In the joy and excitement following your proposal and new status as a fiancée, there are a few less romantic details that will crop up. Protecting your assets is a practical step to take into consideration, and no, we’re not talking about a prenup. As with any high value possession, your sparkling new engagement ring is definitely something worth insuring, giving you peace of mind that it’s covered in the unfortunate event of damage, loss or theft.
Arranging insurance cover sooner rather than later will allow you to continue celebrating this moment and move onto the fun stuff – planning your dream wedding.
If you’re reading this before even buying an engagement ring, you’re ahead of the game. Insurance can be taken out as soon as you’ve purchased a loose diamond, prior to having it set by a bench jeweller. This can be a good idea, as the setting process itself can pose a risk of damage to the stone, more so if the diamond is of a lower grade.
Whether you purchased your diamond engagement ring online or in store, if the ring is brand new, custom made or a vintage heirloom, a ring appraisal will be needed to identify its true value. A certified gemmologist will be able to appraise your ring and provide documentation for you to use when obtaining an insurance quote and proving your ownership of the ring. Our guide to arranging a ring appraisal will help shed more light on this process.
When it comes to choosing a policy, you will have two options; an extension (or ‘rider’) on your homeowner’s policy or to opt for a jewellery specific insurer.
An extension on your homeowner’s insurance policy:
This could also fall under renters or contents insurance. An extension can cover the loss of specific listed items up to a certain amount. Policies will vary so ask your insurance company for details on engagement ring coverage. Some may only cover you for losses like a burglary or theft, so partial damage to your ring may not always be included.
A specialist jewellery insurance company may well offer more comprehensive coverage options than your homeowners policy, including the option to recreate a lost item or repair a damaged ring rather than offering a lump cash sum.
With jewellery or diamond insurance, it can generally be categorised by 3 types; agreed value, actual cash value and replacement value. In the event that you do need to claim, your budget when seeking the perfect match from all the engagement rings in Australia, will be be determined by which policy you select.
An actual cash value option will take the current market value when working out the reimbursement value, regardless of your rings original price when purchased.
An agreed value policy is the value that your diamond is worth and the amount you’ll be reimbursed in the event of a loss or theft. This amount is agreed between you and your insurance company at the time of signing your policy.
A replacement value option will offer you a certain amount of money which you can use to replace your ring with a new one. Although replacement value policies are most popular, it’s worth baring in mind that the insurer can pay you less than what is stipulated in your policy if they find a good replacement deal.
The cost you pay for coverage will depend on the type of policy you opt for, factoring in the value of the ring, theft rates in your area and if your policy has a deductible. Be sure to clarify important details and ask questions such as:
- What will you need to provide proof of a lost ring?
- Are any circumstances not covered? E.g. if you’re out of the country.
- Will they cover your ring against damage as well as loss/theft?
- What alternatives are offered if a suitable replacement can’t be found?
- Does the policy adjust in line with inflation?
- Who chooses where a replacement ring is purchased or repaired?
Consider each option carefully before deciding which policy suits you, and be sure to gain impartial advice, avoiding conflicts of interest by following recommendations from your insurance company.
Contact our certified gemmologist for guidance on getting a fair and uncompromised valuation for your jewellery.
AWDB specialises in custom and wholesale diamond engagement rings in Melbourne. If you’ve lost a sentimental ring and need to arrange a replacement, explore our custom design service and start the process of recreating your diamond engagement ring online here.