2022 Valentine’s Day: Love & Insurance
By Michael Giusti
Even though nobody ever accused Cupid of shooting a couple with an insurance policy, that doesn’t mean that insurance and love don’t go hand in hand.
Now, most insurers don’t go so far as the one in the United Kingdom in the early 2000s that was piloting “bad date” insurance to British women. (No kidding. It covered everything from the cost of the meal to the dress, but it didn’t stick around very long.) However, since love is in the air this Valentines season, it would be worth it to run down other insurance policies worth looking at when it comes to love.
Engagement Ring Insurance
Engagement ring prices run the gamut. About 10% of couples spent less than $1,000 on the ring according to a recent survey, while the average ring hovered around $6,000 — with some jumping north of $50,000.
For most couples, no matter how much they spend, a diamond ring is a substantial investment worth insuring.
Thankfully, most homeowner’s or renter’s insurance policies will step in with some coverage — and more than a couple catches.
This insurance will cover lost or stolen jewelry. So, if a ring falls down a storm drain, or if a masked marauder breaks into a home and steals the ring, it would be covered.
The first thing a couple looking to insure the ring needs to consider is how much it is worth. And that calls for a professional appraisal. Most jewelers are happy to give you their professional insights for around $100 per hour, and that goes a long way toward making a case to an insurance company, especially if the jeweler is credentialed and qualified.
Typical insurance policies will cover rings up to a limit — say around $1,500 to $3,000. That limit will be written into the policy language. Some policies outright exclude jewelry, too. So, it is well worth it to read the policy language before assuming it is covered.
And keep in mind that homeowner’s and renter’s insurance policies have deductibles. So, if a policy covers a $1,500 ring, but it has a $2,000 deductible before coverage kicks in, it may be time to look for another option.
And on the higher end, couples need to pay attention as well. Say they splurged for that $50,000 ring. If they want their homeowner’s policy to cover it, they will need a special jewelry rider, which will cover the more costly ring, but at a higher premium.
Outside of a homeowner’s policy, there are some companies that specialize in insuring jewelry. These might be good options if someone carries a large deductible, or if they just don’t have homeowner’s or renter’s insurance in the first place.
And in the very short run, some premium credit cards also offer some insurance in the form or “purchase protection.” If someone buys a loved one a ring, and that ring washes away at the beach during the proposal, the credit card may offer some protection, but only for a limited amount — usually less than $1,000, and only for a limited time — typically only a few months after it was purchased.
Most insurance policies cover loss, damage, and theft. They don’t typically cover “mysterious disappearance,” so couples should make sure to file a police report if a ring is stolen to create a paper trail for their claim.
Wedding Insurance Policies
The wedding ceremony is another huge expense for most young couples. Typically ringing in north of $30,000, weddings can be one expensive day.
Thankfully there are specialized insurance policies to cover them.
Wedding insurance typically takes care of two major aspects of the wedding: cancelation and event liability.
The cancelation portion kicks in if the wedding is canceled for reasons that were unknowable and that were beyond the couple’s control.
Say a blizzard prevented the destination wedding from happening, the cancelation portion will pay to reschedule the event, or reimburse the couple for their non-refundable deposits.
COVID-19 is a tricky one, though. Because it is a well-known risk, canceling a wedding because of a COVID outbreak wouldn’t likely be covered, unless there is specific policy language allowing that. And fear is almost never covered, so worrying about COVID risk will almost certainly not be covered. If a couple is looking for protection against COVID, they must ask the insurer before signing on the dotted line.
One particular policy does cover a unique cancelation — change of heart.
If either bride or groom calls off the wedding because they no longer want to go through with it, this policy will protect “innocent financers” who might have lost money — but not the couple. Say the bride’s parents put the deposit down, they would be insured. But if the groom paid for the florist himself, he would be left holding that bill.
And with the change of heart policy, couples need to break up with foresight. The policy language requires they cancel one calendar year in advance. So, cold feet the night before the wedding won’t be covered.
The event portion of the wedding policy is designed to protect the couple and the venue if something goes terribly wrong.
Say a waiter trips over a running toddler. Or say a bride’s train knocks over a candle in the church, starting a fire. Or say the caterer leaves the tuna salad in the sun too long and people get food poisoning.
Wedding insurance would cover that liability.
When it comes to the honeymoon, there are policies that can kick in as well.
Trip cancelation insurance plays three main roles: cancelation, interruption, and health coverage.
The cancelation portion covers the non-refundable deposits if the trip is canceled for unforeseen reasons beyond the couple’s control. This would be things like the hotel, flight, excursions, or anything that is prepaid that can’t be refunded.
The interruption portion pays for expenses incurred if some portion of the trip is delayed or canceled — say if someone gets sick while in London and so couldn’t carry on to Paris.
And the health portion kicks in if the couple’s health insurance doesn’t cover them where they are traveling, either because they are out of network within the United States, or if their health policy doesn’t cover them abroad.
COVID must be accounted for specifically in the policy language because it is a known event, but there are plenty of travel policies with COVID-specific language.
And while it is not necessarily insurance, the couple would do well to put a few hours aside to think about financial planning. It is better to have the conversation about how the checking account is going to be handled before saying their vows. Will everything go into one account? Will there be “yours, mine, and ours” accounts? And what about retirement accounts and any assets being brought into the marriage? And what is everyone’s debt situation?
Good planning is almost always better than good insurance.
After the wedding, it’s time to move in together. And that means to make sure everything is covered.
When they move in together, an inventory of everything they own makes a lot of sense, especially as they are unpacking all their expensive wedding gifts. If everything was destroyed in a fire, would there be enough contents coverage in their homeowner’s or renter’s policy to cover it?
And keep in mind, even with a top-tier homeowner’s policy, not all hazards are covered — specifically floods and earthquakes.
Starting a new home is the perfect time for evaluating risk and coverages.
Starting a new life together is also a good time to start thinking about life insurance.
Philosophically, life insurance is there to cover your obligations in the case that you unexpectedly die.
If you were no longer there and your income dried up, what would happen to your family? Would your spouse be supported? Would your kids have tuition? Would your elderly parents need care?
A term life insurance policy is an inexpensive way to protect those commitments.
And while you are evaluating your policies, look at the beneficiaries. Make sure your new spouse gets added to an old policy, and make double sure that an ex-spouse hasn’t been inadvertently left on as a beneficiary.
A wedding is also what is called a change-in-life event when it comes to health insurance. That means that even if it isn’t open enrollment, group health insurance policies allow you to make changes.
After tying the knot, newlyweds need to look at both spouse’s employer health plans to see which one makes the most sense. Sometimes one is better than the other, and other times a combination makes more sense.
If both policies are generous, it may make sense for both spouses to keep their own employer-sponsored plans. And depending on the child situation, sometimes it makes more sense to use a family plan with everyone on it, while other times it makes sense to just do an employee-and-child plan coupled with another employee-only plan.
One trap to avoid, however, is a spousal surcharge. Some employers with otherwise generous health insurance may charge a monthly surcharge to the spouse if they forego their own employer’s plan in order to use their spouse’s more generous plan.
The key is to play out all the scenarios.
Auto insurance should also catch the new couple’s attention. If they moved to a new home, they need to update their policies with the new address (and likely new rate depending on their new address’ risk.)
Getting married is often good news for the husband — married men in their 20s often pay less for insurance than their unmarried counterparts. (Insurers think that if they settled down, they may pose less of a risk in other areas of their lives, too.)
And if there are teenagers who come along with the marriage, those step children need to be accounted for on the policies.
And while we are on the topic of growing old together, newlyweds would do well to take a look at long-term-care insurance.
This covers things like in-home care once they are elderly, or moving into a nursing home or assisted living facility. With long-term-care insurance, it is important to buy it when the couple is young, because costs go up fast with age.
What If It Doesn’t Work Out: Divorce Insurance Options
But what if the relationship ends up on the rocks?
Marriage counseling may make a lot of sense, but that doesn’t mean it is covered by health insurance. That is because while federal law requires health insurance to cover mental health, having a struggling relationship is not the same as having a mental illness.
Now, if one or both spouses have a mental health diagnosis, that may be a way to cover counseling.
Another route may be an employee assistance program offered by their workplace.
Some university clinics or public health clinics offer marriage counseling with lower cost schedules.
And the couple can always pay cash. Rescuing a troubled relationship is often worth it.
Still, sometimes nothing works and the divorce attorney is the next call.
In that case, there are even policies for that. Divorce policies, known as marriage settlement agreement insurance, are a new and relatively rare line of insurance. They are meant to help cover child support or spousal support in the event of a divorce.
These are different than a prenuptial agreement, which would spell out how spouses and children would be cared for and how property is distributed after the split. But they may make some sense.
An important aspect to these policies is that they often have a waiting period, say four years, before someone can file a claim. So, if they feel like they might need this, they should make sure not to wait until the marriage is on the rocks before buying it.
Insurance may not be the most romantic topic. But optimists could look at it as securing a lifetime of love.
Whether it is insuring the engagement ring, the big wedding day, or setting the couple up for a long happy life together, insurance plays a big role along the way when it comes to love in 2022.
But don’t expect an insurance policy option for that first date, there’s some things we can’t cover.
Michael Giusti, MBA, is senior writer and analyst for InsuranceQuotes.com