So, you’re rockin’ the diamond. Flashing it to friends, feeling fabulous when you catch your frenemy eying it at a party. Now, the boring part sneaks in. A well-intentioned, conscientious friend asks,
“That beauty’s insured, right?”
You know you “should” insure it. That’s what conventional wisdom says, so it must be true.
Around here, we’re always questioning these so-called wisdoms and challenging the norms. So, we’re digging in to answer your big question:
Is diamond insurance worth it? Or, a waste of money?
The scenario:
You say, “yes!” to a stunning solitaire. It’s the diamond of your dreams: a round brilliant that’s GIA certified, VS1 Clarity, I Color, and Excellent Cut. You got a great deal (shopping through Rare Carat, of course) and paid $5,000.
The options:
1. Don’t Insure Your Diamond
In the event of theft, or loss, this leaves you with no ring and a $5,000 replacement cost.
In the event of damage, you’re paying out of pocket if your ring needs maintenance. (Think: loose prongs, bent band, or even cracked diamond!)
Cost: $0 yearly, but full replacement cost on your ring in the event of loss, theft or damage.
2. Include Diamond in Bundled Homeowners Coverage
In the event of theft, you’re covered… up to a certain limit. The limit is generally quite low (a few thousand dollars) but depends on the plan you choose.
In the event of loss, you’re on your own. Unless, of course, it’s lost in relation to one of the very specific instances listed in your coverage. These may include: volcanic eruption, explosions and smoke damage. If it’s not directly related to a scenario listed, you’ll likely be left diamond-less with no coverage, needing to fork out $5,000 to replace your beautiful gem.
When it comes to damage or wear and tear along the journey of life, you can get it covered - but your deductible will apply.
Cost: About $50 - 100 yearly + deductible
3. Insure Your Diamond with Jewelry-Specific Coverage
In the event of loss or theft, you’re covered. When it comes to jewelry specific coverage, it doesn’t matter where the incident happened, or why.
Zero deductible, which means you don’t need to come out of pocket to make the replacement happen.
Cost: About $50 yearly (for a $5,000 diamond, or 1% of value)
The synopsis:
- Choose to go uninsured, and you’ll be on the hook in the event of loss, theft or damage. Cost: $0
- Choose to bundle your diamond into your homeowners insurance and you’ll have coverage in certain circumstances, and you’ll owe a deductible when you file a claim. Cost: 1% of value, yearly + deductible
- Choose jewelry specific insurance and you’ll be covered, no matter what. Cost: 1% of value, yearly.
It’s your rock, insure it - or don’t - however you see fit. If you’d rather risk it, and are flush with cash to replace (or heck, upgrade) if something happens, more power to you! If, however, you’d like a little more security for a small yearly payment, and are okay with the potential limitations of your homeowners insurance and paying a deductible, bundling may be the right choice for you! Ultimately, we’re putting our vote in for jewelry specific coverage! You’ll pay the same (or less, in many cases) and get more coverage.
The Short Version: It would take 100 years, paying 1% off your ring’s value, for you to match the full price in insurance payments. Any claim made before 100 years, would prove insurance worthwhile.
Loss, theft or damage of your ring may break your heart, but it doesn’t have to break the bank, too!
Rare Carat Vote: This little nugget of conventional wisdom holds up. Ladies and gents: insure your diamonds!
No matter which direction you go, here are questions to ask as you consider diamond insurance:
Are accidental loss and theft covered?
If the ring is custom, is an exact replica covered?
If I lose my ring traveling, is it covered?
Do I need an appraisal?
Is there a deductible when I file a claim?
Do I receive cash in the event of a loss/theft?
Alright, we’ve answered your big (albeit boring) questions - you’re know in-the-know about the pros and cons of insuring your diamond, and a few options to make it happen if you so choose...
Now, go find the ring of your dreams!
