It's a Bling Thing: Jewellery Insurance Options

Finance Journalist · 9 November 2018
Whether it’s an expensive engagement ring, a luxury watch with a private engraving, or a necklace passed down through the generations, people who own jewellery can make a significant financial and emotional investment in their pieces.

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

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

Can your home and contents insurance cover your jewellery?

Most home and contents insurance policies will provide a limited level of cover for your jewellery if it is lost, accidentally damaged or stolen. If this cover is insufficient for the value of your jewellery, you may be able to apply for additional cover for specified or listed items, usually in exchange for an increased premium.

How much cover for your jewellery is available?

Your home and contents insurer will set a limit on the amount you can claim for an item of jewellery. This amount will vary depending on your policy, but may not always be enough to cover the cost of replacing the item. For example, if you had a $7,000 diamond ring stolen, you may only be covered for up to $1,000 for that item.

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 only be able to claim a total of $6,000, for example, on all of these items put together.

If you want to insure your jewellery for more than the general limits set out by your provider, you will need to take out additional insurance where you can specify the amount covered for each item. This extra benefit will typically increase the premium on your home and contents insurance.

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

Most standard home and contents insurance policies will not cover your jewellery if you want to wear it outside of your home.

If you want cover for this, 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, anywhere in Australia.

If your provider has this extra insurance on offer, you may be able to add it to your existing home and contents policy. However, per item and total limits on the amount you can claim for your jewellery may apply. If you need additional portable contents cover, consider checking if you can specify your jewellery items to cover their full value.

Is there standalone jewellery insurance?

There are options to purchase jewellery insurance separate to your home and contents, or contents only insurance.

This standalone insurance is designed to cover your jewellery against loss, theft and damage and is most commonly available from providers who are jewellery experts.

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

Jewellery Insurance
Some specialist jewellery insurers may offer free annual jewellery valuations as part of their policy. Source: Paksongpob Kasempisaisin (Shutterstock)

Additional benefits of this type of cover may include:

  • An agreed value policy

Specialist insurers may be more likely to provide agreed value cover, meaning 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 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.

  • Free annual revaluation

Under some policies, you may be able to have your jewellery revalued annually at no additional charge. This can help ensure your jewellery is insured at the right value.

  • 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, such as 12 months of cover.

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. 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, a family member or a person they live with.

  • Lost jewellery

Some insurers may not cover jewellery which has been mislaid or is missing and for which 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.

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?

As soon as you become aware of any loss or damage to your jewellery, it is important you advise your insurer and provide any evidence they require to assess your claim.

If you suspect your jewellery has been stolen, immediately notify the police so you can obtain a police report for claims purposes.

What evidence do you need when making a claim?

In order to make a claim of insurance for an item or items of jewellery, you will generally need to supply the following:

Proof of ownership

To prove an item or items of jewellery are owned by you or those listed on the insurance policy, you will need to provide receipts or other confirmations 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 your jewellery. 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 two years.

Police report for loss caused by theft

If you believe your jewellery has been stolen, contact the police and request a police report once the matter has been investigated. This report will need to be passed on to your insurer.

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 (which could be much lower than the insured amount).

Having evidence for your claim

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

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.

Cover Image Source: Africa Studio (Shutterstock)

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