Investing in Forever? Consider Insurance

A nationwide survey of brides found that the average price of a sparkling new engagement ring was $5,978 in 2015.1 Sentimental value aside, an engagement ring may be one of the most expensive possessions a young couple owns.

Unfortunately, many young couples might not realize that their homeowners or renters insurance may not provide enough protection to replace a fine piece of jewelry that is lost or stolen. The personal property coverage in standard policies generally covers only certain incidents (damage or accidental loss are typically excluded), losses are often limited to between $1,000 and $2,000, and a claim may be subject to a high deductible.

If you have cherished jewelry or other valuable goods in your home, consider purchasing a separate personal property policy or adding a scheduled personal property endorsement or “floater” to your homeowners or renters policy. Unlike standard policies, this type of endorsement typically extends coverage for many potential mishaps including theft, accidental loss or damage, and unexplained disappearance.

So if your diamond engagement ring is lost in the ocean, a floater could help you recover the full replacement value (up to policy limits). Better yet, there is no deductible, or a relatively minimal one.

You can choose to insure a single item (a particular ring) or a class of luxury goods (all jewelry). Some other examples include silverware, computers, cameras, sporting goods, guns, musical instruments, fine art and antiques, coin or stamp collections, and other valuable collectibles.

To obtain a floater, you will need a detailed description or photo(s) of the items and a bill of sale, appraisal, or other documentation of their value. If you happen to own personal property whose current value exceeds the coverage offered in your current insurance policies, ask your insurance agent about the costs and benefits of additional coverage for those belongings. You may find it’s a relatively small price to pay for the added protection.