will happen if your ring needs to be replaced. Will you receive a cash payment, and if so, how much?
Nobody likes to think about losing or damaging something as sentimental as a diamond engagement ring. However, the ring is an expensive purchase as well as an emotional one, so consider the possibility of engagement ring insurance.