Should I Insure My Engagement Ring?
Posted on Wednesday, May 17, 2017
You’re engaged? Congratulations!
Such an exciting time, but with so many details to think about: DJ or live band? Cake or cupcakes? Insure your engagement ring or don’t?
Hmm… I bet that last question has crossed your mind.
What happens if you lose your ring while on your honeymoon? What happens if it is stolen? It is important to consider the impact of a loss, especially when you are carrying an expensive, flashy piece of hardware on your ring finger. Keep reading below to see what coverage you may have and why it is a good idea to schedule (add) your ring on your property insurance policy.
WHAT IS ALREADY COVERED ON YOUR AFM HOMEOWNERS, TENANT or CONDO PLUS POLICY*
There is coverage built into your AFM Homeowners Plus, Tenants Plus or Condo Plus policy up to a Special Limit of $6,000 for your ring. Your Personal Property deductible is applied to the overall loss (the value of your ring).
The payout for the claim primarily depends on if the loss was caused by a “Specified Peril.” (Specified Perils: Fire, Lightning, Explosion, Smoke, Falling Object, Impact by Aircraft or Land Vehicle, Riot, Vandalism or Malicious Acts, Water Escape, Windstorm or Hail, & Transportation)
We will outline two claims scenarios below that affect what is paid to you in the event of an insured loss to your engagement ring.
SCENARIO 1 – LOSS CAUSED BY A SPECIFIED PERIL:
Ex. 1a) Your $9,000 engagement ring was destroyed in a fire at your home.
In this scenario, coverage will be available for the full ring value of $9,000, less your Personal Property deductible ($500, for example). The total payout would be $8,500. The Special Limit does not apply, as the loss was caused by a Specified Peril (fire).
SCENARIO 2 – LOSS NOT CAUSED BY A SPECIFIED PERIL (SPECIAL LIMIT APPLIES):
We will show the impact of the Special Limit using two different ring values.
Ex. 2a) You lose your $9,000 engagement ring while swimming in the Ocean on your honeymoon.
In this scenario, the loss is $9,000 less your Personal Property deductible ($500, for example) which amounts to an $8,500 loss. However, the Special Limit of $6,000 applies as the loss was NOT caused by a Specified Peril. The maximum payout you would receive is $6,000.
Ex. 2b) Your $3,000 engagement ring is stolen (theft) from your home.
In this scenario, the loss is $3,000 less your Personal Property deductible ($500, for example) which amounts to a $2,500 loss. The loss was NOT caused by a Specified Peril; however, the maximum payout you would receive is $2,500, as the loss is lower than the Special Limit.
WHAT OPTIONS ARE AVAILABLE FOR BETTER RING COVERAGE?
You have the option to add (also known as “Scheduling”) your ring on a Personal Articles Floater, which attaches to your Home Insurance policy.
Here are three advantages to scheduling your ring on a Personal Articles Floater:
1. Keep your Claims Free discount on your home
Any claim filed for your Personal Property on your Home Insurance policy may affect your eligibility for the Claims Free discount on your renewal. When you add your ring to a Personal Articles Floater, the claim for the ring only impacts discounts for the Floater - your Claims Free discount on your policy would be unchanged on renewal.
2. Lower deductible
It is not uncommon to see a $1,000 Personal Property deductible on a Home Insurance policy. By adding your ring to a Personal Articles Floater, you may choose a lower deductible specifically for your ring. We can offer deductibles as low as $50 on a Personal Articles Floater.
3. All-Risk coverage
The scenarios previously mentioned are specific to a PLUS Comprehensive policy, which provides All-Risk coverage for Personal Property. Your insurance policy may have Broad or Standard coverage, which does not provide All-Risk coverage for your Personal Property. For example, if you lost your ring, there is no coverage under the Broad or Standard insurance policies. By adding your ring to a Personal Articles Floater, you can insure your ring for the All-Risk coverage and have peace of mind.
WHAT ELSE YOU NEED TO KNOW:
It is important to have a recent appraisal completed by an accredited Gemologist Appraiser. An appraisal is a professional estimate of what it would cost to replace your ring based on current market conditions, which helps us to replace your ring to what it was worth in the event of a loss. Without it, there is nothing to substantiate the value of your ring.
*Disclaimer: Each person’s requirements surrounding coverage for their jewellery should be discussed with a Licensed Insurance Agent or Broker, in order to obtain a full understanding of the product(s) coverage being provided along with possible limitations or exclusions of that coverage.