While most people count on the scope of their renters or homeowners insurance policy to cover their precious assets, they may find that coverage insufficient in the face of a potential loss. In most cases, the value of a single broad policy is outweighed by that of specialized jewelry insurance policies.
Contrary to popular belief, residential insurance policies often offer only fractional coverage for many of your home’s most valuable items. Anyone looking to best insure their precious possessions should consider these five common misconceptions surrounding home and renters insurance versus specialized jewelry insurance.
Misconception 1: Claiming a Jewelry Loss Doesn’t Affect Your Homeowners Insurance
Among the most common misapprehensions around homeowners insurance is the perception that a claim for lost jewelry won’t impact the cost or viability of their home or renter’s policy.
The truth is, there are an array of property-related claims that may negatively impact your coverage rate. Including theft, personal liability or water damage. Common claims such as this can result in policy increases of 7-10% or more in homeowners or renters insurance.
Overall, seeking an appraisal of precious assets ensures your policy’s price fully reflects the value of those items for replacement against any threat of lostt.
Misconception 2: Homeowners Insurance Covers the Full Value of Your Jewelry
The risk of policy costs rising is only part of the issue with relying on residential insurance to cover your precious assets, since homeowners and renters insurance also only provides capped coverage for individual items.
Many insurance policies carry a per-item cap of $2,000 or less, while most only guarantee coverage of 50% per instance of loss up to only $5,000.
Misconception 3: Your Carrier Will Allow You to Choose Your Jeweler If You File a Claim
In addition to the lack of coverage, residential insurance policies generally limit the ability of policyholders to seek repairs or replacements from their preferred jewelers and suppliers. Like health or dental, insurance firms generally prefer establishing a network of preferred affiliates with which work, lowering costs but limiting choices for policyholders.
While it may not matter which roofing or plumbing company you may need for home repairs, repairing or replacing jewelry is often a very particular and intimate task. Purchasing a specialized jewelry insurance policy generally guarantees you will be able to work with your preferred jeweler in fixing or replacing a damaged or stolen item.
Misconception 4: Residential Insurance Remains Up-to-date On the Value of Your Insured Jewelry
Perhaps the most critical aspect of jewelry insurance in this time of ascending asset prices is attaining a policy value that reflects the ever-rising value of precious metals and gemstones. Given the broad scope of homeowners and renters insurance, coverage for precious items containing gold, silver or diamonds are generally based on one-time estimates and don’t take into account the spot market value of each items’ constituent materials.
Misconception 5: A Homeowners Policy Protects Your Jewelry from All Instances of Loss
Finally, and perhaps most critically, are the many lacunas in jewelry coverage that come with residential insurance policies. Even the partial coverage these plans provide for, damage often does not account for the wide variety of claims a policyholder may make, including some of the most common claim types, like water damage or unexplained loss either at home or during travel.
Unlike homeowners or renters insurance, specialized jewelry insurance provides much more comprehensive coverage.
Appraising Your Coverage
As the value of hard assets continues to serve as a significant store of wealth, investors with precious assets from necklaces and watches to coins and other valuables should evaluate whether their possessions are fully appreciated. It may surprise how much these items are worth in the current market, and how little they are accounted for under the umbrella of their current insurance policy.
Talk to your insurance agent to learn more about specialized jewelry insurance to protect your valuables.
Article by: Chris Dier-Scalise