Clients Ask: How Do I Protect My Jewelry Collection?
Whether discovered in a tiny shop on an unmarked street or accepted during a bended-knee proposal, few possessions mean as much as our favorite pieces of jewelry. When you show off that antique gemstone you feel the pulse of its story. When you select that jeweled necklace you feel the draw of the beauty and the value of its emeralds. But you may feel something else, too: a tinge of fear, because you know that this small, precious object can exit your life as easily as it appeared. At Alliant Private Client, we have worked with the owners of some of the world’s most storied pieces of jewelry for decades, learning a great deal along the way about how to keep them safe. Here, we answer the questions we receive most often from clients about protecting and insuring fine jewelry.
What are the greatest risks to my jewelry? Fine jewelry is all the more glamorous because it travels light. Unfortunately, that makes it a prime candidate for loss—what the insurance industry calls a “mysterious disappearance.” An earring silently slips off into the grass as you stroll through the park. You leave a ring on a restaurant’s restroom sink. That necklace you packed for your vacation? When you are back home you can’t find it anywhere. Loss, in fact, happens much more often than theft and is the greatest risk when owning such valued jewelry. Still, there is always the threat that a crafty pro is plotting to sneak into your residence, crack your safe and leave with your treasures. More likely, though, if your diamond bracelet is taken, it will be by someone with access to your home, such as a housekeeper or contractor, and more likely to occur in a city apartment than a country estate.
I’d rather my jewelry not undergo a “mysterious disappearance.” What can I do? Before you leave the house, check the jewelry you are planning to wear for loose or weak links or clasps, and leave it behind if it has either. To be safe, you may want to consider asking a jeweler to add screw-on backs to your earrings and safety clasps to your bracelets. Similarly, keep an eye out for dents and damage on rings, and get them repaired right away; once a setting is compromised, the gem it holds can pop out at any time.
How do I shield my jewelry from theft? You should start, of course, by investing in state-of-the-art locks, alarms and built-in safes. But you also need to accept that such precautions won’t necessarily dissuade uninvited strangers. You may not want to think in these terms, but everybody you welcome into your home is a potential threat— housekeepers, nannies and plumbers, but also your children’s friends and dinner party guests. Don’t tempt any of them by leaving jewelry out in the open. If you don’t store it all in a safe, at the very least tuck it away in a drawer.
What can I do to travel safely with my jewelry? As much as you can, keep it close—on your body or in a handbag you carry with you. Never check a bag or garment in which you are carrying jewelry, whether at the airport or in a restaurant coat room. If you are traveling by car, don’t keep such valuables in the trunk, glove compartment or backseat; all are too easy to access (and jewelry kept in such places is too easily forgotten). We also don’t recommend trusting the room safe at the hotel. It is better to use the hotel’s main safe instead.
Is lost or stolen jewelry covered by my homeowners insurance? Probably not. A typical homeowners policy covers only a small amount of jewelry—often $10,000—after the deductible is met. Most don’t cover mysterious disappearance at all. You may be able to add broader coverage and higher limits to your policy, but you can also purchase a separate policy that covers valuable items like jewelry, art and the other precious collectibles.
Why would I want a blanket limit on my jewelry? It is easier… at least until you have to make a claim. You don’t need to notify the insurance carrier each time that special someone gives you a new token of their love. But should something happen to it, you will be very glad if you remembered to keep the bill of sale or an appraisal you can use to establish its value. As your jewelry box fills, you will also need to note when the total value of your entire collection—or the value of an individual item—exceeds the limits of a policy. Though you are not required to, we strongly advise that you notify your broker or carrier of any new jewelry purchases of significance.
Do I need to insure the total value of all of the jewelry I own? If you would like to be compensated accordingly if all is lost or stolen, we recommend that you do. One reason to choose blanket coverage is to insure only a portion of a collection’s total value, possibly to reduce the premium expense. For example, a family that keeps half of a $200,000 jewelry collection in their apartment in the city and half at their country house might choose to purchase a $100,000 blanket policy that would cover theft or damage to items at either location, but not to both. They would simply need to accept the extremely unlikely risk that two thefts will take place simultaneously at each of their residences.
How do I make sure I have the right amount of coverage? The best way is to undergo regular appraisals and adjust your policy accordingly. If you have blanket coverage, pay special attention to items that may exceed the per-item limit, if there is one. Some policies also apply an automatic annual inflation adjustment, increasing the overall coverage limit and the schedule values by a set amount each year. This can protect you in the case of a loss of an item that had not been recently appraised. That said, the adjustment is a fixed percentage that is unrelated to the jewelry’s actual value. After a couple of years, you may well be either underinsured or paying for coverage you don’t need.
Will I have to tell the insurance carrier every time I buy a piece of jewelry? That is your choice. A blanket policy will cover all items you own up to a certain limit. You can also list (or “schedule”) each object you own and its value. Or you can use a combination of the two coverages, scheduling greater valued items and using blanket protection for the rest. It is always best to talk with your broker and get their recommendation based on your collection.
What is the advantage of “scheduling” all of my jewelry? Claims generally go much smoother because you have already proven to the insurance carrier what you own and have agreed on its value. [Caveat: If you fail to report an item within a certain grace period, it won’t be covered.] Scheduling may seem like extra work, but some people actually like being encouraged to keep an organized inventory of their collections, even if you choose blanket coverage for the rest of your collection.
If some of my jewelry is lost or stolen, what amount is used for the claim settlement? With a blanket policy, you’ll receive what the insurance carrier determines is the current market value of the item, up to the per-item and total policy limit. With a scheduled policy, you will get whichever is higher, either the scheduled amount or the market value. The market value is determined at the time of loss or the value immediately before the loss occurs. Considering the volatility of gem and precious-metal prices, we advise clients to get their jewelry appraised every three to five years.
I have pieces that are rarely worn. Can I reduce my premium cost? Yes. Keep them in a bank vault, and you will probably see a significant premium relief. You will still be allowed to wear them a limited number of times each year. But you will need to notify the carrier in advance and you will need to return the pieces to their safe place within a set time. This may all sound a bit involved, but there are a few key takeaways to keep in mind. First, keep an eye on your valuables, and don’t leave them anywhere they are vulnerable to loss or theft. And second, build an ongoing relationship with an experienced insurance broker to make sure your coverage continues to fit your collection and lifestyle. Take those steps and you can enjoy the beauty of your jewelry without a tinge of fear.
alliantprivateclient.com 800 221 5830
Š Alliant Insurance Services, Inc. All rights reserved. CA License No. 0C36861.