Why should I buy insurance for my engagement ring and other types of jewelry and how do I do that? How do I know what I am covered for?
(NB: This advice applies specifically as regards US practices and policies though it may also be generally useful in other areas.)
The first step when you buy or are gifted a valuable piece of jewelry (including, but not limited to your engagement ring) is to check over your homeowner's or renter's insurance. Most policies are very limiting of the circumstances and/or value under which they will cover replacement of jewelry. Generally they may be expected to cover loss in a fire, and up to a certain total value cap from theft (commonly about $1500, but not at all for the situation of 'mysterious disappearance,' which is the most common to apply to lost jewelry or stones out of the jewelry.
So for pieces of jewelry that would exceed the cap of your homeowner's or renter's insurance, you will want to have a policy to cover their possible loss or theft. This can be in the form of a rider added to your main policy by the company you have insurance from already, or a separate policy purchased from a company that specializes in insuring jewelry.
Either way, the company you choose will typically want an appraisal of the jewelry's value. Though some may accept a receipt or invoice, an appraisal provides more information that will be useful should your jewelry need replacement, such as the grade and weight of any diamonds. The appraisal should reflect an accurate replacement price of the piece--as your policy will be calculated based on this value, you don't want to be paying more than you need to! Though the insurance will vary depending on the terms and whether there is a deductible, expect around $1-2 per $100 of value per year. Because the price of precious metals and stones fluctuates (mostly upward!), you'll want a new appraisal at least every five years or so in order for it to be up to date.
When choosing your policy, what should you ask?
Always check the fine print! Find out all the details of how different types of claim would work.
For example, if you only lose a stone, does the insurer dictate that you must use their choice of jeweler or allow you to choose? Do they pay directly or cut you a check? Do they require an estimate before they will pay?
Or, if the entire ring is gone, what is the process? What if an identical ring is not available? Are there circumstances the policy does not cover?
At Charles Babb Designs, we provide an appraisal with each order at no additional charge. If you choose to go the custom design route, we include an appraisal if you purchase the center stone from us. If you are using your own stone, the appraisal adds only $50 to the total price. We also offer appraisal services for existing jewelry brought to our studio, starting at $75 per piece.