A Diamond May Not Be Forever: Insuring Personal Property

In 2022, the average cost of an engagement ring was about $6,000.1 Of course, many couples spend much more. The possibility of losing such a meaningful and expensive possession may be hard to consider, but it happens. And homeowners or renters insurance might not provide enough protection to replace a fine piece of jewelry or other expensive item that is lost or stolen.

The personal property coverage in standard policies generally covers only certain incidents (damage or accidental loss are typically excluded), and losses for jewelry and certain other expensive items are typically limited to around $1,500.2 Of course, a claim under your standard policy would also be subject to your deductible.

If you have cherished jewelry or other valuable goods in your home, you may be able to increase the limits for certain categories by paying a relatively small additional premium. However, the increased limits might still be too low for your needs, and the coverage will still apply to a narrow list of incidents.

For broader coverage with higher limits, 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 washed down your kitchen sink — or 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, furs, 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 the current value of any personal property you own 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.