Engagement Ring Insurance: To Insure or Not to Insure

So you just spent a bundle of money on your honey’s engagement ring. You may be feeling a little nervous if she is the forgetful type or if she tends to misplace things. But what about theft, a diamond accidentally falling out of its setting or the classic “it fell down the drain” scenario?  All of these situations are possible and can be covered with engagement ring insurance. The question you have to ask yourself is, “Is engagement ring insurance worth it?”

A rule of thumb to use is that for a standard “Replacement Policy” you will pay an annual premium of between 1% - 3% of the cost of your ring depending on which city you live in. Just like car insurance the city you live in and their respective crime rates will determine the cost of your engagement ring insurance. Here are few examples (no deductable):

                Los Angeles: $5,000 engagement ring = $100/year

                Denver: $5,000 engagement ring - $63/year

                Dallas: $5,000 engagement ring = $78/year

RingEnvy says: “Insure Your Ring”. Even if it’s just for the first year or so. It’s worth the peace of mind and is only a fraction of what you might pay for a replacement rock.

Appraisals and Engagement Ring Insurance Policy Types

With most engagement ring insurance policies you will likely need an appraisal. Be sure to get your appraisal from an organization that is accepted by your ring insurance provider. Some insurance companies do not accept all appraisers.

You can insure just about anything these days if you are willing to pay for it. This is where you need to find the best policy for your situation. There are several different types of engagement ring policies and here is a brief summary of the most common ones:

Valued At Policies

I once took out a “Valued At” policy for an old classic car that meant a lot to me but not to anyone else. These types of policies allow you to set the price or value of the ring and you will be covered for that exact amount. You can insure the ring for more than what you paid for things like “sentimental value” or “time and trouble”. This is the most expensive way to go but you know exactly what you’re getting if you need to exercise your policy.

Homeowners Policies

If you rent or own a home you probably have some sort of homeowner policy which covers things like TVs, fine china, etc. but it may or may not cover jewelry. This type of policy generally only covers items in the case of fire, flood, earthquake, etc. and may not cover theft and things occurring outside the home. Check your homeowner’s policy to see what it covers and when but this isn’t a good option if you want to insure your ring. 

Replacement Policies

This type of policy does exactly what it sounds like it should do – replace your engagement ring exactly as it once was. It will replace the ring with an equivalent of the same metal, size, cut, clarity, shape, etc. It will replace the ring at the current market value so if your wife of 20 years loses her ring you will get the same ring regardless if it costs 5 times more today than when you bought it. 

               
Actual Value Policies

Unlike Replacement Policies, this policy doesn’t account for current day value. In fact, it depreciates your ring from when you bought it based on daily wear and tear. Basically, if needed to replace a ring you would take the original price of the ring you paid, depreciate it based on how old it is and that would be the cash amount you would be given. This is the least expensive type of engagement ring insurance as well as the most common.