Like most valuable items in your home, diamonds can be covered by insurance. Not only can you insure your diamonds, but considering their value, there’s no reason you shouldn’t. However, there are a couple of steps you must take first and a few options available where coverage is concerned, so there are a few things you should know to get started.
To begin with, you need to know the value of your diamonds. That means you’ll have to take your collection to a jeweler and get each stone individually appraised. This can get a bit pricey if you have a lot of items, but considering the cost of replacing them after theft or damage, the price of appraisal is minute. Upon completion, you will receive a certification stating the particulars of each diamond and its estimated value, which can be used to determine your coverage. You should make copies and photos to provide your insurance company.
So what options are there where insurance is concerned? Really, there are three types, and only you can decide which one is right for your collection. The most commonly used coverage is called “Replacement Value” and it covers the cost to replace your property. This is the least expensive coverage because your diamonds can often be replaced at a much lower cost than their stated value. You could also select the “Cash Value” option, which will pay out the current market value of your merchandise (although the price of diamonds, as with other commodities, is constantly fluctuating, so depending on when you need to cash in your policy, you may not even receive the amount you paid for your stones).
Finally, you can opt for one last type of coverage, which is called “Valued At” insurance. It is not very commonly used and there are two reasons. It tends to be the most the most expensive option, and insurance companies don’t generally like to offer it because they must pay out an agreed upon value for the items covered. This means if you have a diamond that you purchased for $1,000, but the value at the time of coverage is agreed to be $1,200, that is what they will pay you, even if it is only worth $800 at the time of theft or irreparable damage. Most insurance companies are loath to pay even a fraction of what something is worth, much less more than it’s worth, so you can understand why they charge more for this coverage.
In any case, you will have to choose the insurance that best suits your needs and your budget, but being aware of the steps necessary to get the proper insurance and knowing the different options available is a good first step towards making sure you get the value out of your diamonds in the event of accident or theft.