A dedicated jewelry insurance policy can protect your homeowner’s insurance
Christmas, a popular occasion for gifting jewelry, is just around the corner. So, it’s time to ponder the importance of jewelry insurance. This article will delve deep into the subject and guide you on how a dedicated jewelry insurance policy can protect your homeowner’s insurance and help you avail lower premiums.
Why Is Jewelry Insurance Important?
Jewelry, being small, valuable and susceptible to loss or damage, contributes to a considerable portion of personal property thefts. Department of Justice statistics reveal that 70% of all personal property thefts involve jewelry. The implications of this fact are far-reaching and more significant than most insurers and agents acknowledge.
“A loss related to jewelry, no matter how small, can have a significant impact on your homeowner’s policy.”
Jewelry claims usually go unnoticed, primarily because the settlement cost is relatively small. However, if you have scheduled your jewelry on a homeowners policy, the implications of a claim can be substantial.
Implications of Scheduling Jewelry on a Homeowners Policy
Unlike other household contents covered under a homeowners policy, jewelry is unique due to its vulnerability to theft and damage. It’s not just kept at home but also worn out, making it susceptible to loss or damage. Thus, it’s a magnet for theft and is particularly prone to “mysterious disappearance”.
“Mysterious disappearance is the most common peril associated with a jewelry loss.”
Even if your homeowners policy does not cover mysterious disappearance, once you make a claim, it’s reported to databases like the comprehensive loss underwriting exchange (CLUE) or the property insurance loss register (PILR)[^2^]. These reported losses live on these databases, impacting your homeowner’s policy significantly.
Having a prior loss related to jewelry scheduled on a homeowners policy makes it even more difficult to find a new policy with another carrier.
Downsides of the Personal Articles Floater
A standalone jewelry insurance policy or a personal articles floater addresses the jewelry exposure by offering broader coverage, including covering mysterious disappearance. Most personal articles floaters also have higher limits than typical homeowners policies.
However, if a standalone policy is with an insurer that reports to CLUE and PILR, losses covered by the personal articles floater will be included as part of the company’s aggregate loss report. Therefore, any jewelry claims can still impact the homeowners policy.
“Check with your carriers to see if a jewelry loss counts against the client’s homeowners experience.”
The Solution: Standalone Policy with No Reporting
The best choice is a standalone policy with an insurer that specializes in personal jewelry coverage and does not report to CLUE or PILR. Such a policy not only saves you money but also ensures that a jewelry loss will not affect your homeowner’s policy and your claim-free status.
“A standalone jewelry policy with an insurer that does not report to CLUE or PILR is the best choice.”
However, not all standalone jewelry policies offer a cash settlement option. Some offer only a repair-or-replace option, which might not always be desirable.
Protecting your jewelry investment is crucial. A dedicated jewelry insurance policy not only provides coverage for your precious possessions but also helps protect your homeowner’s rate and lower your premiums.
Contact Integrated Insurance Advisors to discuss whether a standalone insurance jewelry policy is right for you.