Is your valuable jewelry covered in your homeowners policy?

How often do you look at your homeowners’ insurance policy and wonder if your standard jewelry coverage would replace the important and valuable jewelry you have in your home?

Probably not often. But you could be underinsured. If you have a lot of jewelry or a few expensive pieces, get them appraised and get them insured if the value of the total exceeds the basic jewelry limit on your homeowners policy.

Most homeowners’ policies generally cover only about $1500-$2000 in jewelry replacement – which may not even cover an engagement ring at today’s prices. In addition, the coverage is usually for instances where the jewelry is stolen or destroyed in a fire or other event such as a tornado. That does not include coverage for other ways you can lose or damage jewelry in your home such as dropping it down the drain or hitting and cracking a stone while cleaning behind the stove. So, what should you do when you look at your homeowner’s policy and see that line item for jewelry reimbursement is low?

First, you should get your jewelry appraised for replacement value and then, based on its value, you may want to add a Personal Articles Floater to your policy to provide the insurance needed. Also consider a jewelry policy if you have a few pieces that are very important to you and you'd want to replace them if something should happen.

Van McMinn, a Nashville jewelry appraiser, certified member of the National Association of Jewelry Appraisers and a GIA trained Graduate Gemologist, works with homeowners to provide appraisals they can use to get the proper coverage on their jewelry. His process is unique, and he likes to do the work in-person with the owner present as he evaluates their pieces. McMinn said insurance companies want more data on jewelry than a single line stating a “solitaire diamond on a gold band” for example.

“The insurance industry is requiring more information and they want more data rather than a one-line description, especially when they have to pay a claim,” McMinn said. His advice is to get an appraisal that includes a cover letter explaining the appraisal process and what was reviewed. The actual appraisal document should include detailed descriptions of all pieces including measurements, diagrams of elaborate settings and values based on comparable pieces at current market value when possible. (Some antique jewelry or unique pieces – like a celebrity’s class ring, which McMinn recently appraised – may not have a comparable market value.)

Even if you think you don’t have a ton of valuable jewelry, you may have more than you think, especially if you have a few good pieces that have appreciated in value over time. McMinn said the value of gold and platinum, in particular, have helped jewelry appreciate over the last 10-20 years. But he would not recommend waiting that long to have your pieces appraised.

“I would say gold values could change every five years – depending upon the economy,” he said. “If your appraisal is 20 years old, it’s way out of date.”

Other than the value of precious metals such as gold and platinum, McMinn said engagement rings and other pieces with gemstones could appreciate with diamonds and sapphires being the highest valued stones followed by ruby and emerald. Japanese akoya pearls are more valuable than freshwater pearls but some of the most valuable items homeowners have are luxury watches.