Do You Have Enough Home Insurance for Your Fine Jewelry?

When people think about home insurance, they think about the coverage for home damages. They think about having the financial means to recover from a fire. 

However, home insurance isn’t simply to coverage for damage to your home. The policy can cover much more.

A component of home insurance can cover your jewelry. It covers the expensive diamonds and other precious stones you get for Valentine’s Day. However, there’s usually a limit to the amount of jewelry your home insurance will cover. 

In America, a break-in happens once every 15 seconds, on average. There is always a chance that it could happen to you. Ensuring that you have enough insurance coverage for your jewelry is important.

How Much Coverage Do You Have for Your Jewelry?

The insurance coverage for your jewelry varies based on your insurance policy. If you enjoy jewelry and you have a lot of it, then it’s possible you don’t have enough coverage. 

To be sure, you should talk to your home insurance agent. Find out what your home insurance coverage limits are. Also find out what method the insurance company uses to reimburse you.

Replacement Cost Vs. Actual Value

Home insurance providers usually use one of two methods to determine jewelry's value when someone files a claim. They usually use the replacement cost or actual value method. 

If your insurance company uses the replacement cost method, then they’ll reimburse you the cost of purchasing your jewelry today. They will give you the full price of a new item in a store.

However, if they use the actual value method, then they will base their reimbursement of their appraisal of the jewelry. The value of some jewelry depreciates over time. The actual cash value is the item's worth at the time of the burglary, not its new value. 

The replacement cost method is usually a better option. It allows you flexibility in purchasing similar replacement items. But, it can be more expensive.

What Should You Do If You Don’t Have Enough Coverage?

If you don’t have enough coverage for your jewelry, you can add more home insurance coverage. You can usually do this using a rider. A rider is an addendum to your existing insurance contract.

You may also have the option to insure the jewelry on a separate, individual jewelry policy.

How Much Insurance Is Enough?

When it comes to getting the right amount of coverage, the first place to start is with a jewelry appraiser. They can appraise your jewelry to determine how much it’s worth. The appraisal will give you a good idea of how much additional insurance coverage you need. The can also give you documentation to prove this value.

One of the most stolen items is jewelry. You’ll want enough insurance just in case the unthinkable happens to you. Talk to your insurance agent first to understand how your coverage works.