Received Expensive Gifts for Valentine’s Day? Here’s How To Make Sure Your Valuables Are Covered

Reading time • 7 minutes

By Matic

For millions of Americans, Valentine’s Day is more than just another day on the calendar. It’s an opportunity to express your love for your significant other — with dinner and flowers and candy and, for the luckiest of us, jewelry.

In fact, according to one recent study conducted by the National Retail Federation, jewelry accounts for close to 20 percent of all Valentine’s Day gifts in recent years, worth roughly $3.9 billion.

Whether you received jewelry (or other valuables) as a gift for Valentine’s Day, Christmas, your birthday, or you just bought it for yourself, your valuables deserve to be protected. Below is a look at some of the ways you can make sure your items are covered in the event that they were to become damaged, destroyed, or be stolen — from adding coverage to your existing homeowners insurance policy to purchasing a standalone jewelry insurance policy.

What’s considered a “valuable” item?

Value is a subjective term. For this reason, it’s hard to say that an item needs to be worth a certain amount of money in order to qualify as being valuable.

That being said, a good rule of thumb in determining if something is “valuable” is to ask yourself whether or not it would be difficult to replace it if something were to happen to it, either because it’s expensive, rare, a collectible, or carries sentimental value.

Below are some examples of items that are commonly accepted as “valuable” by insurance companies, which may warrant being covered:

Fine jewelry and watches, which you may want to insure with a standalone jewelry policy
Family heirlooms
Antiques
Fine art
China and silverware
Firearms
Electronics
Camera equipment
Medical devices
Collectibles (such as coins, stamps, trading cards, etc.)
Sports equipment (such as ski gear or golf clubs)

If you believe that you may have a valuable item but you’re not 100 percent sure, you can always have it appraised. This will help you understand how valuable your item is, which will be important information to have as you look for coverage.

Option #1: Check your existing policies.

Before you begin shopping around for coverage, it’s important to first understand whether or not you already have coverage under your existing homeowners or renters insurance policy. That’s because most homeowners insurance policies include a certain amount of coverage for personal property, which would include any of the valuables listed above.

Once you know whether or not your plan includes personal property coverage, your next step is to determine your coverage limits. If these limits are higher than or equal to what your valuables are worth, then you may not need additional coverage after all. But if the value of your items exceeds the coverage limits of your policy, you may need to add coverage through one of the options discussed below.

As you’re reviewing your policy, you’ll also want to get a sense of the perils that are and aren’t covered, as well as whether or not any categories of items are excluded from your policy, as this can vary widely.

Option #2: Upgrade to replacement cost coverage.

Does your homeowners insurance policy cover your personal property at actual cash value or at replacement cost value? While these terms may sound similar, they’re actually very different concepts in the insurance world and can make a big difference in your coverage.

Actual cash value refers to the value of your items at the time that they are being replaced. As it factors in considerations like depreciation (the rate at which an item loses value over time) this usually translates into you receiving less money than it would actually cost to replace your item in the event that something were to happen to it.

Replacement cost value, on the other hand, refers to how much money it would actually take to replace your item if it is damaged or destroyed, without worrying about things like depreciation. In most cases, this will be higher than the actual cash value of an item.

With this in mind, if your existing homeowners insurance policy only covers personal property at actual cash value, you may want to think about upgrading your policy to replacement cost instead.

Option #3: Consider adding scheduled personal property coverage.

If you still don’t have enough coverage, want to increase your limits, or want to make sure you’re covered for more events (like mysterious disappearance), your next option is to purchase scheduled personal property coverage. This can either be purchased as an endorsement to your existing policy or as a standalone policy. This is essentially additional coverage that you can purchase for specific, high-value items like jewelry, art, collectibles, and other valuables.

To purchase scheduled personal property coverage, you’ll typically need to provide your carrier with detailed photos of the item, a receipt from when it was purchased, and an appraisal or documents certifying the item is authentic. All of this information will be used to verify the value of your item.

To better understand how scheduled personal property coverage works, imagine that your significant other gives you a necklace valued at $5,000 for Valentine’s Day. Your existing homeowners insurance policy has a $1,000 coverage limit for jewelry, and you have to pay a $1,000 deductible before it kicks in. If your necklace is stolen, that means that you’d only end up recovering $1,000 from your carrier — leaving you paying $4,000 out of pocket to replace the necklace.

If, on the other hand, you purchased scheduled personal property coverage for your necklace, you would be able to recover much more: Up to the full appraised value of the piece, minus any deductible.

Important note: Scheduled personal property coverage only covers those items specifically listed out in your policy.

Option #4: Purchase a jewelry rider or standalone jewelry policy.

If you’re specifically looking to insure jewelry, you can also consider purchasing a standalone jewelry insurance policy. These policies are very similar to scheduled personal property coverage, and are offered by many carriers — like Jewelers Mutual. As with scheduled personal property coverage, jewelry insurance can be either a rider or standalone policy depending on the carrier.

Purchasing a standalone jewelry insurance policy can make sense if you are looking to insure a particularly large number of items which exceed the limits of your homeowners insurance policy. Additionally, jewelry insurance often covers events that may not be covered by your standard homeowners insurance policy, such as mysterious disappearance. Another benefit of purchasing a separate jewelry policy is that if you need to file a claim, it won’t affect your homeowners insurance premiums (AKA, raise your rates).

While rates will of course vary depending on a number of factors, including where you live, a general rule of thumb is that you can expect to pay between one to three percent of the value of your jewelry each year for coverage. This means that if you want to purchase coverage for a necklace worth $10,000, you can expect your policy to cost somewhere around $100 and $300 per year.

Looking to learn more about jewelry insurance? Get more information and get started with a quote through Matic’s partnership with Jewelers Mutual here.

You’ve got options

Whether you’re specifically looking to insure jewelry or you need coverage for a broader range of valuables, you’ve got a number of options to choose from. As you consider your options, it’s also a good time to take a look at your homeowners insurance policy and make sure that the coverage you have still suits your needs.