Who needs it?
"This is typically the most valuable purchase our customers have made, and it's recommended to everyone," says New York City-based jeweler Anna Sheffield. But there are exceptions. If the cost of insuring your ring is more than the cost to replace it, then it may not be worth it. As a general rule, Mark Keeney, vice president of marketing at Ritani, says customers spending more than $1,500 should consider insuring their purchase.
What are the options?
There are a few simple ways to insure your ring. Which one you choose depends on the value of the ring and what insurance policies, if any, you already have. If your ring is valued at $1,000 or less and you have homeowners' or renters' insurance, then you're likely covered, as that's the average jewelry limit, says Ryan Crosby, a State Farm insurance agent. However, don't assume you have this coverage. Read your personal policy closely. You can also add what's called a rider onto this policy, but this is typically limited at around $2,500.
If a homeowners' or renters' insurance policy or rider doesn't cover your ring, the best option (and often the most beneficial regardless of value) is a personal articles policy, says Crosby. This offers much broader coverage than other options, and you'll have peace of mind knowing you're protected if your ring is lost, stolen, or damaged. When choosing a personal articles policy, make sure it's a replacement cost policy and not an actual cash value policy. Why? An actual cash value policy has an agreed on price. So if the ring is insured for $10,000, that's all you can recover. With a replacement cost policy, your policy will replace the ring at the higher amount because it has inflation built into the policy, says Crosby.
Not interested in a homeowners' or renters' insurance policy or not getting the coverage you need? You can insure your ring using an independent company that specializes in insuring jewelry, like Jewelers Mutual.
Is an appraisal necessary?
If you're newly engaged, you'll just need your receipt. However, most engagement rings come with a valuation report or an appraisal, depending on the jeweler, when they're purchased. A valuation report details the gold carat, diamond or colored stone details, including weight, and any certifications the stone has, says Sheffield. An appraisal will provide you with the actual appraised value. If you're a little late to the game and your ring is more than two years old, you'll need to get it reappraised to insure it, says Crosby.
When looking for an appraiser, you'll want someone certified and knowledgeable, so do your research. "You want your appraisal to be as close to current market value as possible," says Keeney. "If it's too high you'll be paying too much insurance, and if it's too low you won't be covered enough on replacement value." To find a certified, reputable, and formally trained appraiser, Sheffield recommends looking to the American Gem Society.
For diamonds over half a carat, your jeweler should provide you with an independent diamond certificate. The industry standard is the Gemological Institute of America, or GIA, says Sheffield. This report, which will cover the 4Cs—color, cut, clarity, and carat—helps ensure that your diamond's quality is documented and provides the appraiser with the information they'll need to do an accurate appraisal.
How much does it cost?
There isn't a set cost for insurance. You can expect a ring that's valued at $10,000 to be roughly $97 a year to cover (or about $1 per $100), but a variety of factors, including cost, appraisal value, insurance requirements, and where you live, contribute to the cost.