Are You Covered By Your Jewelry Insurance?
Jewelry insurance comes in many forms and varieties and only an insurance agent can provide accurate and specific advice
. However, it helps to know enough about jewelry insurance to ask your agent the right questions and to be aware of how the process works. The time to ask your insurance agent the questions is before you insure an item, not when you need to file a claim. Read the fine print in your insurance contract to be sure it provides the coverage you expect.Understanding jewelry insurance begins with recognizing the difference between scheduled and unscheduled property.
Unscheduled property (jewelry not listed specifically) is often included in basic renter's or homeowners policies. This cover usually doesn't need an appraisal, but it's a good idea to keep receipts and photos to prove ownership and value.
Scheduled property (jewelry specifically listed) is included in a floater, rider or endorsement to homeowner or renter's policies. Jewelry insurance is also available with a separate policy, from a company specializing in jewelry insurance. For scheduled property, the insurance appraisal is vital because it describes the jewelry item and provides the "insured value" that is used in determining the premium you will pay to insure the item each year. Most scheduled property policies do not have an automatic appreciation adjustment as is common for the house and other unscheduled property. Therefore, even if it might cost 50% more to replace an item in five years, the "insured value" is still only that stated in the appraisal.
If you have need to file a claim on the insurance, the amount you are paid and the settlement procedure will depend on your policy and if the policy allowed agreed value settlement or alternatively, replacement.
Do you have enough jewelry insurance? The answer depends on what kind of policy you have, the "insured value" is on the appraisal, the settlement procedure is for your particular policy, and the accuracy of the information on your appraisal. If you have a jewelry item valued at more than the $1500, you should definitely consider scheduled as opposed to unscheduled coverage.
The most important issue for scheduled property insurance cover is the accuracy of information which is on the appraisal.
The information on the appraisal should not be vague or the insurance company could replace an item of jewelry with one of less value and quality. Make sure that the appraisal is detailed and accurate.
If the appraisal value is higher than it should be, you may not be covered for that amount. This could happen if you paid more at a retailer than the item sold for in other retailers. They could have given you an appraisal that was artificially high. The appraisal value does not need to be greater than 150% of the item's price at a competitively priced retailer online.
If the appraisal value is lower than it needs to be, the jewelry insurance company may give a settlement lower than the price of replacing the jewelry item. This is a possibility if the item was purchased at a low price a few years ago. Appraisals can rapidly become outdated, and they need to be updated after a few years.
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