Do I Need Diamond Ring Insurance?

If you have to ask whether or not you need diamond ring insurance you probably do. There’s something nagging you in the back of your mind saying “this thing’s just too darn valuable to have it stolen or misplaced!” And you’re right. While you should never look upon your diamond jewelry as an investment, there’s no harm in being smart about covering things you’re spending a fair amount of cash on, and diamond ring insurance can go a long way toward easing your concerns. There are a few things to consider, however.

Diamond ring insurance is usually found as a rider to most homeowners or renters insurance policies, at least in the US. Many insurance companies won’t bother, but most of the larger ones will. There are basically three types of diamond ring insurance: Actual Cash Value, Replacement Value, and Agreed Value. Actual cash value replaces the ring at current market rates, either higher or lower than you paid for it. This coverage is rather rare. Another rare form of coverage but the most desirable, is Agreed Value. This is where you and the insurance company agree on the value, and that is the amount you are compensated in the event of a loss. The most common type, and the policy that most people are sold is Replacement Value. This is where the insurance company replaces your ring at the lowest cost they can negotiate. This is sometimes much less than the amount the ring is insured for. This is an area to be careful. Always insist on an independent appraisal, as you don’t want to be paying premiums for a ring appraised at $15,000, and then have it replaced for $3000.