Your basic home insurance policy will typically replace a piece of jewelry for its full value if it’s destroyed in a fire (assuming you can prove its existence and replacement value). If it’s stolen, however, there are strict limits what your insurance company will pay for the loss -- usually $1,000 per piece and $5,000 total for all jewelry – maybe less. Say you have 50 pieces of miscellaneous jewelry you’ve acquired over the years, worth $15,000, and it’s all stolen. In this instance, the most you’ll likely get from insurance for everything is $5,000 or even less, on some policies - minus any deductible, of course. What’s more, your regular homeowners policy likely won’t pay you if you just happen to lose that article, and don’t know where it is (called “mysterious disappearance”).
Your best defense is, at minimum, having a recent appraisal of your more valuable jewelry, so you can easily prove its existence and value to an insurance adjustor.
In addition, if you also wish to insure your jewelry for “mysterious disappearance” and for its full, replacement value, you ought to consider adding a jewelry “Floater” to your policy, also known as a “Scheduled Personal Articles Endorsement”. That way, you’re sure to receive full value for your piece, regardless of how it was destroyed or how it disappeared.
Okay, you say, I have the original appraisal for my wife’s engagement ring when I bought it in 1980. Isn’t this good enough? Well, no. Many insurance companies wouldn’t blindly accept an appraisal this ancient, but even if they did, the value of the ring has likely jumped far higher than you realize. Just think about the price of gold these days, selling at record levels. You don’t want to be underinsured.
You don’t want to be overinsured, either. According to Susan Schwartz, a highly respected independent Graduate Gemologist in Franklin TN, says jewelry values in general, are sometimes quite fluid, with wide swings from year to year. She suggests that jewelry owners periodically ask their appraiser to “update and reissue” their previous appraisal to reflect the current cost to replace the piece. This can be done at a very modest cost, and will help protect you from market fluctuations.
Given that most jewelry is of sentimental and emotional value, not having a good idea of its value in the time of a loss is something neither you, nor your insurance company, wants to face. Don’t be caught off guard if something happens to your engagement ring or expensive watch. Prepare yourself for this possibility with a proper appraisal and by adding a jewelry floater to your homeowners policy.