Getting engaged is one of the best things that can happen to you. But what if you lose your engagement ring? Or what if it gets damaged or stolen? It may not have crossed your mind, but insuring your ring is important in case these things happen. So here’s everything you need to know about engagement ring insurance.
Why and when do you need engagement ring insurance?
Whether you have an engagement ring that costs $500 or $50,000, an insurance policy can help you honour not only it’s financial value, but also its sentimental value. And in the event that your engagement ring becomes lost, damaged, or stolen, you can always get it replaced if it’s insured. That’s why it’s important to take out engagement ring insurance soon after you buy the ring. The sooner your ring is insured, the sooner you’ll be protected.
7 tips for insuring your engagement ring
1. Keep your receipt or invoice
The first thing you should do is keep the receipt or invoice you got after buying your engagement ring as proof of purchase. If your ring ever gets lost, damaged, or stolen, you’ll need to give the receipt or invoice to the insurance company when you make a claim so they know how much you paid for the ring to determine the payout amount. You should also make a photocopy or digital copy of the receipt or invoice in case something happens to the original.
2. Get a diamond certificate and an appraisal
If the centre stone of your engagement ring is half a carat or larger, your jeweller should give you a diamond certificate. If they didn’t, ask them for one. The certificate lists the colour, cut, clarity, and carat weight of the diamond/s, which are known as the “4Cs”. An appraiser will use this to accurately determine the current value of the ring. This information can also be useful in tracking down your ring if it’s ever lost or stolen.
The appraiser will also look at the 4Cs of any coloured stones; the type, fineness, and carat of the metal; as well as any marks, hallmarks, or stamps on the ring. Choose a reputable appraiser to appraise your ring, preferably one who’s a member of a national appraisal society.
You’ll also need to provide a copy of the diamond certificate and appraisal to the insurance company, so they can make a more accurate determination of the payout amount.
In Australia, studies show that when it comes to losses or thefts of unspecified jewellery, 13% of claims containing jewellery are underinsured. The average underinsurance gap between the value of the ring and the payout is $3,936.45 per claim. This is because most Australians don’t keep records of their jewellery to cover them in cases of loss or theft. In fact, 39% of Aussies aged 69 years and older keep valuation certificates compared with only 29% of Generation X and 25% of Generation Y.
3. Ask questions before choosing a policy
The next step involves shopping around for engagement ring insurance. Be sure to ask insurance companies the following questions to help you choose the right policy:
- How do I prove the ring is lost if I make a claim?
- Am I covered for damage, or only loss and/or theft?
- Are there any circumstances of damage or loss that aren’t covered by the policy?
- Will the policy be adjusted according to inflation?
- Will I continue to be insured when I’m not in the country?
- Is the ring covered for the full cost or just a fraction of it?
- Will the company give me a cheque to replace the ring?
- If I’m insured for replacement rather than a cash payout, where can I buy a new ring? Will it be through a jeweller of the company’s choice or mine?
- What happens if I can’t find a suitable replacement?
- Can I choose who repairs my ring?
- If I have a vintage or unique ring, how will the quality and size of the diamond and the replacement be documented?
4. Find out how much it costs to insure your ring
Another thing you should consider when shopping for engagement ring insurance is the cost of insuring your ring. The cost is based on several factors, including:
- the value of the ring
- where you live and theft rates in the area
- whether the policy has a deductible.
A policy without a deductible has a higher monthly premium. You should also ask insurance companies what types of repairs contribute to your deductible.
The average cost of insuring a ring is $1-$2 for about every $100 it’s worth. So if you have a $10,000 engagement ring, you can expect to pay a premium of $100-$200 a year. You may have to pay a bit more than this if you live somewhere with a higher risk of theft, but you can get your cost down by storing your ring in a vault or safe when you’re not using it.
5. Pick the right insurance cover
You can insure your engagement ring in two ways:
Home and contents insurance – This allows you to cover items inside your home, including your engagement ring. If the ring was insured at your house or your parents’ house before the wedding, make sure to add it to the policy for your new home when you move in with your partner. Home and contents insurance usually doesn’t cover any loss, damage, or theft of the ring outside of the home unless you took out optional/extended cover instead of standard cover.
Jewellery insurance – You can ask your jeweller if they work with an insurance company that offers jewellery insurance, or you can look for a jewellery insurance company yourself. Jewellery insurance may offer more coverage than home and contents insurance, such as covering the full cost of the ring or replacing a lost or stolen ring instead of paying a set amount of cash.
Make sure to read the fine print of the policy to help you choose the right insurance cover.
6. Choose an insurance company and a jeweller
Once you’ve chosen the policy that best suits your needs and budget and the right type of insurance, it’s time to narrow your choices down to just one insurance company and jeweller.
Whether you want to insure your engagement ring through your home and contents insurance or through jewellery insurance, the insurance company you choose will largely depend on whether their policy is right for you and if you’re able to choose your own jeweller to replace or repair your ring.
In some cases, you may have to use the insurance company’s jeweller or receive a payout lower than the replacement value if you choose your own jeweller. If you have a ring made by a jeweller to their own design, choosing the insurer’s jeweller may be problematic for you.
Moreover, some insurance companies have a large network of jewellers with whom they have discount agreements, so it’s cheaper for the company to get the replacement done in-house. For example, even if your engagement ring costs $10,000, the insurance company could replace it for only $5,000 because of the discount. You can either accept this or take a cash settlement that’s lower than the insured amount and use your own jeweller.
7. Reappraise your ring
Have your engagement ring re-appraised every 2-3 years so if you ever need to make an insurance claim, you can receive a cash payout or replacement at the current value of the ring. You’ll also need to know the ring’s current value so it’s properly insured. And use the same appraiser if you had a good experience with them. Reputable appraisers often keep a copy of the original appraisal and work from that, reducing appraisal costs. But make sure to bring a copy of your appraisal just in case they don’t.
Keeping your engagement ring safe
Think of engagement ring insurance as a safety measure. If your ring ever gets lost, damaged, or stolen, your insurer will give you the money to replace it. Instead of waiting several months while you save thousands of dollars again for a new ring, you can use the insurance money to get a new one straight away.
The first step is to get the ring
If you’re thinking of buying an engagement ring, look no further than Australian Diamond Brokers. We offer a wide range of engagement rings, from white or pink diamond engagement rings to sapphire or ruby engagement rings. We can even create a custom engagement ring for you. So give us a call on 02 9232 2328 and we can help you find or create an engagement ring that you’ll treasure forever. And once you get your ring, keep it safe with engagement ring insurance.
by Australian Diamond Brokers : May 22nd 2018 Come visit our store or browse our website to find out more.