Does my home insurance cover my engagement ring?

Engagement ring.jpg

According to businessinsider.com, the average amount spent on an engagement ring in Michigan is $7,028, which is the 19th highest cost across the U.S. Having so much money invested in a single item is often cause for concern. Thankfully, all homeowners insurance policies provide coverage for personal property, like clothes, furniture, and electronics. But does this coverage also apply to a $7,000 engagement ring?

Most homeowners policies provide coverage for jewelry. However, they usually include a coverage limitation of $1,000 for unlisted jewelry claimed due to theft, which is significantly less than the average cost of an engagement ring. Additionally, like most homeowners claims, the policy’s deductible applies to a claim for unlisted jewelry, thereby reducing the claim payment by the deductible amount.

For example, a stolen $7,000 engagement ring is subject first to the homeowners insurance deductible, which is commonly $1,000, and second to the jewelry overage limitation, which typically is also $1,000. Generally the deductible, the coverage limitation, or both will drastically reduce the amount of the claim. In this example, the claim payment would be calculated as:

  • Ring value: $7,000

  • Deductible: ($1,000)

  • Gross Claim: $6,000

  • Policy Limit: $1,000

  • Net Claim: $1,000

So how do you adequately cover your $7,000 engagement ring? List it on your homeowners policy. Doing so will provide three critical benefits: (1) your ring will be covered for its replacement value (instead of only $1,000), (2) your homeowners insurance deductible will be waived in a claim, and (3) your ring will be covered for much more than theft, including simply losing it.

This generally includes explicitly listing the item’s description and value on the policy, which are typically assessed and verified through an appraisal. Although some insurance companies do not require the submission of an appraisal when adding jewelry items to a policy, it is important, and recommended, to obtain an appraisal to prove ownership and to have an accurate description of the item if a claim arises.

The cost of scheduling an engagement ring on a homeowners policy is dependent on the ring’s value, but it is generally about $10 per $1,000 of value, which is usually worth the investment in the long run.

This article was written by Brian Boer and Tori Roughley. Please send any questions or comments to Tori at victoria.roughley@boerinsurance.com.