As the holidays approach, many of us dress in our finest and showcase our cherished jewelry. But for those in insurance, it’s also “lost-jewelry season.” Here’s a guide to understanding jewelry coverage options and navigating the claims process.
Coverage Options: From Basic to Best
- Homeowners 3 – Special Form (HO3)
- Coverage: $1,500 for loss by theft.
- Note: This only covers theft with clear evidence of the item being stolen.
- Homeowners 5 – Comprehensive Form (HO5)
- Coverage: $1,500 for loss by theft, misplacement, or accidental loss.
- Note: Provides broader coverage, including cases where jewelry is lost or misplaced.
- Scheduled Coverage
- Coverage: You specify your jewelry’s value, paying a little more to cover it beyond the standard $1,500 limit.
- Note: The value is determined at the time of the loss, capped by the policy’s limit.
- Agreed Amount Coverage
- Coverage: You and your insurer agree on the jewelry’s value beforehand, which is paid out in the event of a loss.
- Note: This approach avoids disputes, as the amount is predetermined.
Important Considerations
- Common Claims: In my experience, the majority of jewelry claims are due to “mysterious disappearances” (lost or misplaced items). Scheduling jewelry covers for “mysterious disappearances” and eliminates the deductible.
- High-Value Items: If you own items worth more than $50,000, you might save by warranting they stay in a safe deposit box when not worn.
- Emotional Impact: Losing jewelry is often emotional, but insurers focus on economics—just the financial loss.
What to Expect When Filing a Claim
- Provide a Recent Appraisal: Supply the most current appraisal of the lost item’s value.
- Photos: Not mandatory but can be helpful for documentation.
- Recorded Statement: Prepare for a recorded statement with the adjuster; your word is vital to validate the loss.
- Settlement Timeline: Claims generally take 3-4 weeks to settle, but around 20% of the time, the lost item reappears before then.
If You Find the Item After Settling
If you locate your lost item after settling the claim, you have two options:
- Return the Item: Return either the found or replacement item to your insurer (with the value of the replacement item validated).
- Reimburse and Keep Both: Negotiate a reimbursement to keep both items. Most insurers are open to a discounted reimbursement to avoid reselling.
Final Thoughts
Jewelry claims are unique in that insurers often rely solely on your word regarding the loss. They’re thorough in confirming honesty—not a personal judgment, but a necessity due to past fraudulent claims. By cooperating with adjusters, you help reduce fraud, which ultimately lowers premiums for everyone.
Help the adjusters do their job, and the likelihood of a favorable outcome increases.
