Jewellery insurance

It’s no surprise then, that when these prized possessions are lost, damaged or stolen, that it can cause significant distress to the owner. While there is no way to compensate for the emotional loss owners may feel, they can protect themselves financially.

When it comes to insuring these precious jewels, what options are available and what cover may best suit you?

How do I insure my jewellery?

There are different ways to insure jewellery against the risk of it being stolen, damaged or lost, whether that be from your home or when being worn or stored outside the home. Jewellery insurance could help policyholders pay for all, or some of its repair or replacement.

Insurance for jewellery can be purchased:

• As part of, or an added-extra to, a home and contents (or contents-only) insurance policy.

• From specialist jewellery insurance providers as a standalone policy.

Can your home and contents insurance cover your jewellery?

Yes, home and contents insurance can cover your jewellery. However, what is covered and how much you can claim typically depends on the type of policy and add-on extras you choose.

There are generally a few different ways of purchasing jewellery insurance through a home and contents insurance provider:

• Cover up to a certain value: Most home and contents insurance policies will cover jewellery up to a certain amount if it’s lost, accidentally damaged or stolen. Typically, this type of cover may only apply when the jewellery is located at your home. There is also typically a maximum amount that can be claimed (even if there are multiple items stolen, the limit could apply to all jewellery claims in total). As such, the insurer might not pay for the full value of what is lost or damaged if the value is above that claims limit.

• Cover for specific items: if you want to insure jewellery pieces individually (above and beyond their standard cover), some insurers offer the ability to apply for additional cover for a specific list of items in exchange for an increased premium. This may or may not cover the items when out of the home. This will often be a “sum insured” policy, meaning that it’s insured up to an amount agreed to by you and the insurer. This will be specified in your policy’s Product Disclosure Statement (PDS).

• Out-of-home claim cover: Some insurance policies will only cover claims for items if they were in the home at the time of the cause of the claim. To ensure coverage when the items are not in the home, some insurers offer “portable cover”, which could extend to covering specific items of jewellery. This is also likely to be a cost added to your premium.

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What cover is available for your jewellery with home and contents insurance?

How much jewellery cover is available depends on the home and contents insurance policy you choose and the value of the jewellery you’d like to include. Some insurers’ standard home and contents policies may include a set limit for what you claim when it comes to jewellery. As an example, some providers on Canstar’s database show a maximum total limit for jewellery of between $2,500 and $7,500, but this varies from insurer to insurer and generally can be increased as an extra if needed.

If you are insuring jewellery pieces individually, the amount each item is covered for may be determined by the provider, depending on a number of factors such as how much the item is worth, as well as how much you can afford to pay in premiums to cover it.

Is there stand-alone jewellery insurance?

There are options to purchase jewellery insurance separate to your home and contents, or contents-only insurance. This stand-alone insurance is designed to cover your jewellery against loss, theft and damage. It’s most commonly available from providers who specialise and are jewellery experts.

Policies on offer from specialist jewellery providers tend to carry a higher level of cover than what exists as a component of standard contents insurance, but the premium may cost you more.

What cover is available for your jewellery with stand-alone jewellery insurance?

The available coverage provided by stand-alone jewellery insurance will depend on factors such as your chosen specialist insurer, the conditions set in the policy’s PDS, the value of the items you want to insure, and the type of policy you buy.

These specialist jewellery insurance policies generally cover standard events such as theft, loss and damage, but additional benefits on offer for this type of cover may include:

• An agreed value policy: Specialist insurers may be more likely to provide agreed value cover. This means that they will pay the actual amount shown on your policy minus the excess if your jewellery is lost or stolen. This is in comparison with some insurers who may choose to replace your jewellery at the lowest ‘market value’ price they can buy it for.

• Repair and replacement at your original jeweller: Some specialist insurers may give you the option to return to your original jeweller for replacement or repair of your item or items.

• Worldwide cover: Some specialist insurers may cover you if your jewellery is lost, damaged or stolen whilst you travel worldwide. This benefit may only apply for a certain period of time under some policies.

These additional benefits can be standard to a policy or an optional add-on expense, depending on the provider.

What do I need to know when looking for a jewellery insurance policy?

Before looking for a policy, it’s a good idea to know:

• Exactly what jewellery you would like to cover.

• Where you’d like it covered (only at home, away from home or while travelling overseas).

• How much it would cost to replace.

• If there are any pieces you’d like to insure as an individual item (such as a sentimental or high dollar-value item).

• What is covered already in your home and contents, or contents-only, policy (if you have one).

• How much of an excess you’d be prepared to pay if you had to make a claim.

• How much you can afford to pay for insurance premiums.

Some insurers may request that certain items be valued by a professional if you do not already have an official valuation certificate. This valuation is usually paid for by the owner of the jewellery, however, some insurers may cover the cost. It could also be a good idea to take photographs of your jewellery, and where it is stored, in case you need to make a claim in the future.

When you have a shortlist of insurers you would like to approach for a quote, it could be useful to familiarise yourself with some of the finer details of their cover. These will be listed in the insurer’s Product Disclosure Statement (PDS) and is usually provided to you when you take out the policy.

As a general rule, it’s a good idea to read the PDS carefully whenever you’re considering a new policy to take on, or if you intend to make a claim. If you’re unsure, contact the insurer directly for more information.

When it comes to home and content insurance, or contents-only insurance, an insurer could specify in its PDS, a limit on the amount you can claim for a jewellery item. This could mean there could not always be enough to cover the cost of replacing an item.

For example, if you had a $7,000 diamond ring stolen you may only be covered for up to $1,000. Some insurers may also put a total limit on the amount you can claim for multiple pieces or sets of jewellery. So if your watch, necklace and rings were all damaged in a fire, you may, for example, only be able to claim a total of $5,000 on all of these items put together.

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Can I get insurance for when I wear my jewellery away from home?

Home and contents insurance:

Most standard home and contents insurance policies will not cover your jewellery if you want to wear it outside of your home, which can make it tricky if you’re looking to insure items such as an engagement ring. If you want cover for this added to your policy, you will need to see if your provider offers portable contents insurance, also known as personal effects insurance. This type of insurance can help cover accidental loss or damage to your jewellery when you are away from your home.

If your provider offers this extra insurance, you may be able to add it to your existing home and contents policy. But be aware that per item limits and total limits may apply on the amount you can claim for your jewellery.

If you need additional portable contents cover, consider checking if you can specify your jewellery items to cover their full value, and check the geographical area of coverage — is it covered only in Australia or also overseas?

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Jewellery insurance:

Stand-alone jewellery insurance policies also typically offer the choice of cover for items while outside the home, subject to any exclusions that are specified on the policy. This varies between providers. Check their PDS to find out what level of cover is on offer.

What’s not covered by jewellery insurance?

Exclusions for your jewellery insurance will depend on the type and level of cover you choose, and whether you take out cover with a specialist insurer or through your home and contents policy (by checking the PDS).

However, there are some common exclusions across policies which may apply. These can include:

• General wear and tear of the jewellery: Most insurers will not cover loss caused by wear and tear, gradual deterioration, rust, corrosion, or bacteria.

• Inherent defects and mechanical failure in the jewellery: Insurers may not cover loss caused by structural defects, faulty design, poor workmanship or mechanical failure in the jewellery.

• Lawful confiscation: Insurers generally will not cover the confiscation, destruction or seizure of your jewellery by any government or public authority.

• Illegal ownership: Insurers will not cover jewellery which has been acquired illegally or is illegally held.

• Intentional acts: Most insurers will refuse claims arising from loss caused intentionally by a person named in the policy, that person’s spouse, partner, family member or a person they live with.

• Lost jewellery: Some insurers may not cover jewellery which has been misplaced or gone missing and there is no single identifiable event to account for the disappearance. This exclusion may not apply to jewellery insured under portable contents or specialist jewellery insurance.

• Items not defined as jewellery: Some insurers may not cover items such as unset gemstones. Definitions, including inclusions and exclusions, will be outlined in the provider’s PDS.

There may also be exclusions surrounding loss due to theft. These may relate to the security of your home at the time your jewellery was stolen, and if you fail to report the theft to the police.

What to do when making a claim?

If you suspect your jewellery has been stolen, immediately notify the police. This will also help when it comes to making a claim, as you will be able to obtain a police report.

When you become aware of any loss or damage to your jewellery, it is important you contact your insurer as soon as you can. The insurer should let you know what they need in order to assess your claim. This may include providing certain pieces of evidence, such as a description of what occurred, including the time, date and location of the incident.

What evidence do you need when making a jewellery insurance claim?

Insurers may request a range of information or documents when you make a jewellery insurance claim, according to their claims assessment processes (which differ between insurers). In order to make a claim of insurance for an item or items of jewellery, you will generally be asked to supply the following:

Proof of ownership

To prove an item or items of jewellery are owned by you and are those listed on the insurance policy, you will need to provide receipts or other confirmation of purchase. Some insurers may also require photographic evidence of your jewellery in your home.

Proof of value

A jewellery valuation certificate is a document that describes an item of jewellery in detail and also states the value of the item in question. This evidence is needed when you take out insurance which specifies the value of each piece of jewellery.
Some jewellers may charge a fee for producing a valuation certificate upon purchase of a jewellery piece. For pre-owned jewellery, consider using a registered valuer or one with appropriate qualifications for assessing jewellery.
Some insurers recommend you update your jewellery valuations every few years to ensure it reflects the changing value of precious stones and rare metals.

Police report for loss caused by theft

If you believe your jewellery has been stolen, contact the police, make a police report and request a copy for your records. This report will need to be passed on to your insurer if you’re making a claim under the event of a theft.

What to consider when insuring your jewellery

When researching options to insure your jewellery, consider the following:

Limits on maximum benefits

Look closely at the per item and total limits on the amount your insurer is willing to pay. These limits may not provide sufficient cover for the value of your jewellery. In this case, you may want to look at specifying particular items of jewellery so you can get cover for their full value.

Replacement procedures

Check with your insurer about their procedures for providing replacement jewellery in the event of a total loss. Some insurers have a large network of jewellers they have agreements with who can provide them access to substantial discounts if they get the replacement done in-house.

So, for example, an insurer may be able to replace a piece of jewellery valued at $10,000 for $5,000 by using their discount agreement. This could leave the consumer with the option of accepting the lower-cost replacement, or taking a cash settlement.

Having evidence for your claim

Ask your insurer what proof you may need for making a claim, such as receipts, valuations or photographs of your jewellery at home.

Read the fine print and compare options

Before making any commitments, make sure to read the Product Disclosure Statement of the insurance policy, and check the list of general exclusions and any excess which may apply.

To find jewellery insurance which meets your needs and budget, consider comparing your options and asking insurers for information which may help inform your decision. You may also need to assess the pros and cons of insuring your jewellery under your home and contents insurance or covering it with specialist jewellery insurance.

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Cover image source: Kristina Holovach/Shutterstock.com