He liked it so he put a ring on it, and now you’re wondering how you can insure your precious jewels.
Engagement rings don’t come cheap, so how would you (and your partner) feel if you lost the ring, it was stolen or was somehow damaged?
The good news is that contents insurance can cover your jewellery against loss or theft, or you can purchase specialist jewellery insurance for the protection you need. The bad news is that there are a few traps and pitfalls to be aware of when insuring your engagement ring. Keep reading to find out what they are.
Contents insurance can cover your beloved rock - and a bunch of other things!
Why do I need engagement ring insurance?
When Jay-Z proposed to Beyonce, he did it with an engagement ring valued at US$5 million – yikes!
Although your own ring probably isn’t quite as extravagant as Queen B’s, there’s a good chance it still cost your partner a pretty penny. It’s quite common for engagement rings to be worth several thousands of dollars, with jeweller Tiffany & Co reporting that couples in 2017 are spending an average of between $15,000 and $20,000 on engagement rings.
The financial impact if your ring is stolen or lost could be huge, but let’s not forget about it’s sentimental value. Engagement rings represent much more than just a pretty accessory, so how would you feel if your ring was gone and you simply couldn’t afford to replace it?
Our fingers change size and shape throughout our lives and even throughout the day, so you might be surprised just how easy it is for a ring to fall off and get lost. Throw in the risk of theft or damage and it becomes clear why insuring your engagement ring makes good sense.
What are my engagement ring insurance options?
If you want to insure an engagement ring, there are two main options:
- Contents insurance. If you’ve got a sparkly new diamond on your finger, you may be wondering: Will my home contents insurance cover me? The good news is that it will, as contents insurance can provide cover for the loss, theft and damage of jewellery items. However, you’ll usually need to add an extension to a standard policy to make sure your bling is adequately covered.
- Specialist jewellery insurance. The second option is to purchase a policy that’s specifically designed to cover jewellery against loss, theft and damage. This type of cover is available from providers that specialise in jewellery insurance. While it tends to offer a higher level of cover than contents insurance, it also generally costs more.
What does engagement ring insurance cover?
To cover an engagement ring under home and contents insurance, you’ll probably want it insured while you are outside the home. In that case, you’ll need to upgrade your policy by adding portable contents insurance, also known as personal effects cover.
Basic portable contents insurance doesn’t require you to describe your items or disclose their value. However, these “unspecified” portable effects policies usually have pretty low limits that may not cover your ring. For example, you might have a $6,000 limit per claim with a $2,000 limit on each individual item within that claim.
If this is the case, you’ll go with “specified” portable effects insurance, where you’ll get a specialised quote based on the value of your ring. These often go as high as you need them to go within reason.
This allows you to insure the high-value items you take with you outside of the home, like your engagement ring. You’ll be covered for:
- Theft of your engagement ring
- Accidental loss of your engagement ring
- Accidental damage to your engagement ring
- Incidents that occur at home or away from home
- The repair or replacement of your ring
What does this mean for you? It means that if burglars break into your home and steal your ring, your insurer will cover its replacement cost. It means you’ll also be covered away from home, such as if you lose your ring at the gym or if it’s accidentally damaged at work.
Can I get engagement ring insurance if I already have contents insurance?
We’ve explained how the only way your contents policy will cover your ring outside the home is if you upgraded it to include portable contents cover. But there’s nothing saying you have to go that route.
There are a few reasons you may want leave your contents insurance as is, and get a specialist jewellery insurer to cover your ring separately.
Drawbacks to insuring your ring with portable contents insurance
- Repairs. Most portable contents policies retain the right to have your ring repaired at the jeweler of their choice. Specialist insurers will often let you choose.
- Expertise. Home and contents insurers are not jewelry experts. A specialist insurer has the ability to source gems that are hard to find and may even increase your payout based on fluctuations in the market.
The decision is yours, so don’t feel obligated to use your contents insurance to cover your ring if it doesn’t meet your needs.
If you decide take out a separate policy for your engagement ring, just make sure you are not doubling up. If you previously added portable effects cover to your contents policy, make sure you cancel that part of your policy or remove your ring from your list of specified items.
How much should engagement ring insurance cost?
The cost of engagement ring insurance depends on a number of factors, including:
- The type of cover you choose. Specialist jewellery insurance will usually cost more than if you add personal effects cover to your home and contents insurance.
- The value of your ring. The more expensive the ring, the more it will cost to replace and therefore the higher your premiums will be.
- Where you live. Your address can also have an effect on the cost of cover, for example if you live in an area with a higher-than-average rate of theft.
As a very rough guide, it costs between $1 and $2 to insure your ring for every $100 it would cost to replace. So, if you’re sporting a $10,000 diamond on your finger, insuring the ring could add anywhere from $100 to $200 to your annual home and contents premiums.
How to get your ring insured
You’ll need to follow a few simple steps to insure your engagement ring as part of your contents insurance policy:
- Get it valued. Once you know how much the ring is worth, you then know how much cover you need.
- Review your policy. Is the standard unspecified personal effects cover included in your home and contents insurance enough to cover your ring? If so, make sure to check the fine print and exactly when you will be covered to decide whether this is the right option for you.
- Get specified personal effects cover. If unspecified personal effects cover is insufficient for your ring, you’ll need to apply to your insurer for specified personal effects cover. This will increase your premium, so get a quote to see how much cover will cost.
- List your engagement ring. List the high-value portable items you want covered, including your ring.
- Provide a valuation certificate. This can be used to determine the replacement value of your engagement ring and how much cover you need.
- Pay your premium. Purchase policy and enjoy the peace of mind that comes with knowing your engagement ring is covered.
Engagement ring insurance traps to avoid
The biggest trap many people fall into with engagement ring insurance is assuming they’re fully covered when this is actually far from the case. How does this happen? It usually comes down to the limits that apply to your valuables cover.
For example, if your engagement ring is worth $6,000 and your contents insurance provides a total of $10,000 cover for personal effects, you might mistakenly believe that you have enough cover. However, what you may not realise is that the insurer could also impose a limit on the maximum benefit it is willing to pay per item – and if that limit is $1,000, for instance, a successful claim will hardly be sufficient to replace your ring. With this in mind, take a close look at the limits that apply to cover and make sure your ring is insured for its full value.
Another important piece of advice is to check what happens if your ring needs to be replaced. Most people assume they will simply be allowed to choose any jeweller they want, but this isn’t always the case.
Insurers have agreements with a large network of jewellers, allowing them to access substantial discounts from those providers – so if your ring is valued at $10,000, your insurer may be able to get it replaced by one of its own jewellers for $5,000. Depending on the insurer, this could leave you with two options: accept the lower-cost replacement from the insurer’s jeweller, or accept a cash settlement (which may be much lower than the amount you insured your ring for) so you can get a replacement from your own jeweller.
Finally, also make sure you check the list of general exclusions that apply to your policy. For example, your engagement ring won’t be covered for general wear and tear.
Jewellery insurance 101
Remember a few basic pointers to make sure you end up with the right cover for your engagement ring:
- Check the fine print. If you’re relying on your contents insurance policy, make sure you read the fine print to make sure you’re aware of any per-item limits and total cover limits that apply. Will these be enough for you to replace your engagement ring if something goes wrong?
- Get specific cover for your engagement ring. If the standard cover limits on your contents insurance are insufficient, which is often the case, you’ll need to apply for additional specified items cover. This allows you to specify the individual high-value items you would like your policy to cover.
- Research the claims process. Check with the insurer to find out what evidence and documentation you will need to provide to support your claim, such as purchase receipts, professional valuations and photographs of your ring.
- Get it valued. To make sure you don’t under-insure, get your engagement ring professionally appraised. This will tell you how much it’s worth and how much cover you need. Tell the valuer that you are getting the ring appraised for insurance purposes.
Tips for insuring an engagement ring
Keep the following tips in mind when searching for the right engagement ring insurance cover:
- Don’t hesitate to get cover. You shouldn’t drive a new car home from the dealer without first insuring it, and you shouldn’t take your sparkly new bling out and about before it’s protected. Get cover in place as soon as possible.
- Know your options. Compare the pros and cons of covering the ring under your contents insurance over covering it with specialist jewellery insurance. If you don’t have renter’s insurance or home and contents insurance, you may want to consider a specialist jewellery policy.
- Calculate the cost. There are several factors that influence how your engagement ring will affect the cost of contents insurance, such as the ring’s value, where you live and theft rates in your neighbourhood.
- Do your research. You might want to ask your insurance provider a few important questions before getting cover for an engagement ring. For example, will it be covered away from home, including overseas? Can you choose who repairs the ring? What will you need to provide as proof for your claim? Will the level of cover increase each year in line with inflation? If you need to replace your ring, will you be able to shop at your chosen jeweller?
- Get it appraised. To get the right level of insurance for your engagement ring, you’ll need to know how much it’s worth. Most insurers will insist on a valuation for rings above the $1,000 or $2,000 mark, so get a professional valuer to give you an appraisal. Of course, make sure to choose an appraiser who has all the appropriate credentials.
- Get it re-appraised. If your partner chose wisely, hopefully your engagement ring will be a sound investment that increases in value. It’s worth getting it re-appraised every couple of years to make sure you always maintain a sufficient level of insurance cover.