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Insuring a diamond
takes a bit of thought, planning, and shopping around. Diamond
insurance isn’t like purchasing car insurance. It is quite
different. Depending on the state that you live in, there are
basically three different types of policies that will cover
diamonds, and all insurance policies that cover diamonds are
considered Marine type policies.
The first type of insurance policies for diamonds is an Actual Cash
Value policy.
If the diamond is lost or damaged beyond repair,
the insurance company will replace
the diamond at today’s market
value, no matter how much you paid for the diamond
to begin
with. This type of insurance policy for diamonds actually is not
that common.
The most common type of insurance for diamonds is Replacement Value
insurance. The insurance company will only pay up to a fixed amount
to replace the diamond that was lost or damaged beyond repair. This
does not mean that they will pay that amount – it means that
they will pay up to that amount. In most cases, the diamond can be
replaced at a lower cost.
The third type of coverage offered for diamonds is Agreed Value.
This is sometimes called ‘Valued At.’ This type of coverage is very
rare. In the event that the diamond is lost or damaged beyond
repair, the insurance company simply pays you the amount that
you and the company agreed upon. This is the best type of insurance
to have, but it is rarely offered. If you can’t get Agreed Value
coverage, Actual Cash Valuecoverage should be your next
choice.
Your rates will be determined by the
value of the diamond, the type of coverage that you select, and the
area that you live in. If you live in an area with a high crime
rate, you can expect to pay more for your diamond insurance
coverage. It is important to remember that insurance agents are not
qualified jewelers, and jewelers are not qualified insurance agents.
It is best to get a certificate for your diamond, and to provide the
insurance company with a copy of that certificate. This leaves the
insurance company less room for arguments over the actual value of
the diamond.
Don’t rely on separate coverage to cover your diamond. For instance,
if you diamond is stolen from your home, it is probably covered on
your home owner’s insurance policy – but the diamond probably won’t
always be in your home, and once it leaves your home, there is no
coverage.
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