Getting engagement ring insurance should be one of the first things you do after getting engaged! Sure, phone your mom and dad first...but phone your insurance guy second!
Back when I was a radio show host, I had a caller ring me up in tears to report that the diamond of her engagement ring had fallen out in the mall parking lot. She was beside herself in tears and could hardly see the ground through her blurry eyes.
Luckily we managed to wrangle up a few listeners to help her and, miraculously, they actually found the diamond! Needless to say, the listener immediately had her beautiful piece covered. It’s a lesson to all of us never to leave our valuables without coverage . Sure, you’ll never be able to replace the sentimental value of the piece, but at least you can, in some way, replace it.
Find Out The Value
Covering your ring always starts with a proper appraisal of the piece. An appraiser will tell you what the piece is worth and this documentation is required by insurance companies. An appraisal doesn’t take very long and will be accompanied by a document you can present to insurers.
Is Your Homeowner's Insurance An Option?
Once you have the appraisal, most people’s first step is to approach the company through which they cover their home (assuming you have one). Most of the time engagement rings can be added to a homeowner’s insurance policy. This is known as a ‘rider’ and the cost of doing so will vary. It’s safe to say that the engagement ring insurance will cost one to two dollars for every $100 in replacement value. For instance, a ring that costs $5,000 will cost between $50 and $100 to insure every year.
While adding a ring rider to your homeowner’s may seem like the easiest option, it isn’t always the best option. While this type of policy will probably insure you against the loss of your ring due to fire or natural disasters, it may not cover your ring while it’s outside of the home. It’s very important to read the fine print of any policy before signing on the bottom line.
Other Types of Insurance
There are three other types you may wish to explore before agreeing to just any engagement ring insurance.
Actual value policy
An actual value policy is just what the name implies. It covers the current value of your ring minus daily wear and tear. In essence, your engagement ring will lose its value in the eyes of the policy as the years go by. While this is usually an inexpensive way to go about getting engagement ring insurance, it may not be the smartest choice.
This type of engagement ring insurance will replace your ring at the current market value. Your new ring will be the same diamond size and clarity with the same cut and type of gold. That means that if your ring is more valuable today than when you bought it, you’ll end up ahead. However, if your ring isn’t worth as much (diamond prices have gone down, the price of gold isn’t what it used to be, etc), you’ll end up with a ring that isn’t worth as much either.
Valued At Policy
Getting a Valued At Policy for your engagement ring is probably the hardest type of insurance to attain (and the most expensive!), but it definitely is the best. It factors in things like sentimental value and custom-design work. With this type of engagement ring insurance you may actually end up getting more for your ring that you originally paid. You’ll be paid out the amount of money you set at the signing of your policy.
Before You Sign Your Policy
Be smart before you sign any type of engagement ring insurance policy. Ask questions! Be sure you know what the ring will be covered for. What if you lose the diamond in the grocery store? What if the ring is stolen? What if you lose it? Make sure you understand the ins and outs of your policy.
Understand how you go about making your claim and what steps are involved before you make a commitment. Will the company be writing you a check or will they expect you to go to one of their jewellers to pick out a new ring?
Other things to ask include:- Is there a deductible? If so, how much?- Does this policy cover travel overseas or to another country close by?- What steps do you need to take before you make a claim? Do you have to file a police report before you contact your engagement ring insurance provider?
Talk to a few companies before making your final decision. Make sure that you feel comfortable and make sure that all of your questions are answered thoroughly. No one ever wants to lose something as sentimental as an engagement ring, but knowing that you are properly insured can make the experience much more bearable.