Is Your Jewelry Covered On Your Home Insurance?
A woman came into our agency last week, with a tell tale look of panic on her face. She had been out running errands and realized that the diamond had fallen out of her engagement ring. She had retraced her steps, searched the car, it was nowhere to be found. She came in to the agency to find out if she had any coverage on her home insurance policy. Luckily for her, she had coverage on her policy for the lost stone, though, not everyone is so lucky…
In most cases, you have coverage for valuables such as jewelry under your homeowner’s insurance policy. Depending on the terms of your specific policy, you may even be able to collect for your lost jewelry. However, without additional endorsements (specific added coverage), your policy probably limits your recovery to a modest amount, as low as $2500. You also have to apply your deductible to the loss, and the policy might limit the types of losses that are covered.
The coverage under your homeowner’s policy alone is not sufficient for expensive pieces of jewelry. Not to worry, other options do exist. For an additional premium, your home insurance policy can be endorsed to increase the amount of coverage for jewelry, eliminate the deductible and greatly expand the definition of a covered cause of loss. Usually, you have the option of insuring jewelry on an itemized or blanket basis.
Itemized coverage is exactly what it sounds like. You provide a list of items you wish to insure. Depending on the value of the item, you may also be asked to submit an appraisal showing a description and value. In the event of a loss, you identify the item, and the insurance company references the description and value when settling the claim.
Blanket coverage provides you with an overall limit of coverage for a class of property, and usually includes a per-item limit of coverage. For example, a $100,000 blanket jewelry policy provides up to $100,000 of coverage for jewelry, with no descriptions or values assigned to individual items. Typically, the policy limits the amount of coverage paid for any one item to no more than $10,000. You don’t need an appraisal on file (though we do recommend one for your own records), and in many cases, still don’t pay your deductible.
Blanket coverage is a convenient way to insure jewelry with lower values, and it does offer better protection than most homeowner’s policies alone. But it also has its drawbacks. When you file a claim on a blanket jewelry policy, the insurance company asks for proof of ownership of the item and verification of the item’s value. This can be difficult to obtain, especially if the item was inherited or received as a gift. You might find yourself looking through old photo albums to find a picture that shows you wearing that missing necklace, or calling the jewelry store to see if they kept a record of the watch you bought 10 years ago.
We have found that most of our customers make the assumption that their jewelry is automatically covered on their homeowners policy, though as you can see, this is not necessarily the case. We recommend calling your insurance agent to discuss further coverage options to make sure you are adequately covered. Don’t have one? Feel free to give us a call.