Jewelry Safety Part 3: Insurance

18k gold and blue/green tourmalines

No matter how much you do to protect your possessions it can still be the case that someone actually manages to steal something (or that you lose something).  And that is why you should always carry insurance on your jewelry if you have enough value.  Usually you can get coverage on your jewelry with any home owner's or home renter's policy. There are also companies like Jeweler's Mutual that offer coverage only on jewelry (I'll get back to them in a bit).

The problem, however, with many jewelry policies is that you won't be paid any money if you have a loss. Most of the time the insurance company insist that you work with a jeweler that they have an agreement with to get a replacement. This can be problematic for a number of reasons, The first is that if you have a unique and/or designer piece, the jeweler may not be able to truly replace it. The second is that you are somewhat dependent on what that jeweler sells quality wise.  Not all "E" color, VVS1 clarity diamonds are created equal.  Some are better cut than others.  If the jeweler doesn't specialize in better cut stones you may end up with something that doesn't look nearly as good.  Additionally, different grading labs issue certificates with somewhat different standards.  The European Gem Labs (EGL) routinely overgrade almost every stone they give a certificate to.  For this reason, an "E", VVS1 diamond with an EGL cert will invariably be priced lower than one with a cert from the Gemological Institute of America (GIA).  So if the jeweler you are being forced to use buys mostly stones with EGL certs you won't necessarily be getting back what you originally had.

Despite the idea that insurance companies are supposed to "make you whole" in the event of a loss, they are really in existence to make money. That means that they will do everything possible to pay out as little as possible on any claim.  And that means that you have to have a clear understanding of what they are agreeing to do in order to make you whole again.  I run into very few people who actually read their policies (or at least more than the first page or two), and I think sometimes the insurance companies write their policies the way they do in order to make sure you don't read (and fully understand) them.  However, if you have a lot of jewelry it is critical that you do actually read the applicable parts so you understand what the companies are willing to do.  If the only thing that will make you happy is a cash payout, you may have to change companies to find one that will actually do that, or pay more with your company so that they will.  If you want to make sure that you are allowed to use your own jeweler, then you'd better make sure that they allow you to do that as well.  

Jeweler's Mutual is the company I am insured with and the only product they sell is insurance on jewelry.  Consequently their knowledge of the field goes far beyond what most insurance companies have.  They guarantee that you can go to the jeweler of your choice in the event of a loss. This can help tremendously if you have designer pieces as it means you can go back to your original source.  They also are a mutual company and have routinely over the years paid out rebates on their policies to policy holders (although there is some restriction on how they do this on individual policies so please make sure you read the fine print on that).

There is also a peripheral issue that is a little less frequent now than it used to be but still occurs.  Often jewelers, in an attempt to make you think you're getting a bargain, will give you an appraisal on a piece that is much higher than what you paid for the piece.  This is actually unethical (except in the case of a "true" sale and by true I mean one that really is only an occasional event, not a department store type sale where everything is permanently on sale) and it happens to be bad for your pocketbook as well.  If you buy a piece for $10,000 but the jeweler is hustling you and says this piece is really worth $15,000 so that's what I'm going to put on the appraisal you have to understand what is going on.  If you went back the next day and bought the same piece again, the jeweler would sell if to you for the $10,000 again.  And if the insurance company comes to the jeweler and asks for a replacement piece, they are going  to pay less then the $10,000 because they have deals cut with the jewelers to get large discounts based on their volume of business with them.  In this case you end up spending more on your insurance than necessary because the value has been inflated on the appraisal.  Appraisals of new pieces should ALWAYS reflect actual prices paid (except in the case of a true sale or occasionally when the metal markets are as wild as they are right now and a piece was purchased at older metal prices).

The earrings above are 18k gold with some beautiful blue/green tourmalines.