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Insuring your Valentine’s Day jewelry

You have the perfect Valentine’s Day planned – flowers, dinner, a bottle of fine wine and a sparkly bauble in a box tied with a red bow. But what about insurance for that gift?

If you’re planning to woo your loved one with a pricy present, it’s important to make sure you get it insured, experts say.

Many gift buyers make the mistake of assuming their home insurance policy will cover anything they buy, says Jeff insuring-valentines-jewelryMcCarthy, senior account executive and branch manager for the Harrington Insurance Agency in Woburn, Mass. But there are three good reasons not to count on your home insurance, he says:

Coverage for certain types of valuables – such as jewelry, fine art, antiques, furs and Oriental rugs – usually is limited to about $1,500 to $2,000 under a standard home insurance policy.

For your home insurance to cover the loss of that token of your affection, it would have to be lost in a “peril” that’s covered by the policy, such as theft or fire.

Even if the item is covered under your home insurance, you’ll have to pay a deductible.

However, experts say, you can buy extra home insurance coverage for a ring or another Valentine’s Day bauble.

Independent insurance agent George Reese, president of Henry D. Young Inc. Insurance Agency in Salem, N.J., says that when the diamond fell out of his wife’s engagement ring, the add-on coverage he had purchased to cover the ring under his home insurance policy made it easy to get a new one. “The company took what was left of the ring and wrote us a check,” he says.

So, how do you decide whether your gift requires insurance? It depends on the type of gift, McCarthy says. “Obviously, you wouldn’t insure a sweater, and you’re not going to insure a dozen roses,” he says.

Jewelry probably is the most common gift that should be insured, he says. You’ll want to consider the value of the jewelry or any other gift. “Some people would say a $5,000 pair of earrings is not worth insuring, and for other people it’s their life savings,” McCarthy says.

If you do decide the gift requires insurance, don’t put it off. “You could lose the gift. It could get stolen,” McCarthy says.

For example, one of McCarthy’s clients bought a $20,000 diamond engagement ring for his girlfriend and figured he would insure it after he popped the question. On the night he planned to propose, he lost the ring. “He freaked out and panicked when he realized it wasn’t there,” McCarthy says.

The ring wasn’t covered by his home insurance, so the unlucky groom-to-be lost the money.

To avoid having your Valentine’s Day ruined by a similar mishap, experts recommend taking these steps:

1. Get the item appraised. A receipt will do in a pinch, but valuable jewelry – or art, antiques or a fur coat – should be appraised.

2. Add the gift to your home insurance policy. If you have home or renter’s insurance, consider buying a rider, an add-on to your policy that will cover the item. Adding a rider to an existing policy is the easiest, most inexpensive way to insure a gift, Reese says. A rider generally costs about $12.50 per $1,000 in value – so insurance for a $2,000 ring would cost about $25 a year, McCarthy says.

3. Buy insurance separately. If you don’t have home or renter’s insurance, you can buy a separate insurance policy for valuables. But it likely will cost more than an add-on policy because insurance companies require a minimum dollar amount to write a policy, Reese says. So, if coverage would be $25 a year added to a home insurance policy, it could be $150 a year – or whatever the minimum is – for a separate policy, he says. If your gift is extremely expensive, you might have to get a separate policy. For example, add-on policies through Travelers Insurance cover up to $10,000 per item.

4. Snap some photos. It’s a good idea to take pictures or a video of the item, Reese says. The more documentation you have if it’s lost, the easier it makes the claims process, he says. “Having a photo jogs your memory and provides documentation for the claims adjuster,” he says.

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