Whether you’re giving a gift for an anniversary, a graduation, or a special birthday or even popping the question, there are some gifts that sparkle more than others. While it’s always the thought that counts, when it comes to more expensive thoughts, there are other things to think about as well-such as insurance.
Although it’s hard to put a price on sentimental items, valuables such as diamond rings need to be properly insured against loss or theft. Each year, according to the U.S. Department of Justice, consumers spend $50 billion on jewelry, of which $1 billion is lost, stolen, or otherwise disappears. Perhaps surprisingly, your existing insurance probably doesn’t provide enough coverage for higher-valued items. In fact, the vast majority of these items are underinsured, which means they can’t be adequately replaced.
“Many homeowner’s or renter’s insurance policies provide only a basic level of personal property coverage – often in the $1,000 to $1,500 range – for items such as jewelry and furs,” says Mario Morales, corporate underwriting manager at MetLife Auto & Home. “That’s why people with higher-valued items should make certain that those valuables are appropriately protected.”
For a greater level of coverage, insurance companies offer Scheduled Personal Property (SPP), an endorsement that provides 100 percent of the “stated value” of valuable items for a small additional premium – often with no deductible. Most companies stipulate that reimbursement for a loss will not exceed the actual cash value of the item, or the cost to replace the item, as outlined in the policy. Some, however, offer extra peace of mind, by providing coverage on an “agreed value” basis. This means that, regardless of the actual cost to repair or replace the valuable, the company agrees to pay, in the event of a loss, an amount that has been agreed upon in advance.
Whether an item of jewelry is a recent gift, or a family heirloom, owners can ensure that it’s appropriately protected by taking the following steps:
1. Create an inventory of all your personal possessions. MetLife Auto & Home offers free personal property inventory brochures, in both English and Spanish, which are available online at www.metlife.com or by calling (800) MET-LIFE (800-638-5433).
2. Have your items appraised. Locate a professional appraiser and get a detailed description and value of the item – in writing. “Refresh” appraisals every two or three years. Markets, such as those for diamond and silver, tend to fluctuate. Have items reappraised, especially those with individual values of more than $2,500.
3. Talk to your insurance agent, and have him or her compare this appraisal against your jewelry coverage limits, to determine whether you should secure Scheduled Personal Property coverage.
4. Finally, store the appraisal in a safe place with other valuable papers. Even if the value increases over time, it’s helpful to have the description in writing.