This holiday season, you might have gotten a new piece of jewelry of which you are particularly proud. You obviously don’t want anything to happen to it, and you certainly want to be able to replace it if anything happens to it. However, if you are simply planning to rely on your possessions coverage within your homeowners insurance to cover the item in question, you might be selling yourself short.
Jewelry is an expensive and high-risk commodity. After all, it’s one the first items of value that a thief might go after when they break into your home. But there are more hazards than just theft that might damage or destroy your jewelry, and regardless of the cause, the effects of the loss could be very costly nonetheless. You’ll want to have the proper insurance in place from the start, so that you’ll be ready for any eventuality.
How Homeowners Insurance Covers Jewelry
Your homeowners insurance will include possessions coverage, which will protect your personal belongings in case they are damaged in a covered peril. It commonly covers belongings damaged by fires, severe weather, burst pipes, acts of theft or vandalism, or any number of other unpreventable, unavoidable hazards.
However, when it comes to coverage for unique or high-value items, including jewelry, you might find that your coverage is more limited even within the limits of your possessions coverage.
For example, your coverage limit for your possessions insurance might be in the tens of thousands of dollars. However, there might be a sub-limit within your benefits that restricts coverage for lost jewelry to a much lower amount, such as $2,000 for all losses to jewelry.
Additionally, while you might have a $2,000 sub-limit for jewelry, your plan might only compensate you for the cash value of the piece at the time of the loss, rather than it’s like-new value. Therefore, your settlement for the lost piece might actually be much less than what the item was worth.
Insuring a Piece of Jewelry Under Homeowners Coverage
Most homeowners insurance providers make it fairly easy for clients to insure jewelry items for their true value. One of the easiest ways to do so is to schedule your piece on your policy. A scheduled item rider is an endorsement that specifically insures a piece in question for its own value, and in a way that is not subject to the same restrictions of unscheduled possessions. Therefore, if you ever make a claim for the full value of the item, then your policy will provide a much more adequate settlement.
Plus, by scheduling an item on your policy, any increase in your home insurance premium is likely to be negligible, especially considering the value of the item in question. It is much easier to pay a little bit more for your home insurance than to be out of pocket by a lot if a piece of jewelry gets stolen.