The moment you give or receive an engagement ring is life changing. It’s a moment of thrill and passion like no other (as long as he/she says yes right?).
The last thing on your mind at that very moment is engagement ring insurance. That’s why created this guide, to help inform you of everything you could possibly need or want to know about properly insuring your engagement ring.
The Ultimate Guide to Engagement Ring Insurance
Engagement ring insurance is most often added to home insurance policy through endorsement. However, specific coverage for engagement rings may be purchased as a separate policy if you so choose. Such coverage is typically provided on a policy known as a inland marine insurance policy which has coverage similar to a special form policy.
In other words, protection is provided against all sources that cause direct damage or loss unless the source is specifically excluded by the policy.
Eligible Engagement Rings - Engagement rings considered jewelry and thus eligible for coverage include items that are composed in whole or part of silver, gold, platinum or other precious metals and alloys, whether or not containing pearls, jewels, precious or semi-precious stones.
Engagement Ring Insurance Coverage
Engagement ring insurance can be provided in any of the following methods:
- a separate personal floater (inland marine policy);
- as part of the Personal Articles Floater that contains other scheduled items, or
- as an endorsement to your homeowners insurance policy
Most homeowners insurance policies will come with a base amount of coverage for jewelry, furs and collectibles.
Your Engagement ring insurance provides protection while located anywhere in the world.
Exclusions and Limitations
Engagement ring insurance does not insure against loss or damage caused by:
- wear and tear
- gradual deterioration
- inherent vice (which means something within the nature of the property that causes it to deteriorate)
Important Conditions to Remember
With respect only to engagement rings, wedding rings, and guard rings, insurance policies may be issued in the name of the two parties having an insurable interest in the property. This means that with every other piece of scheduled jewelry the policy must be written in the owners of that jewelry’s name. But with engagement ring insurance the policy can be written in the name of both the owner (the woman wearing the ring) and the guy who actually paid for the engagement ring.
In case of a loss, settlement and payment would be made based upon each parties shared interest in the lost or damaged engagement ring.
Example of Engagement Ring Insurance Loss
Sally is on her way home from work when she’s mugged. Besides her purse and necklace, the robber also takes her diamond engagement ring. The engagement ring contained white gold on the band as well. Steve, her fiancé, had engagement ring insurance with an appraised value of $8,500. Both Steve and Sally were listed on the engagement ring insurance policy as named insureds.
Scenario 1 – Steve’s insurance company pays Sally $4,000 and Steve is paid $4,500, the amount he still owed on payments.
Scenario 2 – Steve’s insurance company pays Sally $8,500 and Steve is paid nothing since, at the time of the loss, the ring had been paid for in full.
Newly Acquired Jewelry
Engagement ring insurance covers newly acquired property as long as its the same class of property that is previously covered on the policy at the time the new property is acquired and reported to the company within 30 days after its acquisition. You will also have to pay an additional premium for the increase in coverage.
The amount of protection for newly acquired jewelry (with most carriers, every carrier is specific and unique) is limited to 25% of the amount of jewelry insurance (for that class of property) or $10,000, whichever is less.
IMPORTANT: This is a limited safeguard, it is extremely important that report any newly acquired jewelry to your independent insurance agent and pay the additional premium assiated with the new property as soon as possible.
What To Do In the Event of a Loss
If you have a loss of an engagement ring you must report, as soon as realistically possible, every loss or damage that have the potential to become a claim. All claims must be filed with your insurance company within 90 days from the date of loss and provide a sworn proof of loss that details the circumstances surrounding the loss. If you fail to do notify the insurance company it may invalidate your claim under the engagement ring insurance policy.
Payment on a Loss
After you report a loss or damage on your engagement ring policy you will contacted by an insurance adjuster to discuss what happened. After that analysis the adjusted claims must be paid or made good to you the insured within 30 days of the file being closed and sufficient proof of loss is filed and accepted by the insurance company.
Taking Action if Unhappy with Claim Payment
Any action made against your engagement ring insurance carrier must be initiated within within 12 months of the date you discovered the occurrence that created the claim. However, there are laws in certain states where the policy is issued invalidates this limitation, then any such actions are void unless such action, suit or proceeding is initiated within the shortest limit of time permitted by that state’s laws. It’s important that any issue of this nature is handled as soon as possible and addressed according to the laws of the state with jurisdiction.
Most problems with engagement ring insurance claim payments has to do with attempting to properly establish the value of the engagement ring for insurance purposes.
This is why its vital that when coverage is first written, you provide the insurance company with a sales receipt or an appraisal of the engagement ring that documents its current value. The appraisal is preferable.
The appraisal provides a baseline value for the engagement ring insurance.
Engagement Ring Insurance Rate and Premium
Engagement ring insurance rates that are used by many different insurance companies are established on a territorial basis, (which can be broken down by region, state, county, zip, even town) according to loss experience in each area. Every insurance company has their own unique rates for engagement ring insurance based on their appetite for the business. Rates are reviewed periodically and are subject to change.
By way of comparison, jewelry insurance rates, including engagement ring insurance rates are usually at least three times more than the rates applicable to something like furs in the same area. This reflects the fact that jewelry is a more popular class of expensive property and is more vulnerable to loss (because of its size-to-value ratio).
Engagement Rings in Vaults
Engagement rings that are kept in a vault of a specified bank or non-bank security facility may be covered by endorsement for an additional premium. If any item is removed from the vault, the policy ceases to cover that item unless the insured notifies the insurance company in advance. Typically, the short rate of the regular jewelry rate is paid during the period of time the jewelry is outside of the bank.
Engagement Ring Insurance Renewals
During inflationary periods precious metals and diamond values may rise and the amount of insurance coverage on your engagement ring insurance policy should be adjusted in accordance with the increased value.
The new value of insurance should be set by an appraisal from a competent jeweler with the requisite expertise to appraise jewelry that increased or decreased in value. When jewelry prices decrease, the opposite conditions prevail. If valuable jewelry has not been appraised recently for insurance purposes, it is suggested this be done and insurance revised accordingly.
Our recommendation is that you have your engagement ring and all other jewelry appraised every three years to ensure that you always have the proper amount of coverage.
Engagement Ring Agreed Value
When you receive and submit an appraisal of your engagement ring, insurance coverage is commonly offered on an agreed value basis. The maximum settlement for a loss is according to the limit of insurance that appears on the schedule (either the homeowners policy if an endorsement or the separate inland marine policy) and it is not subject to a deductible or depreciation.
5 Reasons for Scheduling Your Engagement Ring
There are many compelling reasons why you should purchasing engagement ring insurance to cover this valuable piece of jewelry. Consider the following issues:
1. Your homeowners insurance policy often does not provide enough coverage for such a valuable item as an engagement ring on the base policy.
2. Your actual coverage available under a typical homeowners insurance policy is extremely limited, usually no more than one or two thousand dollars.
3. Scheduled engagement ring coverage usually provides a much more comprehensive coverage basis than the protection provided for regular personal property on a homeowners insurance policy.
4. On a base home insurance policy there is limited coverage for newly acquired jewelry, including engagement rings.
5. When you schedule your engagement ring insurance coverage increases to the amount of protection on your appraisal at agreed value.
Buy Engagement Ring Insurance
If after reading this guide you are in need of engagement ring insurance and would like to receive a quote for coverage please call us at (518) 456-6688 or click here to begin by email.
Ryan Hanle, CIC