Engagement Ring Insurance
Before most people say, "I do" or ask "will you?" someone usually has to say "I'll take that one." So in a way, buying an engagement ring is really the first step in a life-long commitment. It makes sense to want to insure the symbol of your love, in order to guarantee that it will be around for a long time. But is engagement ring insurance really necessary or is it just a way for insurance companies to make a profit in the wedding industry? The truth about this coverage may surprise you.
What is Engagement Ring Insurance?
You might be surprised to find out that engagement ring insurance isn't just for celebrities and other wealthy individuals. The truth is, expensive rings aren't the only ones that need insurance. There is no minimum amount required to insure a ring so don't let that deter you from getting coverage. In reality, any ring with a significant amount of value-- sentimental or monetary-- should be insured to guarantee it could be replaced if it's ever lost, stolen, or destroyed.
It may seem silly to insure an engagement ring if it's an old family heirloom and isn't worth much money. However, if something ever happened to the ring, because it isn't new, it would be especially hard to find a similar replacement. Since some engagement ring insurance policies offer coverage for a ring to be re-created, this is one instance where coverage is exceptionally important.
So when should you get coverage? Waiting until after your wedding day to get the engagement ring and wedding bands insured is a bad idea. If you aren't able to get them insured immediately after purchase, you should try to get coverage as soon as possible since they could potentially get lost or damaged before the big day. Unfortunately, many people make the mistake of assuming that their engagement ring and wedding bands will automatically be covered under their homeowner or renter's insurance policy. It isn't until it's too late that they find out they were wrong.
Although virtually any piece of jewelry can be covered under an existing policy with personal property coverage, there could be some limitations. You may need to fine artwork. Before you assume you have enough coverage on hand, check your policy to see what your coverage limit is for jewelry, since it might not be enough. Since the average cost of an engagement ring is over $5,500 and a standard homeowner's policy rarely pays more than $2,000 for unscheduled jewelry, chances are you don't have enough coverage already included on your policy.
Adding an engagement ring or wedding band to your home or renter's policy as scheduled personal property is fairly simple. First, you'll need an appraisal of the item or items to be insured. If you received one of these when the ring was purchased, you're already a step ahead. Take this appraisal to your insurance agent so they can add the information to your policy. Your agent will also need a description of the ring if it isn't already included on the appraisal, and he or she may ask for pictures and a receipt. This isn't to accuse you of not having such a ring, but rather to provide as much documentation of ownership as possible. Additionally, pictures can help you get an adequate replacement ring if the original is ever lost, stolen, or damaged.
The good news when it comes to adding an engagement ring to your homeowner or renter's policy is that the cost is usually minimal. Some policyholders have seen additional fees as low as one percent of the ring's appraised value. Because the scheduled personal property rider is so inexpensive, this is a very popular route for insuring bridal jewelry. However, there is one major drawback to covering an engagement ring or wedding band under a homeowner or renter's policy: excluded risks. Your homeowner's policy may not cover replacing the ring if it's lost. This is why some people choose to get insurance through a jeweler, instead.
Getting Insured Through a Jeweler
Many jewelers will offer to sell you an insurance policy when you purchase a ring over a certain value. Be sure to ask a lot of questions if you're offered this coverage since it may be called an extended service plan, lifetime jewelry protection plan, or something similar. Although some jewelers will cover accidental loss under their insurance policies, others will not, so it's important to ask before you buy. Additionally, some policies will only cover damage to the ring or lost pieces, so take note.
If you want to insure an engagement ring that isn't new or was a family heirloom, you may still be able to get coverage from a jeweler or jewelry insurance company. Similarly to the scheduled personal property route, you will also need an appraisal before you can have the ring insured. However, since a jeweler is insuring the item, this usually requires less legwork. Don't be discouraged if the appraisal on your heirloom engagement ring is less than you expected. You can always get a second opinion if you feel the initial appraisal is wrong.
The disadvantages of buying engagement ring insurance through a jeweler are quite different from the issues with purchasing coverage through a property policy. With scheduled personal property coverage on your homeowner's policy, you don't have a separate bill for your engagement ring; the additional premium is rolled into your monthly or annual bill. Because of this, there's no risk in forgetting to pay it.
If you pay in full for the first year of insurance on your jeweler's policy, it may be easy to forget in the future. Of course, if you forget to pay on the policy, it will cancel and you won't have coverage so this could potentially cause big problems. Another major disadvantage of buying insurance through a jeweler is the price. It isn't unusual for a jeweler's policy to cost more than a scheduled personal property endorsement on a homeowner's policy. However, the reason for this is that the jeweler's policy typically covers more types of loss, so only you can determine which type of policy is best for you.
What to Look For When Insuring an Engagement Ring
For many people, the most significant aspect of an insurance policy is the coverage limits. Will this policy give you enough coverage to replace the ring if something happens to it? Before buying a jeweler's insurance policy or adding a scheduled personal property rider to your homeowner's policy, find out how the engagement ring will be covered. Is it only insured for the appraisal value on file? If so, it's important to keep an updated appraisal. Or, will you receive a check for actual cash value or replacement cost if the time comes to file a claim? These figures may not be the same, so be sure to talk to your agent or jeweler to find out which one you would receive.
Next, check to see what types of loss the ring will be insured against. The majority of homeowner's insurance policies don't cover flood or earthquakes, so you can immediately cross these off your list of covered losses. Generally, the biggest question is, "will my policy cover the ring if it's lost accidentally?" Many homeowner's policies won't provide coverage for accidental loss, so if this is your primary concern, it could be a good idea to get coverage elsewhere.
Then, ask about deductibles. Does the policy from your jeweler feature a deductible, and if so, are there different levels to choose from? When insuring the engagement ring on your homeowner's policy, find out if your policy deductible would apply to your scheduled personal property rider. Although most policies won't require this, it's always a good idea to have this information up front so you can be prepared if you need to pay a portion of the cost to replace the ring in the future.
Another thing to consider is if and how your policy will cover a ring that was a custom design. This can be a tricky subject since the cost to recreate a custom design may be higher than the replacement cost or appraised value. If you're certain that you would want a duplicate ring in the future, and not just a substitute of equal value, discuss this with your agent or jeweler.
Finally, find out if it's possible to insure the ring for an amount that is different from the purchase price or appraisal value. Especially in an instance like the custom ring previously mentioned, it can sometimes be necessary to cover an engagement ring for more than it is currently worth. This isn't always possible, so if you have a unique situation, be prepared to do some shopping until you find the best policy suited for you.
How to Get an Appraisal for Your Ring
Be aware that your insurance agent can't appraise your ring for you, even if you provide receipts showing the purchase price. In order to get an appraisal, you'll need to take the ring to a jeweler or certified gemologist. There may be a small fee for the documentation, so keep that in mind when you make your appointment. Whether you receive your appraisal from a jeweler or gemologist, you will need to take the ring with you. An appraisal cannot be performed based off of your paperwork from when you purchased the ring.
After receiving the appraisal, you'll want to make some kind of reminder to have a re-appraisal done in a couple of years. If possible, ask your jeweler if they can send you a reminder via mail or email when the time comes. Although it isn't necessary to take the ring to the same location for re-appraisal, it's usually a good idea to use the same appraiser for subsequent evaluations since they will probably still have your paperwork for the last time. Be sure to keep your insurance policy updated with each updated appraisal to ensure that you always have the correct amount of coverage on your ring.
Regardless of whether your engagement ring is big, expensive, and new, or small, old, and well loved, it's a good idea to get insurance coverage. Just as you will soon promise to love your significant other for the rest of your lives, you should make a commitment to the ring that signifies your future together as a couple. You never know what the future may hold, so take care to protect your engagement ring, as well.