Don't Forget to Insure Your Holiday Jewelry Gifts

You flashed it. You stared at it and admired it. You listened to the ooh's and aah's of envious friends. But did you remember to insure the jewelry you received as a holiday gift last year?

If you're like most Americans who select jewelry as a gift, chances are that you spent more time picking the wrapping for it than thinking about how to go about insuring it.

Consider this unfortunate scenario. Boy proposes to girl. Boy gives girl a one-carat diamond solitaire engagement ring set in platinum as a Christmas gift. They get married and live happily ever after until she puts some lotion on her hands and the ring flies across the room and into a heating duct, never to be recovered.

According to a print article by Kimberly Lankford in the January 2008 issue of Kiplinger's Personal Finance Magazine, the majority of homeowners' policies have a limit on coverage for personal valuables. And it could be far less than the replacement price tag for a valuable piece of jewelry.

A typical homeowner's policy covers up to 50 percent of your total coverage limit. With a $250,000 policy, you would get $125,000 of coverage for home furnishings and equipment. However, most insurance also has a limit on what the company will pay as damage or theft for all jewelry, typically in the range of $1,500 to $2,500.

The average policy also puts limits on categories such as silver table service, firearms, coins, furs, and stamps. The details should appear in the "contents and additional coverage" part of the policy, according to Lankford. She also notes that most policies won't cover accidental loss.

To protect against a loss of a valuable piece of jewelry or raise your coverage limit, you need to ask your insurance agent to either add a rider to your policy or "schedule" the piece. The article suggests that while an itemized receipt could be sufficient to schedule an item, you might need a written appraisal.

The advantage to scheduling the item with a value is that the full amount will be covered should it get lost or be stolen or destroyed. You'll also avoid having to pay a deductible.