Risk vs. Reward: Exploring the True Cost of Jewelry Insurance

Diamond jewelry is a pricey investment, but replacing it the event it becomes lost, damaged, or stolen doesn't have to be.

Jewelry. It’s not cheap. Nor should it be, right? Especially if we’re talking about diamond jewelry.

We spend serious money on jewelry because it’s beautiful. Because it’s dazzling. Because it’s a carefully crafted work of art. But most important, because it represents lofty ideas and emotions like undying love and eternal sacrifice.

So the average American will spend more than $6,000 on an engagement ring. Or lay out a minimum of $3,000 for a diamond tennis bracelet. Or often pay north of $7,000 for a diamond pendant. You get the picture. It’s a pretty, pricey picture.

Yes, diamond jewelry is a pricey investment. And we’re all OK with that. It’s just a fact of life. It’s just the price of love, you might say.

The cost of jewelry insurance.

If you’re going to spend this kind of money on a jewelry piece, it only makes sense to also spend (a much smaller amount) on insurance to protect your investment. So, just how much does jewelry insurance cost, anyway? There’s no “set in stone” answer to this common question, but there is a rather easy and fairly accurate formula you can utilize when calculating the yearly cost of jewelry insurance. It goes like this:

For every $100 it would cost to replace your ring (i.e. its appraised value), you should anticipate paying between $1 and $2.

In other words, if you decide to insure a wedding ring with an appraised value of $10,000, you’re likely to pay somewhere between $100 and $200 a year for the insurance policy — which further breaks down to $8.33 to $16.67 a month. This amount is known as your premium. A little later, we’ll look at and talk about your deductible — and show you where Zillion can really give you an advantage here.

What about my…warranty?

You might also be wondering “Why should I purchase jewelry insurance…if I can get protection provided by the warranty that comes with the piece?” Another good question. A jewelry warranty, or “guarantee”, typically covers against manufacturers’ defects and “regular wear and tear” on the piece. It may also cover cleaning and other maintenance, or “service” tasks. While some jewelers offer a warranty as part of the purchase price, others may charge an additional fee.

Oftentimes, however, there is a catch. In order to keep your jewelry warranty current and in effect, you have to abide by your jeweler’s specific (and sometimes strict) rules. This often means having your diamond or gemstone piece inspected at regular periods, usually around every six months. If you miss one of these documented inspections, the jeweler can then choose to void your warranty.

While your warranty can certainly provide a huge lifeline if you purchase a defective piece or it wears down over time, it might not be of much use to you if you simply lose it — or your house or car is broken into and it gets stolen. These are just some of the situations and scenarios that standard jewelry warranty plans aren’t likely to cover.

A solid jewelry insurance policy will cover the entire value of your jewelry piece — under a pretty wide and deep umbrella of “loss” or “doomsday” scenarios. These scenarios typically include accidental damage, theft, “acts of God” (fires, flood, tornadoes, hurricanes, lightning strikes, etc.) and could also encompass accidental loss and mysterious disappearances.

You get what you pay for — peace of mind.

So in the example used earlier, we’re talking about paying between $100 and $200 a year to insure an engagement ring that’s “valued” at $10,000. Now $10,000 in its own right is a considerable amount of money for most people. But when you really talk about the “value” of something like your (or your spouse’s) ring…well, can you even really put a monetary value on such an item?

Now let’s just say you still decide not to insure your treasured ring. Maybe you live in a neighborhood you know and love with a sparkling reputation and nary a whisper of a local crime — and what’s more, you’re renowned for your ability to never, ever lose or even misplace anything (even something so small and easily lost as a ring). With so many bills and subscriptions to pay as it stands now, why should you add yet another expense to the household ledger?

In theory, this all makes solid sense. But we don’t live our lives in theory or “on paper” now, do we? In all honesty and reality, nobody knows exactly what the next day (or even hour) holds for us — and most events that occur in our lives are well beyond our control (even if you’re a “control freak” of sorts). So even if your ring is almost certain not to be stolen, and you know you’ll never misplace or lose it…it could still end up badly damaged or even destroyed. You…just never know. Sounds cliché, but hey, it’s true. And as we “covered” earlier, your standard jewelry warranty won’t be of much use to you if many of these unfortunate occurrences were to strike.

When you really weigh, assess and analyze it all, jewelry insurance often amounts to paying for security and peace of mind. And if something does go wrong with your treasured ring (or other jewelry piece), the cost of not insuring it could be far higher than the annual fee you’ll pay every year for that peace of mind and protection.

Zero worries for…zero dollars?

In addition to your premium, there’s another cost associated with your jewelry insurance — your deductible. Remember, we told you we’d get to this part soon.

The deductible is the amount of money you must pay if you ever do need to file a claim for lost, stolen or damaged jewelry. To use the same dollar amount example as earlier, let’s say your deductible is $1,000. So if your jewelry goes missing or is damaged, you’d be responsible for up to $1,000 of the repair or replacement cost. After that, any additional costs within the coverage limit would be paid for by your policy.

Deductible amounts can vary dramatically, and sometimes you get to set or choose that amount. If you opt to insure your jewelry with Zillion and end up needing to file a claim, you’ll never need to pay a deductible during the claims process. In addition to our $0 deductible advantage, we’ve also done our best to deliver an overall claim experience that’s as pain-free as possible.

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