Insuring jewelry doesn’t have to be an expensive business
By Danny Newman – Beit Shemesh Branch Manager, Goldfus Insurance
Covering jewelry for insurance purposes is not always so simple. There are different options available yet the initial stage of putting a value on the items is often the most challenging. For example, how does one go about valuing a family heirloom?
Most insurance companies in Israel will not cover jewelry as a stand alone policy. Those that do will charge a higher premium for the pleasure. A more economical way to arrange cover for jewelry is to include the items as part of a more comprehensive home contents insurance policy, as the rate charged for jewelry can be significantly lower than a stand alone policy. Some companies may require a safe to be installed, depending on the overall value of jewelry that is to be insured on a regular basis.
How do I decide what to insure?
In order to determine what is worth insuring, it may be best to consider “3 types” of jewelry.
1. Everyday pieces – These are items that a person wears on a daily basis (e.g. a watch or engagement ring) or items that one would want to have cover for, should they be lost, stolen or damaged.
2. Inherited pieces – These items are often categorised as family heirlooms which are not replaceable should they be lost, stolen or damaged. Since these items have mainly sentimental value and may not be replaced, it is worth considering whether or not to insure these items at all.
3. Significant pieces – These are items that one may have purchased or inherited that have significant financial value that have been can be evaluated and compensated for their true worth if lost, stolen or damaged.
How to insure each item?
Since there are different ways one can relate to jewelry items, it may be worth insuring them accordingly.
1. The insurance companies generally require an appraisal report, which can be arranged free of charge at the homeowner’s residence. The appraisal report will include the specific items of jewelry shown to the appraiser. There is the option of removing certain items from cover should you wish. Alternatively, should the owner have a cheaper means to replace the lost, stolen or damaged item, for example, through a friend or family member in the diamond industry, one may choose to insure the item for an amount lower than the appraised value.This is an effective way of lowering the premiums, as the higher the sum insured, the higher the premiums. Unlike regular contents where the sum insured is based on replacement value, jewelry can be insured on an agreed value basis, without impacting under-insurance clauses in the policy.
2. The appraised value is based on the retail cost of replacing the item in Israel, irrespective of what it may have cost in the country of origin. Should there be a discrepancy between the appraised value and the owner’s valuation, then the insurance agent should become involved in order to reach an agreement between the two sides.
3. Certain jewelry items may not be worn on a daily basis; therefore the risk of an insurable event outside of the home may not be significant. It is possible to select specific items to be insured for “All Risk” cover, extending cover for outside of the home, with other items being covered just within the home. Limiting the number of pieces of jewelry to be covered on an “All Risk” basis may lead to a reduction in premium.If one travels abroad, it may be worth considering “Worldwide” cover. Whilst it may add premium, it is a far more comprehensive cover than the jewelry cover offered through a travel insurance policy. If one travels abroad on a frequent basis, it may be more economical to extend the “Worldwide” cover to an annual basis, as opposed to trip by trip. It is important to advise your insurance agent of the frequency of your travelling abroad, so that a proper assessment can be made as to the most appropriate level of cover.
4. Another way to decrease the cost of jewelry cover is to increase the deductible / excess per claim. In general, the higher the deductible / excess, the lower the premium is likely to be. That being said, if the deductible / excess is higher than the value of certain jewelry items, it may be worth removing them from the policy all together and thus reduce the premium even further.
Determining how to insure jewelry is not an easy decision and should not be made lightly. With many factors involved, it is important to consider the various options to see how the premiums may vary accordingly. Expensive cover does not always mean it is the most appropriate cover, so investigate your options with an insurance professional to find out how to achieve peace of mind and ensure correct coverage for valuable items.
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