Protect Your Golden Assets
Are Soaring Gold Prices and Your Jewelry Coverage a Matched Set? The price of gold has surged 176% in just five years. That means a gold necklace worth $1,500 five years ago could be worth more than $4,000 today. If you haven’t reviewed your insurance coverage lately, it also means some of your family’s most valuable possessions may be largely unprotected.
This content is provided courtesy of USAA.
The Price-Policy Gap
Gold’s meteoric rise has been hard to miss, with the price soaring from $600 per ounce in October 2006 to now more than $1,700. “I’ve been in the industry since 1982 and have never seen prices rise like this,” says Kevin Adkins, a gemologist at USAA.
What’s not as obvious is how that trend may leave your family’s treasures vulnerable. That’s particularly true if you’re relying only on a homeowners insurance or renters insurance policy to protect your high-value items.
Three aspects of these policies could leave your gold jewelry and other high-value items underinsured, explains Mark Ginther, assistant vice president of USAA P&C Underwriting Policy. They include:
- No coverage choices for high-value items. Homeowners and renters policies offer limited coverage for several different types of valuables, including jewelry. These limits can be adjusted with some companies, according to the Insurance Information Institute, but typically have individual item limits that may not fully protect you.
- Deductibles. Like other claims on your homeowners or renters policy, those related to jewelry and other valuable property are subject to the policy deductible, which is the amount you’re responsible for before insurance benefits kick in.
- Coverage gaps. While theft of your jewelry is covered by homeowners and renters policies, lost and misplaced items aren’t covered at all. For example, losing your diamond ring down the drain isn’t covered under these policies.
Bring Your Coverage Up to Speed
To fully cover gold and silver jewelry, Ginther suggests valuable personal property insurance. Unlike homeowners and renters insurance, this type of insurance:
- Lets you select your amount of coverage. Valuable personal property insurance can be purchased two ways: You could opt for coverage that includes all the jewelry in your household or individual items.
- Has no deductible. There is no out-of-pocket cost on your part, up to the policy limits.
- Provides broader coverage. “In addition to covering lost items, valuable personal property insurance also provides protection for jewelry that’s damaged,” says Ginther. That means you’d be covered for damaged prongs on a ring or the loss of a side stone.
This insurance doesn’t cover just jewelry. “It can also be used to protect other high-value items that have limited coverage under a homeowners or renters policy,” says Ginther. These items include firearms, silverware, musical instruments, stamps, fine art, coins and furs.
“Of course, even if you already have valuable personal property coverage, it’s essential that you monitor the coverage to make sure it’s high enough after the big surge in precious metal prices,” adds Ginther.
Know What It’s Worth
If you bought your jewelry from a reputable retailer, you probably received an appraisal or bill of sale that documents specific details, such as the gold’s karat purity and the cut, clarity, color and carat weight of diamonds. While it also shows the dollar value of the piece at the time of purchase, you’ll need an appraisal to find out what it’s worth today.
“A recent appraisal is important not just when you initially insure an item but also when you file a claim,” says Adkins. “Appraisals will help both the jeweler and insurer when it comes to reconstructing the jewelry or substantiating a claim.”
If you need an appraisal and aren’t sure where to turn, Adkins suggests starting with the American Gem Society website. “Call a few of the listed gemologists in your area and ask how much they’d charge and how long it will take,” he adds.