High-value jewellery such as necklaces, earrings, bracelets, and watches need to be protected. Whether a heirloom or a newly purchased piece, your beautiful and expensive jewellery is designed to be worn and admired. Purchasing an insurance policy secures your peace of mind because you don’t have to worry about losing lots of money in case of loss or theft.
When it comes to choosing jewellery insurance, there are numerous policies available in the market. Wading through the options can be confusing for most people - especially if you don’t know what to look out for. The key is to go for attractive features such as low deductibles, affordable premiums, flexible coverage limits, and geographical coverage.
What Do You Mean By Jewellery?
Jewellery refers to personal ornaments such as loose gemstones, rings, necklaces, earrings, bracelets, or watches that contain precious metals or jewels. It is important to keep in mind though that definitions may vary slightly between insurers.
Why Do I Need Special High Value Jewellery Insurance?
To put it simply, you need jewellery insurance because your regular home, contents or building insurance policy does not offer enough coverage for your jewellery – especially if they’re very valuable.
Certain policies are good enough to insure most items, but they do not capture the unique insurance requirements for high value jewellery.
Why Home, Contents, or Building Insurance May Not Sufficiently Cover Your Jewellery
Most property insurance policies will offer some cover for jewellery. But as with most things in insurance, the devil is in the details.
Most insurance policies have mandatory limits on jewellery that may be less than the value of your jewellery collection.
They also calculate the amount of compensation based on Actual Cash Value (aka. the purchase price of the item with depreciation applied) or Replacement Cost (the cost to repair or replace the damaged item). If you have or know about jewellery, you can spot the problem right away. Some unique pieces are one-of-a-kind and irreplaceable and some pieces of jewellery appreciate over time. Applying depreciation or calculating its value based on purchase price is not appropriate and does not capture its true value.
And as we’ll discuss below, some of the terms and conditions don’t take into account the unique characteristics of high value jewellery.
What Does High Value Jewellery Insurance Cover?
It varies between each insurance company but the covers provided by your regular insurance and specialised jewellery insurance differ in 2 important ways:
→ APPRAISED VALUE
A specialised jewellery policy will allow you to schedule individual items or sets of jewellery onto the policy and insure them at appraised value. This ensures you get full coverage for what the jewellery is actually worth in the marketplace. The appraisal will determine a fair market value for the item by taking into account the rarity, uniqueness, artistry, history, and other factors.
→ PAIR & SET RULE
In most property insurance policies, there is something called the pair and set rule. This rule means that the insurance company will only pay for the item in the pair or set that was lost. For example, if you lose 1 shoe or 1 earring out of a pair, the insurance company will only pay for that 1 shoe or earring that was lost.
As you can imagine, this simple rule creates huge limitations when it comes to jewellery. In practical terms, 1 earring is nearly worthless without the other and replacing one gem in a necklace doesn’t always work because the colours may not match.
Specialised High Value Jewellery Insurance will replace the entire pair or set – as long as you agree to surrender the original items to the insurer.
What Else Do I Need To Know?
If you collect jewellery, most insurers will offer discounts for items not being worn and are stored in a safe or a deposit box.
How Can I Get Insurance For My High Value Jewellery?
Get in touch with us to make sure that your jewellery is properly insured, valued and documented.
The insurance advisors at Trusted Union offer comprehensive insurance solutions for your high value jewellery without the mandatory limits, with global coverage and with terms and conditions that take into consideration the unique characteristics of high value pieces of jewellery.
High Value Jewellery Insurance FAQ
Whether you have an heirloom piece, a wedding ring, or an extensive collection anyone with expensive jewellery (this includes watches) should consider purchasing High Value Jewellery Insurance as part of your protection plan.
Most home insurance policies do not provide adequate protection for high value jewellery items as they do not capture some of the unique characteristics of such items. In these cases, the only way to get adequate protection for your jewellery is through High Value Jewellery Insurance.
→ For starters, many home insurance policies have mandatory limits on jewellery that are often times less than the value of one piece of high value jewellery let alone an entire collection.
→ Another key issue is how compensation is calculated. If your home insurance policy is offering coverage on an Actual Cash Value (purchase price minus depreciation) or Replacement Cost basis (whatever it costs to repair or replace the item), then you have a problem. Oftentimes, jewellery appreciates in value or are irreplaceable one-off pieces. Neither of these payment methods accurately capture the needs of high value jewellery owners.
→ If you have High Value Jewellery Insurance, your property will be covered on an appraised value basis. This ensures that you have coverage equal to its current market value taking into account things like rarity, uniqueness, artistic value, history, and other factors like raw material value.
→ Most regular insurance policies will have a pair and set rule. This rule says that if you lose 1 item in a pair or a set the other item is still considered to have proportional value. That means if you lose 1 shoe from a pair of earrings worth HK$20,000, the insurance company will only pay you HK$10,000 as the other shoe is still considered to have half value.
With a High Value Jewellery Insurance policy, the pair and set rule is deleted. You will get the full HK$20,000 for the earrings as long as you surrender the remaining earring to the insurance company.
If you have jewellery that’s purchased purely as an investment or collector’s item, you can get discounts for items not worn and are stored in a safe or safety deposit box.
The level of protection would vary based on the value of the jewellery but you should consider storing the jewellery in a safe or safety deposit box when not in use and installing a monitored burglar alarm for your house to deter and prevent thieves.
Most losses are preventable and a bit of carefulness can also make a huge difference. Make sure you put your jewellery away properly, lock your doors and close your windows when you leave the house and try not to wear flashy jewellery in dangerous places.
To get an obligation-free quote on High Value Jewellery Insurance and more risk management strategies, contact a Trusted Union insurance advisor.
Oh and don’t forget to keep your receipts and have your items reappraised every 2-4 years to make sure you have an accurate fair market value.