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Insuring your collection

By Justin Krall, G.G.

For most individuals, the purchase of fine jewellery is a major investment and, as such, should be insured like other valuable items (for example, your car, home, or expensive electronic equipment). However, most people who purchase homeowner's insurance assume that their jewellery is automatically covered under that policy. Although many homeowner's insurance policies include jewellery, coverage is usually limited to small amounts like US$1,000.00. This amount is also subject to your homeowner's deductible, which in most cases, is US$250.00. Therefore, US$1,000.00 worth of jewellery insurance, after a US$250.00 deductible, equals only US$750.00 in total jewellery coverage.

There are very few of us who own less than US$500.00 worth of jewellery. Most people are unaware of how much their entire jewellery collection is worth. Two wedding bands alone can exceed the US$750 jewellery coverage you may have under your homeowner's policy. So, how do you protect your fine jewellery from loss or theft? The easiest and most cost-efficient way is to add each individual item to your homeowner's policy, or add what is referred to in the insurance industry as a "separate rider." This is a very simple procedure and, in the long run, could save you thousands of dollars if a loss should occur.

The first step is to find a qualified jewellery appraiser to write an accurate appraisal, or use the appraisal that should have been included with your jewellery item when purchased. If your appraisal is more than five years old, it should be updated. Find a qualified jewellery appraiser (preferably one who has a gemological background). You may also want to check the educational background of the person who will be writing your appraisal. No state or federal government agency requires that a jewellery appraiser have any gemological training whatsoever, so be careful whom you choose.

Once you have secured an accurate and up-to-date appraisal, call your insurance agent and have your jewellery items added onto your existing homeowner's or renter's insurance policy. If your addition is a certified piece of jewellery, be sure to submit a copy of the certificate to your insurance company. There will be an additional cost or premium associated with this addition. However, for the protection, coverage, and peace of mind you are receiving, the premiums are a small price to pay for the added security. In most cases, the premium is based on the appraised value of each jewellery item. The cost averages between US$10.00 to US$15.00 per US$1,000.00 in jewellery value. For example, the insurance premium for a diamond ring appraised at US$5,000.00 will be US$50.00 if the cost is US$10.00 per US$1,000.00.

If US$50.00 seems like a lot of money, consider what you get in return. You are covered 100% without a deductible if the diamond ring is stolen anywhere in the world, if the diamond is lost in a fire, or if the diamond mysteriously disappears or is damaged. If your diamond is chipped, the insurance company will replace or repair your diamond up to the policy limits.

Keep in mind that insurance policies differ from state to state. Consult your insurance agent and carefully review your jewellery policy before you buy additional insurance.

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