Could you be underinsured? | PEMCO

We’ll start with the good news. Your homeowners or renter insurance will come to your rescue if your personal belongings like furniture, clothes, or electronics are stolen or destroyed in a covered disaster (like a fire). 
 
But here’s the not-so-good news: Virtually all insurance sold in the United States – including PEMCO’s – sets limits on what it will pay for certain high-value items like jewelry, firearms, silverware, fine art, antiques, coin collections, and more. 

For most people, the standard policy offers enough protection and keeps premium costs down for everyone. However, if you own multiple high-value (and theft-prone) pieces such as large diamond jewelry or precious art, your policy’s coverage limits can fall short. It not only caps the total amount of coverage available, but it sets per-item limits.  

In this situation, you may end up underinsured. 

Here’s how you can make sure that, for all the emotions your special possessions evoke, “worry” isn’t one of them.  

Do I need more insurance coverage for my jewelry?  

Jewelry is, by far, the most common item at risk of being underinsured. That’s especially true for inherited jewelry (for which you may not know its exact value) and even wedding sets, like an engagement ring and wedding band. 

PEMCO’s standard policies cover the jewelry you own up to a combined total value of $5,000, with a limit of $2,500 per item. If the jewelry is simply lost (instead of stolen, destroyed in a fire, or damaged under other conditions named in the policy), coverage won’t apply unless you’ve added a special “all risk” personal property endorsement.   

How do I get extra coverage for jewelry?  

If you have multiple pieces or even one special piece that would exceed those limits, you can buy per-item coverage based on a price per $100 in appraised value. In insurance-ese, the added coverage is called an “endorsement” or “rider.” Sometimes you also hear people talk about “scheduling” a specific high-value item like an engagement ring. With the added coverage, there’s no deductible (that is, the amount you pay out of pocket before coverage kicks in on a claim). Your local PEMCO agent or a representative at 1-800-GO-PEMCO (1-800-467-3626) can give you current pricing.   

To ensure accurate coverage, you’ll need a professional appraisal, preferably from a jeweler certified by the Gemological Institute of America (GIA), American Gem Society (AGS) or International Gemological Institute (IGI). To keep your premium as low as possible, be sure to tell the jeweler you need the appraisal for insurance purposes (the cost to replace the piece) rather than a retail appraisal.   

PEMCO requires appraisals on all items that exceed $10,000 in value. Items that fall under this limit don't require an appraisal, but it's highly encouraged to help ensure the correct value is assigned to them.

While you’re free to choose any qualified jeweler to handle your appraisal, make sure they include a report with a description of the item, including points, carats, and often a photo or illustration. Keep the original and send a copy to us so we can adjust your coverage.   

Even if you already have extra coverage, it’s a good idea to check in periodically with your jeweler to be sure your insurance has kept pace with the rising price of gold and other precious metals and materials. Also, get items reappraised if you’ve upgraded rings with bigger stones.   

Other ways to protect valuables 

Protecting jewelry and collectibles isn’t an all-or-nothing deal. For example, as much as you love your grandma’s brooch, it might not be your style or something that you’re likely to wear. In that case, consider storing it in a bank safety deposit box or even a secure, fireproof safe at home. Focus instead on insuring items you use or display.   

Also take care to make sure your special piece stays as perfect as your memories. We recommend you get your jewelry inspected once a year to detect and repair broken prongs or loose stones.  

As always, you never have to go it alone when it comes to protecting your peace of mind. To learn more about your options or get a free coverage review, call your local PEMCO agent or a representative at 1-800-GO-PEMCO (1-800-467-3626).