Contrary to the popular phrase, and title of the 1971 James Bond film, diamonds are not always forever. Jewelry boxes are often the first stop for thieves, and with the hustle and bustle of life, our precious gems can even be lost or misplaced. Insurance companies can’t place a value on sentimental property, but they can make sure your items are financially protected should it be lost or stolen.
Case in point, a Thome Insurance customer lost a diamond out of a ring a few years ago. Luckily, their diamond was insured.
As stated in a related article from Kiplinger, most policies also place limits on specific kinds of items — promising to pay a maximum of, say, $1,500 to $2,500 for all of your jewelry in the event of damage or theft. Other categories that usually have reimbursement limits include silver flatware, firearms, coins, stamps, and furs. (Read the “contents and additional coverage” section of your policy for the details.) Accidental loss is generally not covered. So if you lose your engagement ring, you’re out of luck.
This ring was insured through Erie Insurance for $8,000 on a Personal Inland Marine Policy, which is an additional policy rider that covers jewelry or other specific property. Though the customer was expecting the insurance to pay out the full $8,000, at the time there was a condition in the Loss Settlement section of the policy which stated that the payment would be limited to the lesser of four possible amounts. In the end, a replacement diamond was found with the same carat, cut and color for $6,500, and $250 was allowed for the diamond to be remounted in the ring.
The good news is this policy changed last year – Erie will now pay the agreed value. This means if your property damage is not excluded, you will be paid either the cost of repairing the item, or the full value the property is insured for.
This is an important reminder to thoroughly read your insurance policy and ask questions about the coverage before you make decisions. This is especially important when you’re already devastated by the loss of your property, and expecting to get more money than your policy allows. Talk with your insurance agent about additional riders that will cover specific property or valuables.