If you possess valuable items, you need to make sure you've got jewellery insurance that's up to the job. This can be done by adding your valuable possessions to your existing home insurance policy or by buying specific jewellery cover.
We're not just talking about the super-rich. Many of us have belongings of significant value, from engagement rings to iPads and from inherited antiques to designer handbags.
So what would happen if they were stolen, lost or damaged?
Getting the right cover
We buy contents insurance to provide funds to replace items if there is a problem. But policies vary widely, so you need to get one that offers adequate cover, particularly if you have a lot of valuable items. Otherwise, you could end up out of pocket in the event of a claim.
Standard contents insurance covers your belongings up to a certain limit, often calculated according to the number of bedrooms in your home.
Your policy might, for example, offer cover up to £40,000. In other words, if all your belongings were destroyed, you could claim a maximum of £40,000.
What is single item limit?
The single item limit is a clause within most home insurance policies that refers to the maximum amount an individual item (such as a ring) will be covered for should you need to make a claim.
The single item limit is typically between £1,500 and £2,500.
Let's say your home insurance policy has a single item limit of £2,000. You could still lodge a claim for a total of £40,000, but the most you could claim for any one item would be £2,000.
So, if your gold ring is worth £2,500, the insurer would only pay out up to £2,000.
However, there are ways of protecting your more valuable items, as we explain below…
Engagement ring and watch insurance
Most insurers offer a range of policies to suit different needs and budgets.
So if you own something worth more than the single item limit – such as an engagement ring or watch - you should call your home insurance provider and get the item listed separately on your insurance policy. That way it will be insured up to its full value.
If, on the other hand, you own a large collection of jewellery, you might have to pay extra for a policy with higher overall and single item limits.
Alternatively, you can get separate engagement ring insurance or watch insurance through a specialist insurer.
Personal possessions cover
Whatever you decide, make sure your contents policy includes 'personal possessions' cover as this will ensure your valuables are protected outside your home.
For example, you might take your expensive camera to a friend's wedding, only for it to be damaged beyond repair. Again, you should check that the single item limits on your policy are adequate.
Of course, you only know if a limit is adequate if you also know how much your possessions are worth. The price of gold has soared over the past few years, which means your jewellery could also have risen in value.
Antiques, art and other collectibles also vary in value according to market and economic conditions.
Experts recommend a jewellery valuation every two years so you don't get caught out by rising prices.
An outdated valuation can lead to disappointment if you have to lodge a claim. For example, if your engagement ring was last valued 10 years ago at £1,000, it could now be worth £2,000. But the insurer might stick to the original valuation.
Or, the new value might breach the single item limit, leaving you out of pocket.
The insurer could also quibble the claim if there is no up-to-date, accredited valuation document.
How to protect your possessions
Always tell your insurer about any items of particular value. Otherwise you could end up with an insurance shortfall, or even invalidate the policy.
- Keep receipts for valuable items as proof of the purchase price.
- Make sure valuations are up-to-date – and store the certificates in a safe place. Expensive jewellery should be valued every two years by a jeweller accredited by the National Association of Goldsmiths.
- Take photographs of your valuable items as they can help insurers to process your claim more easily.
- Keep valuables in a safe or lockable cabinet when not in use to deter thieves. This does not mean hiding them under the bed as this is one of the first places a burglar will look.
- Don't leave or display valuables where they can be seen by opportunist thieves.