My Wife Lost Her Diamond … What Do You Mean We Don’t Have Coverage?

As an insurance agent for over 20 years, I have received the call from husbands and wives many times. Diamonds in jewelry, especially rings, can occasionally be lost. The gold settings can be bent or become weak with time. One day, the precious gem is gone.

I have heard a number of odd reasons for this type of loss. Diamonds have fallen out while doing dishes and gone down the drain with the dishwater. Another client lost her diamond while walking her dog. When the dog lunged, the diamond fell out and was lost. Sometimes the unsuspecting woman does not know when or where the diamond falls out.

Jewelry is Considered Personal Property

The coverage issue with a lost diamond is that an unendorsed Homeowner or Farmowner Policy does not provide coverage for this type of loss. Jewelry is considered Personal Property. Most policies provide Named Perils coverage for Personal Property. Simplistically, this means there is a list of perils named in the policy form that apply to loss of Personal Property. Losing a diamond or its mysterious disappearance is not on that list.

How to Cover Potential Loss to Jewelry

That brings us to the question of how do we cover this type of potential loss to jewelry? The most practical way is “schedule” the item. A bill of sale for a newly purchased item or an appraisal for an existing piece of jewelry will establish the value of the item. The jewelry is “scheduled” or listed on your policy with a description and value. Keep in mind that the value is a limit and a settlement could be made at a lesser value if the same type of diamond in terms of size and clarity is available.

The Scheduled Personal Property coverage generates a premium charge that is based on the value. Scheduled Personal Property coverage tends to be Open Perils coverage. This simply means that all causes of loss are covered except for a few exclusions. Oftentimes, the Scheduled Personal Property coverage will have no deductible or a lower deductible.

A theft claim where a piece of jewelry is blatantly stolen is a completely different issue and possibly a topic for a future blog.

Recently, my wife lost the diamond from the setting in her engagement ring. She had no idea how or when it happened. Fortunately, we did have that item scheduled on our insurance policy.

In conclusion, insurance consumers may wish to contact their agent to inquire about Scheduled Personal Property. While it may be cost-prohibitive to insure all jewelry items, it may be a prudent decision with items that have precious gems that could fall out of a ring, necklace, or earrings. If you choose not to schedule these items, you have made the decision to self-insure them. In either case, it’s important to include them on a personal property inventory list.

Bob Moore, CIC, AFIS

Disclaimer: Information and claims presented in this content are meant for informative, illustrative purposes and should not be considered legally binding.