One of our independent agents recently asked some thoughtful questions on the insurance options available for personal jewelry. Given the many options and types of coverages available, I thought this was a “valuable” blog topic!
There are two main reasons you would want to insure a personal jewelry item with an inland marine policy (if you’re curious why coverage for jewelry is called inland marine, click here!):
- The basic homeowners policy limits the amount that would be paid for jewelry in the event of a theft.
- A deductible would typically apply to a loss that’s covered by a basic homeowner’s policy. But when jewelry is covered individually on an inland marine form there is usually no deductible involved (unless that option is specifically requested).
When a jewelry item is covered with an inland marine policy, most insurance companies offer two different loss settlement options:
- optional agreed value loss settlement
- A traditional “repair/replacement cost” settlement option
For an additional premium, the agreed value option will simply pay the amount for which an item is listed on the policy. For this loss settlement option you may need to supply a recent appraisal or a bill of sale to substantiate the value for which the item is insured.
The traditional repair/replacement cost option is the default option on a scheduled personal property endorsement to your homeowners policy. It gives your insurance company the option to replace an item at an amount lower than the value listed on the policy. This would happen if this lower amount would return the item to its original condition or replace the item with one of like kind or quality.
Although the repair/replacement option puts a customer in the same position as before a loss, I often hear that the agreed value option provides a more satisfying claims experience for the policyholder because the settlement tends to match the expectations of even the most meticulous clients. For this reason, I typically recommend choosing the agreed value loss settlement option if available.
Some companies also offer a blanket inland marine form, which allows a policyholder to have additional jewelry coverage limits without having to list every individual item. This form is best for a situation where a customer owns many smaller value items, as this form has a per item limit.
One last option offered for jewelry coverage is paying a lower premium for items kept in a vault. To be specific, the lower rate charged for this option is intended for items kept in a bank vault, away from the your home. The discounted rate is given with the idea that jewelry off-premises would not be harmed by an event at your home such as fire or theft.
With all of the options available to protect your jewelry, the best thing you can do is talk to your independent agent to see which coverage will be most “valuable” to you!
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