A light-fingered whippersnapper. The back of a couch cushion. Down a drain. All places that your engagement ring could end up.
But you’ve spent time researching the ring and considerable amounts of cash buying it, so how do you make sure that you’re protected?
I’ll keep this short, but here’s the inside info you need to know about making sure your engagement ring is covered by insurance.
Choosing a policy
Finding insurance that works for you will depend on a number of things–whether you have household insurance, what your credit history is like and what budget you have left after shelling out for the ring. Below are a few questions to consider when choosing your policy.
- Would the ring be covered if lost or only if it’s stolen?
- How would it be replaced? With a cheque or through a jeweler specified by the insurer?
- If it’s custom or vintage, how would you make sure the quality is matched?
- Is it insured for the full cost or a fraction?
- What is the excess?
- What proof would you need to make a claim?
- Are there any circumstances that aren’t covered?
- Does the policy take into account what happens if your ring increases in value?
Here are the kind of policies that are there out there.
Not technically insurance, but your jeweller or ring manufacturer should offer a warranty against defects on their products and their work. Details may change so it’s important to check what’s covered. If a part falls off due to a manufacturing defect, they should repair or replace it free of charge. But be aware that although they will reattach a diamond to a ring if it has fallen off, it’s unlikely the warranty will cover the replacement of the rock itself if a centre stone falls off and is lost.
Homeowner’s or renter’s insurance usually has an allowance for jewellery, but is subject to two caps:
- The percentage of the policy that can cover jewellery
- A value limit for an individual item
If your policy covers contents for $100,000, it may only cover to $10,000 worth of jewelry, with no single item allowed over $1,000. These limits are set when you purchase the insurance, along with the excess and other details. Standard limits are unlikely to cover the value of an engagement ring, so you’ll need to get an add-on to rely on your home insurance. Submit your purchase receipt and value certification and the insurance company will adjust your policy.
If you don’t have a home policy, you can insure just the ring with an individual policy. Your jeweler can make recommendations or it’s not hard to find a provider online. One thing to watch out for how policies can vary wildly between companies, so be sure to read the fine print.
Types of replacement
Insurance policies fall into three main types:
- Defined value
- Actual value
Replacement policies are the most common. The insurance company will replace or repair the ring using a supplier of their choice, based on the appraisal you submitted. If you list a platinum band two carat marquise diamond, they will replace it like-for-like, which means you will benefit if the price of the ring has gone up. A disadvantage is that you are locked into using one of the insurer’s preferred suppliers.
If you don’t like them, they may let you go elsewhere, but will only pay the price quoted by their chosen supplier. As insurance companies benefit from economies of scale, you’re unlikely to get as good a deal if you go elsewhere.
Here, you agree in advance with the company how much will be paid in case of loss. This is done through an appraisal – sales receipts won’t be accepted as evidence of value as they are not impartial. Just because you paid a certain amount, it doesn’t mean it’s worth that value. If you lose the ring, the insurers will write you a cheque for the full defined value. In the case of a partial loss, say if the stone falls out and is lost, the repair or replacement will vary between policies.
The least expensive option, an actual value policy will pay out the value of the ring less any depreciation. If you paid $5,000 and lost it 10 years after getting hitched, the pay out may only be $4,000 to allow for wear and tear.
Read the small print
Although we click through the Ts & Cs every time we download a new version of iTunes, potentially agreeing to donate our kidneys if Apple slipped that into page 32 of 64 of the contract, with insurance it pays to read the all the conditions. Your policy should cover every ring-threatening situation from theft to damage to dropping it down the sink. Take 10 minutes to make sure that you’re protecting protected for all eventualities and your future self will thank you.