Some things are worth more than the money spent to purchase them. If your diamond ring has great sentimental or emotional value, no insurance policy can address that if you lose it. The right insurance policy can at least reimburse you for its cost, however. The operative word is "right." If you rely solely on your existing homeowners policy, you might be out of luck if you're hoping to recoup your ring's full value.
Homeowners insurance typically reimburses you for the value of the contents of your home in relation to the total amount of coverage you've purchased. For example, if you have $250,000 in coverage, and if your insurance company sets a 50 percent limit on the value of your personal property, you'll receive compensation of $125,000 for everything in your home if it's destroyed. This might cover your diamond ring and then some – but only until you start adding in the loss of your furniture, electronics, appliances, and other valuables. Policies often pay a little extra for items of jewelry, but this is typically limited to no more than $2,500 for all your jewelry collectively – not just your diamond ring. Additionally, these rules usually only apply if you've specifically taken out coverage for the contents of your home. This generally involves a slightly higher premium.
If you want to protect your diamond ring for something closer to its value, you can purchase a rider or supplemental coverage. These policy provisions piggyback on your existing homeowners policy. Assuming your ring is worth more than the $2,500 you might receive for all your jewelry in the event of a disaster, a rider might be worth the added expense, although riders can be costly. Limits usually exist for riders and supplemental coverage as well. Your insurance company might cap such losses at $10,000, so if your ring is worth $12,500, you won't receive all its value.
A rider usually has an additional advantage, even if it doesn't cover the full cost of your ring. Homeowners policies typically only cover losses when your home is robbed or if some other disaster befalls it. If you lose your ring or if it's stolen from someplace other than your home, your insurance company will probably refuse to compensate you unless you've purchased additional coverage.
You're not limited to supplemental coverage under your homeowners insurance to protect your ring. If your insurer's provisions don't meet your needs, or if your jewelry exceeds the company's limit for extra coverage, you can take out a separate policy, one just for your ring and other similar valuables. These policies often cover new items you purchase for a limited period of time, even if you don't report the acquisition to your insurance company immediately – such as if you decide to purchase wedding bands to go with the diamond ring.
If you purchase a rider or separate policy for your ring, you'll probably have to substantiate its value. In some cases, the receipt will suffice, but it must give some detail about the ring. Otherwise, you could use the receipt for any other item of jewelry, and this is exactly what your insurance company wants to prevent. Some companies require appraisals, and the appraisal should be relatively recent, such as no more than three years old.
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