Chocolates or wine are meant to disappear on Valentine’s Day, but fancy jewelry is a different story altogether.
If expensive items are stolen or damaged, the loss could hit the wallet more than the heart.
That’s why the Insurance Information Institute recommends those exchanging expensive presents to make sure they’ll be included on their insurance in case something happens.
Valentine’s Day remains one of the biggest gift-giving holidays in the U.S. The National Retail Federation estimates that related sales of jewelry and watches will increase 7 percent this year, to an estimated $4.4 billion.
“The word ‘insurance’ is likely not going to be on many lovers lips this Valentine’s Day, but if an expensive gift of jewelry is lost or stolen it can certainly make a bad situation a little better,” Jeanne Salvatore, senior vice president and consumer spokesperson for the I.I.I., said in a statement. “While there is no way to insure the sentimental value of jewelry, at least having the right coverage will provide financial protection in the event it is lost or stolen.”
Most standard homeowners and renters insurance policies include coverage for personal items such as jewelry; however, many policies limit the dollar amount for the theft of personal possessions such as jewelry to $1,000 to $2,000.
Someone would be covered if the item were destroyed by disasters listed in the policy such as a fire or hurricane, but if an expensive new present is lost or stolen it would have to be covered under a separate policy.
To properly insure jewelry, consider purchasing additional coverage through a floater or an endorsement. In most cases, these policy add-ons would also provide coverage for a “mysterious disappearance.”
If a ring falls off a finger and is flushed down a drain, or is lost, the owner would be financially protected. Floaters and endorsements carry no deductibles and frequently provide the option of having the insurance company replace the item.
Floaters and endorsements are available as additions to homeowners and renters insurance policies. Some companies also offer a stand-alone policy to cover jewelry without having to purchase a full homeowners or renters insurance policy.
“Of course, if you do not have insurance on your home or apartment, now would be a great time to consider it,” Salvatore said. “A 2012 Insurance Information Institute poll conducted by ORC International found that 96 percent of homeowners had homeowners insurance but only 31 percent of renters had renters insurance.”
It is worth noting that jewelry-related losses were the most frequently claimed item, according to research by Enservio, an inventory service firm.
“In many of my conversations with consumers, the purchase of an engagement ring triggers interest in getting a renters insurance for the first time as many (especially young) people start to think more seriously about financially protecting themselves with insurance,” Salvatore said.
To make sure jewelry is adequately protected, the I.I.I. suggests the following four steps:
Contact an insurance professional immediately. Let the insurance agent know that about the acquisition of an expensive piece of jewelry. Find out how much coverage you have and whether additional insurance is needed.
Get a copy of the store receipt. Forward a copy of the receipt so the insurance company knows the current retail value of the item. Keep a copy for your records and include it with a home inventory.
If it’s an heirloom piece, have the item appraised. Heirlooms and antique jewelry will need to be appraised for their dollar value. Ask the insurer for recommendations regarding a reputable appraiser. If the jewelry was purchased on sale, also get the piece appraised as the item should be insured for its current retail value.
Add the item to a home inventory. The I.I.I. recommends that everyone should have an up-to-date inventory of their personal possessions. An inventory can help in buying the right amount of insurance and speed up the claims process when there is a loss. To make creating an inventory as easy as possible, use the I.I.I.’s free Web-based home inventory software, Know Your Stuff® – Home Inventory. People can add a digital photograph of a new gift and save scanned receipts and the software includes secure online storage so they can access their inventory anywhere, anytime. There’s also a Know Your Stuff app in the iTunes App Store or from Google Play (search for “iii inventory”).
