You’ve just gotten engaged—congratulations! If you’re like most Americans, you probably proposed with a beautiful gemstone ring. Not everyone prefers a diamond as the center gem, but it’s certainly the most popular choice. According to an article in the New York Times, couples spent over $11 billion on diamond engagement rings and other wedding-related jewelry in 2012. Of course, not all of us can spend $65,000 on a ring like Prince Charles did back in 1981. But, on average, couples spent approximately $4,000 on the engagement ring, which doesn’t include approximately $1,000 on the bride’s wedding band and another $500 on the groom’s. Such an investment should be protected with engagement ring insurance.
When my husband went shopping for an engagement ring, he couldn’t find exactly what he was looking for. So, he contacted a jeweler who was willing to work with him to design a ring unique to meet his and my tastes. This took months of effort, but when it was finally completed, it was beautiful. After all that time spent on the engagement ring, he was afraid I would accidentally do something to damage or lose it, and he purchased a personal articles policy. Far from being insulted for his low confidence in my ability to keep track of the ring, I was relieved. I have a history of losing things (purses, coats, phones, etc.) and felt a sense of confidence in knowing that the ring was protected.
Spending so much money on a single item can be difficult for most young adults who are already in debt from college loans and credit card spending. So, nothing could be worse than accidentally losing that ring or having it stolen. The best means of protecting your investment is through insurance.
The sentimental value of your new engagement ring is priceless, but no matter if you’ve spent $500 or $50,000 in a declaration of love for one another, an engagement ring insurance policy is a great way to protect your purchase.
There are two main ways that you can obtain insurance coverage for your engagement ring.
1. The first way is to add a rider or extension onto your existing homeowners or renters policy. Your insurance will already include some protection for the property in your home, but this limited to a certain dollar amount pre-determined by the insurance company. The average amount of coverage is between $1,000 and $5,000. This may not be enough, especially if you also own expensive electronics, art, or other jewelry that needs to be included in your personal property coverage.
2. The second option is to purchase a separate personal articles policy designed especially for your engagement ring. Often, insurance companies that also offer auto, home, and life insurance have this type of policy available, but you can also consider obtaining coverage through an insurance company specializing in jewelry.
Keep in mind that a homeowners insurance rider or personal articles policy may only cover the ring if it is stolen or damaged in a fire, but not if it is lost accidentally. This additional coverage may cost extra, but well worth it if you are prone to losing items.
Before you insure your ring, you need to know how much it is worth. This can be different than the amount you or your fiancé paid for the item. First, your jeweler must have assessed the ring within the last two years and it must include a description of the four C’s: cut, color, clarity, and carat-weight. Additionally, you may also want to consider obtaining a grading report from the Gemological Institute of America. This organization tasks itself with the analysis and grading of gemstones. Be sure to also include photographs of the ring when you bring the reports to your insurance agent.
The value of an engagement ring will increase annually due to inflation. So, be sure to have the item re-assessed every few years to ensure that the total cost of the ring is covered by your policy.
Next, bring a list of questions to your insurance agent to help you make the right decision on the policy for you and your future spouse. TheKnot.com has several great questions to ask, including:
- Will the ring be covered if it is lost as well as stolen?
- How will the ring be replaced if something happens? Do you need to buy a replacement ring from a specified jeweler?
- How will the insurance company value the ring if it’s vintage or unique in some way?
- Will the full cost of the ring be covered?
- What sort of proof is needed of a lost or stolen ring in order to make a claim?
- Are there any circumstances in which the ring will not be covered (like falling down the garbage disposal while it’s on)?
Once you have decided on the right policy, it’s time to consider the costs. On average, protection for your ring is not overly expensive. You can expect a deductible with an annual rate of $1 to $2 for every $100 your ring is worth. So, if your ring is valued at $7,000, then your deductible will be $70 to $140 per year. That certainly seems worth it to have the peace of mind in knowing that your expensive purchase will be protected. Speak with your insurance agent today. Who knows, perhaps you would like to set up your wedding insurance at the same time! They have the expertise and experience to help satisfy your individual needs.
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Enhanced Insurance is not written by attorneys. If you’re looking for legal advice, you need to contact a lawyer. Further, insurance practices and forms change constantly and are varied from state to state. For definitive answers in your area, contact a local agent.
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