Insuring jewelry? Some options to consider

Insurance losses related to jewelry are huge — much more than many people realize. According to Department of Justice statistics, 70 percent of all personal property losses are jewelry. Insurance companies process billions of dollars in jewelry losses each year. Some of these jewelry losses are hidden, because they’re reported as “content” losses under a homeowners policy, rather than as jewelry.

So what? Jewelry claims usually fall below the radar of concern because the cost of the settlement is comparatively small. But if that jewelry is on a homeowners policy, the impact of the claim can be serious.

Unlike most household contents covered in a homeowners policy, jewelry is small, valuable and very vulnerable. Jewelry is not only stored in the home, it also travels. It’s put on and usually forgotten as we go about our business, taken off and left on dresser or sink, regularly exposed to damage and loss. At home or out on the town, jewelry is a magnet for theft and it’s particularly prone to “mysterious disappearance.”

If that lost or stolen jewelry is on a homeowners policy, it counts as a homeowners loss.

Homeowner policies with losses are much harder to place with another carrier. Agents already face shrinking sources for homeowners policies, as insurers seek to protect themselves from disasters such as hurricanes, tornados, forest fires and hail storms. Prior losses make placing a homeowner policy all the more difficult.

“Mysterious disappearance” claims in particular can kill remarketing policies. These unexplained losses are major red flags.

In addition, homeowner carriers usually have restrictions and capacity limitations for jewelry. Many carriers are not willing to write higher-value jewelry. It can be difficult to find a policy that adequately covers jewelry and also offers the consumer a competitive price.

A stand-alone jewelry policy addresses the jewelry need without impacting the homeowners policy. You can obtain your homeowners policy at the best price, then purchase a standalone policy for jewelry either from the same carrier or through a company specializing in personal jewelry coverage. Standalone policies may offer higher limits.

Far from being more costly, this solution means savings to you, the insured. Standalone jewelry policies are quite competitive in price, and some insurers offer premium discounts not available on homeowner coverage. In the event of a jewelry loss, the homeowner policy and the client’s claim-free status are not affected.

A word of caution: Not all standalone jewelry policies offer a cash settlement option. Instead, some carriers offer only repair-or-replace settlements.

Alden Weichel, owner of Bradenton Insurance, can be reached at (941) 748-0511.