Insuring your Diamond Wedding Bands

Diamonds ring bands are some of the priciest jewellery in the world, partly due to the fact that diamonds are the most expensive of gemstones. Having paid a handsome price for the diamond ring band, it is natural that you want to insure it like you insure your car or house.

In general, many insurance companies do offer jewellery insurance. Jewellery insurance normally provides protection for theft, loss by fire or other disasters. There are at least three types of jewellery insurance available today. They offer protection in the form of the jewellery’s actual cash value, replacement value or agreed value.

Actual Cash Value

Actual cash value insurance compensates you for your loss using current market rates and not the price you actually paid for the jewellery. Insurance companies typically do not prefer this form of policy as jewellery value may fluctuate against their favour, if such a policy is offer, you can expect to be paying a higher premium than other policies.

Replacement value

Replacement value insurance offers to replace the lost item through a firm of the insurer’s choice but this replacement item is usually limited to a certain amount of the insured item. In case you do receive a replacement item through such a policy, be sure to have the replacement item appraised by an independent party to ensure that you are not short changed by the insurer.

Insurance companies can normally replace your diamond for less than the appraised value because they can bargain better with their strong buying power. However, this does not mean that they will offer the replacement to you at a lower premium. The premium is still calculated based on the market value rather than at the value they are able to obtain the replacement.

Agreed value

Agreed value insurance compensates you according to a value agreed between yourself and the insurer. This type of insurance may not be offered to you but you can always suggest drafting such a contract by the agent. The premium paid will be dependent on the agreed value. A higher agreed value will naturally result in a higher premium.

For actual cash value and replacement policies, it is important for you to keep the original jewellery description, certification and it’s receipt as proof of its value or qualify for replacement or cash appraisal. For jewellery with diamonds, it is best to maintain an original gem plot document. The gem plot is a document that details the cut of a diamond and its flaws or inclusions. This document will come in useful when comparing if the class of diamond used as the replacement is on par with the original one.

But of course, the best result is to NOT lose your jewellery. No matter how good a protection your insurance can offer, they can never replace the sentimental value attached with the original piece.