Proposing? A Guide to Protecting the Biggest Purchase of Your Life
Detroit, MI
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January 03, 2023 01:34 PM Eastern Standard Time
Purchasing an engagement ring is an exciting step for a couple. Choosing the perfect ring takes time and careful consideration to ensure it fits the couple’s personality and style. Similar to other important investments, like buying a new home, there are risks to investing in an engagement ring.
Engagement rings, especially when worn regularly, are prone to damage, loss and theft. Protecting your engagement ring from unpredictable circumstances that could cause financial and emotional stress is essential.
Safeguard your future by learning how to protect the biggest purchase of your life and all of the insurance options available for engagement rings.
Why Protect an Engagement Ring?
Engagement rings are an important symbol of commitment, with an average investment cost of over $6,000. If you’re in the market for a ring, you may have heard about the three-month rule, which says couples should spend the equivalent of three months’ salary on the ring. For those who follow this rule, this ring is most likely the most expensive item a couple owns.
Insuring a ring ensures it is protected in the event of loss, theft or damage. For uninsured rings, the couple will likely be unable to afford a replacement and either need to save for the future or choose a less expensive replacement option.
While insurance can’t cover the sentimental value of an engagement ring, financially, engagement rings are similar to any large purchase, like a home or car, and they can be protected in the same way. Couples can rest assured that while they may not have the same ring, especially in the event of theft, they can easily replace the ring that symbolizes their love.
What Can Happen to Your Engagement Ring?
Despite taking excellent care of your ring, accidents happen. In a BriteCo survey, 41% of respondents said they had misplaced their jewelry after taking it off. This simple mistake could cost you thousands of dollars. Damage can occur to your ring, including improper cleaning or exposure to damaging elements like saltwater and chlorine.
Less than 5% of stolen jewelry is recovered, so you’ll likely have to purchase a new engagement ring if yours is stolen. For unexpected events, having a fallback plan can save you from expensive replacement costs.
What is Jewelry Insurance?
Jewelry insurance provides coverage for jewelry specified in your insurance contract. If something happens to your insured jewelry, your provider is obligated to repair or replace your jewelry based on your contract stipulations.
Most jewelry insurance involves an appraisal of the jewelry to give the insurance provider an accurate estimate of what it is worth. Appraisals use diamond grades, clarity, metal type and other factors to determine the value of a ring. Insurance providers may ask for a sales receipt, proof of an appraisal or pictures of the jewelry to prove that the jewelry is in good condition before offering coverage.
Although jewelry insurance is vital for engagement rings, many couples forgo the protection. In a survey conducted by BriteCo, 36% of millennials and Gen Zers had yet to obtain insurance for their engagement rings, leaving them at risk for repair or replacement costs.
Some cited reasons such as being unaware of jewelry insurance, mistaking a warranty for jewelry insurance and not knowing where to purchase jewelry insurance. Understanding how to get insurance on engagement rings can help you make an informed decision about protecting your engagement ring.
What Does it Cost to Insure an Engagement Ring?
Insuring engagement rings can cost anywhere from 05% to 1.5% for every $100 of the appraised value annually. Depending on your insurance provider, this cost is typically spread out over monthly payments or paid up front.
To reduce your monthly payments, you may have the option to pay a deductible when filing a claim on your insured jewelry. Deductibles are a set price and can range from $500 up to tens of thousands, depending on the value of the jewelry.
When comparing jewelry insurance options, it’s essential to look at your monthly budget. You can choose lower monthly payments with a larger up-front deductible or a larger monthly fee with no cost to replace or repair your jewelry.
What Does Engagement Ring Insurance Cover?
A standard jewelry insurance policy covers jewelry if it is lost, damaged or stolen. In addition to standard coverage, BriteCo, for example, provides coverage for mysterious disappearances, which is a commonly filed claim.
A mysterious disappearance is when buyers aren’t sure whether their jewelry was stolen or lost. Some providers have policies covering preventative fixes or maintenance costs, such as repairing bent prongs or tightening loose stones.
Jewelry insurance often won’t cover repair costs for minor damage caused by everyday wear and tear. Most providers don’t cover manufacturer defects or damage caused by improper jewelry storage.
Insurance won’t cover any voluntary parting costs, meaning that your insurance provider isn’t responsible if you attempt to sell your jewelry but don’t receive the proper payment.
Jewelry Insurance vs. Homeowners Insurance Coverage
If you’re a homeowner, it’s possible to rely on your homeowners insurance policy to protect your jewelry. Most homeowners insurance policies include personal property coverage that can be applied to high-value items such as jewelry.
Personal property coverage typically limits coverage to $1,000 to $2,000 for personal items, so you’ll have to pay the remaining cost for jewelry over this amount.
Jewelry insurance provides complete coverage for your engagement ring so you won’t have to pay out of pocket if you need to replace your ring in the future. Some insurers like BriteCo cover up to 125% of the appraised value of your ring.
How to Insure a Ring
Buying an engagement ring for the love of your life requires significant time and thought. An equally important decision is how to protect your investment in the event of damage or loss. Learning how to insure a wedding ring can help save you time and money in the long run and help give you peace of mind.
Get an Appraisal
Before you buy your ring, or when you acquire your ring, get an appraisal. A jewelry appraisal checks damage and confirms value. Most jewelers will show you an appraisal before you purchase. If you acquire the ring by other means, such as a family heirloom, get it appraised as soon as possible.
Not only will an appraisal put you at ease that your ring is in perfect condition, but it is also required when shopping for insurance. The provider will need a certified appraisal to calculate your coverage and insurance payments. Appraisals can cost anywhere from $50 to $150 but are often included when purchasing new rings.
Choose a Provider
Choosing the right insurance provider is a critical decision when insuring your ring. The coverage options, prices and stipulations vary significantly between providers. You must ensure that your ring will be covered under any eventuality, including theft or loss, and can be replaced entirely. To help ensure you’re choosing the best provider, ask the following questions:
Are you covered for damage or just loss and theft?
Will the policy adjust for inflation?
What types of repairs contribute to the deductible?
Are there circumstances that aren’t covered?
How will you need to prove the ring vanished when making a claim?
What happens if you cannot find a suitable replacement?
Are there restrictions on where you can purchase a new ring?
Who repairs your ring?
Choose the Right Plan for You
When choosing an insurance plan, finding a plan that works for your specific needs is essential. You don’t want to overpay for services that don’t apply to you or choose a plan that doesn’t cover all aspects you need. Common jewelry insurance plans fall under one of the following types:
Specialized coverage: Specialized coverage means that you purchase specific jewelry insurance rather than relying on the personal item coverage that is a part of homeowners insurance. Specialized coverage will be the right choice if you spend more than $2,000 on an engagement ring.
Nonspecialized coverage: If your engagement ring wasn’t a large investment, nonspecialized coverage could be an option for you.
All-risk coverage: Some plans only provide coverage for loss and theft, but if you purchase all-risk coverage, this also includes coverage for damage like scratches, missing gems or broken bands.
High-deductible plans: Having a high deductible will lower your monthly cost but raise the out-of-pocket expense you’ll pay when you file a claim. High-deductible plans can be great for people who don’t wear their jewelry frequently or feel they are at low risk of losing or damaging their ring.
Low-deductible plans: A low-deductible plan is suitable for someone who is comfortable paying a slightly higher monthly cost and isn’t looking to risk a larger sum of money if they file a claim.
Get a Reappraisal
Getting your ring reappraised every two or three years is a good idea to keep your insurance replacement value current. Keep any paperwork you get while purchasing your ring and receiving an appraisal to have accurate information when it’s time for your next appraisal.
If you make any modifications to your ring, such as adding a band or replacing diamonds or gemstones, you should have your ring reappraised to determine the new value of the piece. If you fail to get an updated appraisal on any modifications made to your ring, you may not be compensated for the full cost of your ring when you file a claim.
Update Your Plan When Necessary
Because you will theoretically have your insurance plan for the rest of your life, it’s essential to update it when applicable life events happen. Much like updating your policy after a ring reappraisal, you should also update your plan when you move.
Because most policies are typically tied to an address, a ring that no longer resides at that address may no longer be covered by the policy. To ensure your coverage remains intact, you must update your address after every move.
Protect The Biggest Investment of Your Life
Buying an engagement ring may be the most important purchase of your life. Your ring symbolizes love, commitment and devotion. Protect this beloved symbol and your investment to ensure your ring is protected no matter what happens in life.
By following the steps to picking the best ring, choosing the right provider and opting for the right plan, you can have the peace of mind that your investment will be protected for the rest of your happy marriage.
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