If you're like many people, you have at least one ring that you wear regularly that has significant value -- like an engagement ring, wedding set, or an inherited piece. It's important to carry insurance on a ring like that because you never know when the ring could somehow slip from your finger, be lost to a mugger, or stolen right out of your jewelry box!
To properly insurer your ring, there are a few things that you need to know about how jewelry insurance works and about how to get the right appraisal for your ring.
The Right Insurance For Your Ring Is Essential
There are two basic types of insurance where jewelry is concerned: actual cash value and replacement cost. The difference between the two can be absolutely huge. Actual cash value insurance pays you only the replacement value of the ring minus any depreciation. On the other hand, replacement cost insurance pays you the actual dollar amount you need to replace the ring (subject to the maximum payout on your policy).
Because jewelry prices go up and down all the time, the actual cash value of your ring could be more or less than what you actually paid for it -- but there's no guarantee that your insurance will be enough to replace the ring. Generally speaking, replacement value insurance usually offers better value -- and a higher payment if the ring is lost or stolen.
The Right Appraisal For Your Ring Is Critical To A Fair Insurance Payment
Most people mistakenly believe that the receipt they were given when they purchased an expensive piece, like a diamond engagement rings, provides enough proof for the insurance company to go on if the ring is lost, stolen, or destroyed.
Not so. Receipts generally don't have the detailed information about a piece to guarantee that you get a fair settlement from the insurance company. For that, you need an actual jewelry appraisal. Ideally, you should probably have one done on a valuable piece every couple of years, given both the volatile nature of the jewelry market and the possibility of wear-and-tear on the piece. (An appraisal can also alert you to any damage on the ring that needs to be repaired, like a broken prong or loose stone. That way, you can preserve the value of the piece for the future.)
A good appraisal will provide you (and your insurance company) with a detailed description of the ring, information about the metal quality of the setting (whether it's 12K, 14K, or higher), details about the stone (including it's cut, color, clarity, and carat weight), and its value. Obviously, the more recent the appraisal, the better its accuracy when it comes to value.
If you've been putting off a ring appraisal, don't delay it any longer. Otherwise, you may be paying that insurance policy for nothing.