Jewelry Insurance vs. Homeowners Insurance: Which Do You Need?

Don’t just assume that a standard home insurance policy takes care of everything.

Expensive jewelry can be a great gift for heirs or a way to spice up a formal outfit, but their small size and high price make jewelry a favorite target for thieves. Many people think that their homeowners insurance will cover any kind of jewelry loss or theft, but that’s not always the case.

Below, we’ll look at what coverage a standard homeowners insurance policy provides for jewelry, and how that stacks up with standalone jewelry insurance.

What coverage does standard homeowners insurance provide for jewelry?

A typical homeowner’s insurance policy protects jewelry against covered perils, including home fires, storm damage, and theft. But most policies impose a $1,500 cap on jewelry payouts. This may not be enough for those who have expensive watches or heirloom jewelry worth thousands or tens of thousands of dollars.

And in reality, the payout the homeowner would receive in the case of a jewelry claim would be less than $1,500 because the homeowner would have to pay some of the costs as a deductible. If the deductible is $1,000, the homeowner will only receive a $500 check for their lost or stolen jewelry, even if the item’s actual value is $20,000.

It’s also worth noting that a typical homeowners insurance policy doesn’t cover things like normal wear and tear or accidental loss or damage. Dropping an expensive ring down the sink or losing it in the ocean will leave the policyholder on the hook for the full cost of replacement.

It can also increase homeowners insurance premiums in the future, just like filing a claim for any type of storm damage. So it’s not the best for those who want full coverage jewelry.

What coverage does a floating personal item of jewelry provide?

Some home insurance companies allow homeowners to add personal information on articles to their homeowners insurance policy. This increases the cap on how much the insurer will pay for jewelry that is lost due to a covered peril or stolen. It may also expand the circumstances in which a loss is covered. For example, personal effects insurance may cover jewelry that is accidentally lost, whereas a traditional homeowners insurance policy would not.

The benefit of purchasing one of these policies is convenience. Homeowners can manage their jewelry and home insurance coverage in one place and won’t have to worry about juggling multiple deductibles. In fact, they may not pay a deductible at all for jewelry-related losses.

But insurers often require those who add personal items to their policy to have each piece appraised to get an accurate estimate of its condition and value. Homeowners will likely have to pay for it out of pocket.

What coverage does a standalone jewelry insurance policy provide?

Standalone jewelry insurance policies are policies that specifically cover jewelry. These are usually covered by specialist insurers.

These policies tend to be more flexible than traditional homeowners insurance. They can cover jewelery up to much higher limits and it’s often possible to get cover for accidental loss or even things like a broken necklace clasp. And since this policy is not tied to homeowners insurance, there is no risk of a claim raising premiums during the next policy period.

Jewelry insurance costs vary depending on the number of items insured and their value. One popular insurer, Jewelers Mutual, charges 1% to 2% of the value of the jewelry per year. So a $1,000 item will cost about $10 to $20 a year to insure. There’s also a no-deductible option for those who don’t want to pay anything out of pocket in the event of a claim.

Compare all options

It doesn’t hurt to research a few of the options above before making a purchase. Just be sure to read the fine print and contact the insurer for clarification if necessary. And don’t forget to update the rules as you add more jewelry to the household collection.