Many people overlook the need to properly insure their expensive jewelry,
believing that it is automatically covered by their homeowners policy.
While homeowners policies do cover jewelry, this insurance usually is
subject to a much lower limit than the overall contents coverage. This
reduced limit is called a "sublimit," and a typical sublimit is $1,500 for
loss by theft of jewelry, watches, and precious and semiprecious stones.
If your jewelry is worth more than the sublimit in your homeowners policy,
you should consider purchasing specific insurance to cover it. The
following is a good process to follow.
* Arrange an appointment with us to review your jewelry coverage. Bring as
much information about your jewelry portfolio as possible, including any
appraisals.
* If your high-valued jewelry has not been appraised within the last 3
years, consider obtaining an appraisal from a reputable jeweler. Insurance
companies often require an appraisal on more expensive jewelry from a
graduate of the Gemological Institute of America (GIA). The Institute's
G.G., G.J., or A.J.P. designations at the end of an individual's name
indicate that the jeweler has achieved a high level of professionalism
with an education backed by a respected nonprofit organization.
* Make sure the appraisal has a description of the diamond's four C's --
(a) carat, (b) cut, (c) clarity, and (d) color. The "carat" refers to the
weight of the diamond. The quality of the "cut" of the diamond results
from the way light enters the stone and is reflected back. "Cut" is also
used to refer to the diamond's shape, such as round or pear-shaped. The
"clarity" refers to the prevalence of minor spots, lines, bubbles, or
other natural imperfections within the diamond. The "color" denotes the
tint a diamond may possess. Remember that the better the appraisal, the
fewer problems you will encounter with the insurer if you ever have to
make a claim.
* Purchase inland marine coverage that can be added via an endorsement
onto your homeowners policy. This endorsement (also available as a
separate policy) may provide much broader coverage than the limited
protection found on the unendorsed homeowners policy. Check with your agent!
* Consider keeping any valuable jewelry you rarely wear in a safety
deposit box at your bank.
* Review your jewelry protection with us at least every 2 years or
whenever you sell or purchase high-value jewelry.
This article is brought to you by Peter Tuttle, CPA at Cool Springs Insurance.com. You may contact me by sending an e-mail via the link to the right of my active rain blog page. Please visit my website at http://www.petertuttlecpa.com/
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