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Choosing the best diamond insurance

Updated on March 23, 2010

A diamond is one of the biggest investments you may ever make and it is smart to consider insuring your purchase with a diamond insurance policy. Most homeowner's and renter's insurance will not reimburse more than $1000 if jewelry or diamonds are stolen from your home.

Your best bet is to buy a diamond insurance policy from a specialized jewelry insurer. The two biggest jewelry insurance companies are Jeweler's Mutual and Chubb. Both are very well known and respected in the insurance industry.

Jewelry Insurance Policies

When shopping for diamond insurance you may encounter 3 different types of policies:

  • Actual cash value insurance policy - In the event of loss or theft, you are reimbursed at the current market value of the diamond or jewelry, less sales tax and any fees involved.
  • Agreed value insurance policy - It is unlikely that you will see this type of policy being offered. The insurance company will attempt to negotiate a payout amount with you.
  • Replacement value - This is the most common type of jewelry insurance policy, you will come across it when looking for insurance. You and the insurance company will agree on an amount to replace the lost jewelry. Be sure you have an appraisal ready.

Diamond and Jewelry Appraisal

Before you approach an insurance company about purchasing diamond insurance, make sure you've had a qualified appraiser examine your jewelry and give you a report. Insurance companies will offer their own appraiser but I would caution you not to use them. Many insurance companies write appraisals that work in their favor. For the sake of fairness, it's worth an extra fee to have your diamond appraised by a qualified independent appraiser.

Ask potential insurers if you will need to have the jewelry re-appraised every couple of years to make the policy match current market value. The cost of diamonds, gold, and silver is constantly fluctuating and may gain or lose value over time.

Choosing a Diamond Insurer

Before you sign on the dotted line make sure to read all of the fine print. Some policies will only replace jewelry with items of a "similar value" while others will reimburse you in cash. It is up to you how you want to be reimbursed. Here are some questions to ask your insurance company before committing to a jewelry insurance policy:

  • Does this policy cover repairs of any potential damage to my jewelry?
  • Will I be covered if my jewelry is lost or stolen when traveling overseas or in another country?
  • In the event of loss or theft, will I be reimbursed in cash or will you simply replace the jewelry for me?

While you may not plan on losing your jewelry, accidents happen. Diamond insurance is costly but offers peace of mind should the unthinkable occur.

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