Do Homeowners and Renters Insurance Cover Jewelry?

Jewelry is often one of the most valuable items that people own. It is also one of the most vulnerable to damage or loss. The FBI estimates that over $1 billion of jewelry is stolen every year in the USA, with another $1 billion in losses from damaged or lost jewelry. Only 4% of the stolen jewelry is recovered, leaving an enormous financial and emotional burden on the individuals. 

These figures are startling and highlight the importance of properly protecting your jewelry. Insurance for jewelry can be a confusing area for consumers and business owners alike. While you might think that a standard homeowners or renters insurance policy would protect your jewelry, as with many personal belongings, home policies often have quite limited protection and leave you exposed to a wide range of risks.

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Low limits

The average homeowner's policy has a limit of $1,500 for jewelry. This means that if your $10,000 diamond ring was stolen, you would only be reimbursed up to $1,500. Additionally, if your home was burglarized and all of your other valuables were taken as well, then the total amount of insurance paid out for all the items in one claim is often capped at a relatively small amount, such as $5,000.

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Coverage gaps

Homeowners insurance typically won’t cover jewelry that is lost or mysteriously disappears. This means that if you drop your engagement ring down the drain or leave it at the beach you won’t be covered. Accidental damage and coverage for natural disasters are also often limited, meaning if you chip your engagement ring or it’s destroyed in a flood or earthquake then you may not be protected. Theft coverage also varies by insurer and may only cover theft at the property if on a homeowner policy.

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High deductibles

Homeowner policies often have high deductibles that limit the payout on a claim. A typical homeowner deductible is usually $1,000+ and can rise significantly based on the property's value. Therefore, any claim made for jewelry will often have a large deductible, considerably eroding the total payout. 

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Adverse claims impact

Making a jewelry claim on your homeowner’s insurance could negatively impact your insurance credit score and future coverage. It may increase your premiums or get you denied for future coverage due to poor claims history.

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Depreciated value

Some homeowner policies won’t repair or replace your jewelry. Instead, they’ll offer you the depreciated “actual cash value” of the item, which can leave you short on cash to purchase a new item.

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This may sound like a tear down of homeowners or renters policies, but that is not the intention. They are essential to protect your residence and all the valuable and valued items within it. Where they fall short is protecting items that tend to go with you, such as jewelry, bikes, and electronics. To learn more about how Oyster can help you stay protected, check out our jewelry insurance for details.