Are Diamonds Covered Under Homeowners Insurance?
Purchasing valuable jewelry as a gift for someone special or receiving an heirloom diamond through the passing of a family member carries worries about loss or theft. Although recouping the sentimental worth of a special gift or the emotional value of a treasured piece of family history is impossible, financial recovery is available through a separate policy attached to homeowners or renters insurance.
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Homeowners Coverage
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The most common homeowners insurance is Homeowner-3, which covers losses from theft, fire, hail, lightning, smoke, explosions and other disasters. A standard homeowners policy covers precious stones and jewelry, with coverage limits falling in the $1,000-to-$2,000 range. This amount is cumulative, lumping together jewelry, furs and electronics for the purpose of a claim. To cover flood and earthquake damage, purchase separate insurance policies.
Renters Coverage
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Renters insurance is similar to homeowners insurance, the exception being that only the renter's contents are covered with a renters policy. Renters insurance does not cover the building; that coverage remains the responsibility of the structure's owner. As with homeowners insurance coverage, renters insurance covers the cumulative value of furs, jewelry and electronics for $1,000 to $2,000.
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Floater Policy
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To protect valuable diamonds, furs, electronics and jewelry, consider purchasing a floater policy or endorsement. These policies generally attach to homeowners or renters insurance, although some insurers may offer stand-alone coverage. Floater policies replace valuables at current value with proper documentation. Most floater policies or endorsements also cover mysterious disappearances, such as when a ring falls off a finger.
Acquiring Additional Insurance
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Contact the insurance company immediately after taking possession of the valuable object. Discuss the amount covered by the current policy. Submit copies of any receipts or appraisals to the insurance agent. Purchase a floater policy or endorsement equal to the new stone's worth. Before settling on a coverage figure for antique or heirloom stones, have the item appraised and cover the monetary value of the piece accordingly. File the original receipt or appraisal document in a safe place along with the inventory of household goods. Also include a photograph of the newly insured item.
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References
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- Photo Credit diamond image by sumos from Fotolia.com
