June 26, 2022

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Does homeowners insurance cover jewelry?

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Jewelry is among the most expensive, valuable belongings many of us own — but because jewelry is small and easy to go unnoticed, most homeowners insurance policies only offer limited coverage in the event that it’s damaged or stolen. If you have an engagement ring, heirloom, or custom jewelry pieces, you’ll need to get special coverage beyond your homeowners policy.

Steve Wilson, senior underwriting manager at Hippo Insurance, told Business Insider that “coverage is built into homeowner policies for jewelry up to $2,500.” Wilson said that the homeowner and insurer agree to the appraised value. However, he noted that most companies will limit what they’ll pay for theft because jewelry is small and easy to transport.

When is jewelry covered by homeowners insurance?

There are several types of homeowners policies. However, they all fall within two categories: named peril policies or open peril policies.

A named peril policy covers you for specific listed events, like a fire, storm, or theft. An open peril policy covers just about anything that might happen, unless your policy specifically notes that it’s not covered.  

Insurance company Lemonade provides the following example of an open peril: If an apartment flood ruined your computer, and your policy doesn’t specifically say flooding isn’t covered, your insurance company will have to approve your claim, by default.

Jewelry would fall under named peril with a homeowners insurance policy, but under a floater policy it will include named perils and some accidents. With personal jewelry insurance, on the other hand, both named and open peril are included — meaning any event is covered.

You can ask your homeowners insurance to increase your liability limit, but “the amounts are still limited for both individual pieces and overall losses,” according to the Insurance Information Institute

A second option is purchasing a floater policy as an add-on to your homeowners insurance. The Insurance Information Institute notes that although this is more expensive, it offers the broadest coverage, including coverage your standard homeowner’s policy doesn’t include. Your jewelry must be appraised before purchasing a floater.

Another option is to purchase personal jewelry insurance. Bryan Howard, director of product management for Jewelers Mutual, told Business Insider that unlike a homeowners policy, “a standalone jewelry policy is a comprehensive, all perils policy, meaning it covers every type of loss unless specifically excluded.”

With standalone jewelry insurance, your jewelry must be appraised. Howard noted that the premium for personal jewelry insurance is typically 1-2{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of the item value. The premium will also be based on where you live, who’s wearing the jewelry, and the deductible.

Here’s a comparison of the jewelry coverage you can get with homeowners insurance, a floater policy for homeowners insurance, and a standalone jewelry insurance policy such as Jewelers Mutual.

*Subject to liability limits

**Depends on policy

Data from Jewelers Mutual

There are two major differences between a floater add-on to your policy and personal jewelry insurance. The first is that if you make a claim under your floater, it may impact your rates for your homeowners policy. That doesn’t happen with standalone personal jewelry insurance.

The second is that your homeowners insurance and floater policy may require you to use their authorized jeweler to repair or replace your item. However, standalone personal jewelry insurance works with the jeweler of your choice to replace or repair jewelry.

Howard said that some jewelers offer a warranty product against manufacturer’s defects, but this is not that same comprehensive coverage as a floater policy or personal jewelry insurance.

If you have jewelry valued above your homeowners insurance liability limits, you need to consider a floater add-on policy or separate standalone personal jewelry insurance. Additionally, if you have custom jewelry or heirloom pieces, like an engagement ring, watch, or necklace, you should get a separate policy.

Both a floater and personal jewelry insurance require an appraisal for the items to be insured. Normally, your jeweler will refer you to an appraisal company. If you do not have an appraisal, receipts for the items are acceptable.

Treat lost or damaged jewelry like a car accident. First, notify the police and file a police report. Your insurance company may request a copy of the police report. Second, take pictures of damaged jewelry and what caused the damage (fire, storm, etc).

Notify your insurance company, either your homeowners or personal jewelry insurance. Failure to timely notify your insurance provider can result in denying the claim. If you insured your jewelry through your homeowners or a floater policy, you may be required to use a jeweler of their choosing. However, if you have personal jewelry insurance, you will be allowed to have your jewelry repaired or replaced at your chosen jeweler.

Your jewelry will be covered for the appraised value minus any deductible.

Ronda Lee is an associate editor for insurance at Personal Finance Insider covering life, auto, homeowners, and renters insurance for consumers. She is also a licensed attorney who practiced litigation and insurance defense.