Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Sep 28, 2021

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jewelry

Insurance Q&A: “Is jewelry covered under homeowners insurance?”

There are a host of contents insurance coverage questions related to homeowners insurance policies, and for any homeowner who wishes to protect their valuable possessions, there needs to be clear, concise answers.

But we typically aren’t too concerned about it until the damage occurs and the insurance claim is filed. This is where the confusion, and sometimes anger, sets in.

It’s recommends that you first learn how to read a homeowners insurance policy prior to filing a claim to avoid any potential surprises.

The good news is jewelry is covered on the typical homeowner’s policy. But like many aspects of insurance that aren’t fully understood by the insurance-buying public, there are a few hitches when it comes to even the most standard policies.

What’s the deal with jewelry coverage?

Your policy’s coverage limit for ‘contents’ in the home is generally 50% of the value for which the home is insured.

For example, if your home is insured for $300,000, you contents are insured for $150,000.

Your home’s ‘contents’ can be generically described as any item that would fall out of your home if you turned it upside down and shook it hard enough.

(Do I need to inventory my home’s contents?)

So, up to $150,000 in coverage would exist for your jewelry then, right? Case closed? Not so fast.

Similar to cash, silverware, guns, some computer equipment and musical instruments, and business personal property, jewelry fits into a special category of exposure to a ‘loss’.

Specifically, these expensive items are targeted for theft. Any item that thieves tend to go after when stealing from a home falls within this category. This is why it’s explicitly advised that if you have something that fits into this category, any piece of jewelry that is worth a lot to a thief, that you never store it out in the open.

(Top 10 contents insurance claims)

These items are regularly targeted outside of the home as well, which greatly increases the chance of them being stolen.

As a result of this well documented fact, homeowner’s insurance policies usually contain a sub-limit of liability for these types of losses. So is there such thing as jewelry coverage? It’s a little more complicated than that.

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What’s a sub-limit?

Simply put, the items described above are not covered for full value under your home’s ‘contents’ coverage. There happens to be a policy limit.

Your insurer limits the amount of coverage to a (much) smaller amount for these items. If your jewelry (or guns and furs, etc.) aren’t worth more than the sub-limit, you can stop reading now. If you have higher value items, read on.

The good news is a homeowner’s policy will certainly allow you to purchase additional protection, which means higher limits in this case, for these target items for an additional insurance premium.

You will want to look into a Personal Articles Floater (PAF) if you desire/need the most comprehensive coverage available for your high-ticket items.

The PAF offers coverage anywhere in the world and even potentially insures you against losses involving any sort of ‘mysterious disappearance’ and in some cases, even a diamond that fell out of a setting on an engagement ring. If you have these types of items in your home, you may think the additional premium is worth it.

So what is the final word?

Your expensive jewelry is technically covered in most typical homeowners policies, but you’ll want to review your entire policy to figure out if you’ll need any special coverage. Contact a local independent insurance agent for PAF policy quotes if you have a high dollar collection, or difficult to replace and valuable items in your home that fit the above list.

You will likely find the cost to properly insure these items is a drop in the bucket versus the cost to replace them in the event they are stolen. Especially if you own a lot of custom jewelry pieces that would be near impossible to replace.

(photo: Koshyk)