Is it worth getting insurance?

[knuman]

Hi everyone - with my e-ring nearly completion, I have been wondering whether it would be necessary or worth it to get the ring insured. In total I''ve spent about AUD$20,000 (roughly USD$15,000) on the diamond and the ring, and I''ve been told it should appraise for around USD$20,000 or more. Insurance on rings in Australia is expensive, and it will probably cost me around AUD$1000 a year (USD$750). This will cover just about everything except wear and tear, anywhere in the world.

Since I''ve already stretched my budget beyond recognition, is an additional cost like insurance necessary? I was thinking maybe insure it for a year (until such time we are married), because the costs do add up pretty quickly. Some people say it''s worth it because of how valuable it is, but on the flip side my future fiance will no doubt guard it like a wild animal so I would not have assumed the risks to be exceedingly high...

 

[FireGoddess]

Accidents happen, thefts happen, losses happen. If you don''t have the money to easily replace the entire cost of the ring without denting your wallet....insure it.

 

[Kaleigh]

Date: 11/9/2006 8:38:27 PM
Author: FireGoddess
Accidents happen, thefts happen, losses happen. If you don''t have the money to easily replace the entire cost of the ring without denting your wallet....insure it.

Yup. Well said. If it would be a hardship to replace it out of pocket, best to insure it. Sh*t happens, sad but true.

 

[jasper]

Are there any cheaper insurance companies in Australia?

In the United States, jewelry insurance tends to be about 1% - 3% of the replacement cost of the item per year. The rate depends on where the ring is kept (e.g., New York City is more expensive than Walla Walla), which insurance company you have, and whether the replacement cost is above a threshold price (currently $ 15,000 for Jewelers'' Mutual).

-- Jasper

 

[knuman]

Apparently if you have home and contents insurance in your name you can add on the value of the ring - but if not (which is the case with me), you can only get it insured as an individual item, and most insurance companies don''t want to go near them, and hence the high premiums...

If anyone knows anything more about insurance in Australia please let me know!

Thanks

 

[Ellen]

Date: 11/9/2006 8:51:39 PM
Author: Kaleigh

Date: 11/9/2006 8:38:27 PM
Author: FireGoddess
Accidents happen, thefts happen, losses happen. If you don''t have the money to easily replace the entire cost of the ring without denting your wallet....insure it.

Yup. Well said. If it would be a hardship to replace it out of pocket, best to insure it. Sh*t happens, sad but true.

Agree with everything said here.

 

[nejarb]

Date: 11/9/2006 8:38:27 PM
Author: FireGoddess
Accidents happen, thefts happen, losses happen. If you don''t have the money to easily replace the entire cost of the ring without denting your wallet....insure it.

I agree w/ this argument if it''s something that you cannot live without. however, one of the ways people acquire enough money to be able to easily replace something like a 15k ring is by using the money they do have wisely.

750/yr is ALOT of $! If you can afford to pay 750/yr in insurance for a ring, then it''s very likely that you can afford to replace the ring by NOT buying that insurance. Here''s how:
invest 750 (or 1000 in australian currency) every year in a common stock index fund. even adjusted for inflation and after any taxes that you have to pay on dividends/interest (which you should reinvest), you should earn 5%. At this rate, you will have over 15k USD in 14 years (in 2020 dollars!)--assuming the world''s economy doesn''t tank--in which case there is probably some world-wide plague or nuclear holocaust going on, so i wouldn''t be too worried about a ring anyways.

so, in a sense, you can be your own insurance company. and chances are very high that you''ll be a profitable one, b/c you won''t loose your ring in the next 14 years.

I think insurance is a great thing if used wisely, but it''s just a way to spread some kind of risk (i.e. loss of a ring) around to a large # of persons. And it is a business, so someone will profit from it. in other words, you can expect to pay more into insurance during the course of your life that you will get out of it. so where possible, it''s better to be self-insured.

 

[Ellen]

Date: 11/10/2006 9:48:22 AM
Author: nejarbso
b/c you won''t loose your ring in the next 14 years.

You cannot know that. Accidents, burgleries, etc. have no time table.

 

[Scintillating]

YES! Insurance is necessary. My friend just had her set stolen out of her kitchen!
If you can''t afford to replace it without batting an eye - you NEED insurance!

Scintillating...

 

[Upside Down Man]

Date: 11/10/2006 10:12:35 AM
Author: Ellen

Date: 11/10/2006 9:48:22 AM
Author: nejarbso
b/c you won't loose your ring in the next 14 years.

You cannot know that. Accidents, burgleries, etc. have no time table.

Seriously. There are a host of things that can go wrong. I recognize that the OP said "my fiancee will guard it like a wild animal", but that's not always good enough to protect your ring.

Burglaries: Someone can forcibly take your ring from you. It happens suddenly and without warning and certainly not worth risking your life over,

Accidents: a car accident, a slip-and-fall, banging your ring into something - anyone of these can damage your diamond or damage your ring. The point is you don't know if or when they are going to happen. But they certainly do happen.

Breakage: something as simple as a prong breaking or the diamond slipping out of the setting. The diamond gets chipped when you bang it on a surface, and a week later it wedges itself out of the setting. Next thing you know you look down and you just have a piece of metal on your hand - the diamond is gone.

Mysterious disappearance: sometimes the thing just plain disappears. You put it on your nightstand before bed, you wake up and you just have no idea where it is.

All of these things happen without clearing them with you first. They happen right under your nose, and to even the most vigilant people. Insurance allows you never to worry about the things you can't plan for.

$750 per year is a lot, I agree. You need to ask yourself if you want to risk prevailing over the unknown.

 

[firebirdgold]

I thought most home insurance policies covered things like jewelry?

 

[Upside Down Man]

I can only speak to policies in the United States - I don''t know anything about policies in Australia (if they are different and what the differences are). Most homeowners policies cover jewelry up to a certain amount - like $500 worth. If you want your valuable articles specifically insured, you have to schedule them by attaching a rider to your homeowners policy. That way you can insure your jewelry for the full replacement value and not get capped at whatever the nominal value is ($500 or so). To schedule your jewelry separately, you usually have to pay an extra premium, around $1 a year for every $100 of jewelry you want to insure. The cost of the premium will vary per location and per insurance carrier though.

 

[nejarb]

chances are very high that you''ll be a profitable one, b/c you won''t loose your ring in the next 14 years.

sorry, i shouldn''t have placed a comma between "one" and "b/c." it changed the meaning of what i meant to say, which is that chances are very high that you won''t l-o-s-e the ring in the next 14 years. anecdotal evidence of other ring losses is unconvincing b/c the chances are still low that it will happen to any one person, regargless of whetehr it happened to someone you or i know.

also, the first thing i said was that i agreed w/ the better-to-be-safe-than-sorry mentality if it''s something you cannot live without. for some this means healthcare or shelter, for others it means 15k diamond rings

. I personally would rather take the (low) chance of someday needing to live without the ring (only temporarily--until year 14 comes along) than pay such an outrageous premium.

 

[nejarb]

Date: 11/10/2006 10:12:35 AM
Author: Ellen

Date: 11/10/2006 9:48:22 AM
Author: nejarbso
b/c you won''t loose your ring in the next 14 years.

You cannot know that. Accidents, burgleries, etc. have no time table.

of course i can''t and of course they don''t. but the smaller the time frame, the less likely it is that something will happen that can only happen once in a lifetime (she can only lose that particular ring once in her lifetime).

everyone is just saying insure it! insure it! but what if the annual premiums were 10% of the value? i mean, where do you draw the line? I should go into the insurance business in aulstralia--what''s going on there??? aren''t there antitrust regulations? or are these the fair prices b/c everyone there gets in so many accidents and steals each other''s rings all the time?

 

[denverappraiser]

There’s no one answer to whether it’s worth it. The insurance companies are taking a stab at what they believe your risks to be and are then setting the premiums so that they can assume those risks and still make a profit at the end of the year. The problem is when the risks aren’t entirely financial. If you can’t afford to pay for the loss then it’s no longer just about money, it’s about whether you’re willing to do without the item or whether you are willing to forgo or sell something else in order to produce the necessarty funds. This whole process is true for ALL insurance, not just jewelry. If the company’s actuarials have accurately estimated the risks and set their premiums accordingly, you are, on average, losing money by buying insurance. It may be a wise purchase anyway either because of the non-financial concerns or because of the piece of mind that is generated by having this particular risk assumed by someone else.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[decodelighted]

I wouldn''t want to be explaining to my sobbing wife whose possibly just been the victim of foul play (mugging/robbery or worse) or another personal tragedy (fire/natural disaster) OR who may have innocently hurt her beloved ring in a general household accident (knocking it, dropping it down a drain) that she''ll ALSO now have to go without an engagement ring for XXX more years until the "ring insurence account" reaches replacement value. Which, btw, could be a lot more in XXX years ... so adjust the figure for inflation & if you have a way to guess diamond prices in the year XXXX ... let us all know!

 

[Suteishi]

We live in Chicago. In a good neighborhood, but still, it''s Chicago. We travel a lot. All over. Never had a problem before. This past summer, the last day of our 2 week trip to California, in a little mall in a tiny suburb, our rental car was broken into and everything stolen. We stopped in for fifteen minutes to grab a bite to eat and when we came out everything was gone.

Everything was hidden (trunk), but the police guessed they saw the "my other car is an enterprise rental" on the license plate holder and got it all.

They stole our clothes, my laptop (which had tons of my work on it), my purse (I had my wallet with me but left my purse in my suitcase so I wouldn''t have to carry it on), all my makeup, our ipods, camera, my earrings, etc, etc. They took everything that wasn''t nailed down. Including Japanese books that meant nothing to anyone but us. It was horrible. A nightmare.

The car company insurance wouldn''t cover spit.

Thank the gods our homeowners did. It took weeks to file the claim and even though we bought new stuff, months later we''re still searching for our old things. Even little things. I went looking yesterday for a favorite pair of tweezers only to discover those are gone too. But the insurance very much softened the blow for us. Yes, we could have afforded to rebuy everything on our own, but a setback is a setback. It was nice to replace what we needed and wanted without worry or dipping into any of our savings.

And this isn''t the first time for me. When I was 15 my parents'' house burned down after an electrical fire. They lost everything. Including my mom''s jewelry. There is no way without the insurance we had that we would have recovered as a family so soon. We wouldn''t have been homeless, but we would have had a struggle for years. Instead my parents filed a claim and rebought what was lost.

Even if you are very very careful, things happen. That''s life. Yes, you can play the insurance game and put money aside for a rainy day, but there is a security in having great insurance that nothing can match. Things are not important, people are. Even millionaires I know have insurance. Even though they can afford to walk in and rebuy whatever, it''s not sound financial practice to live like that hoping nothing bad will ever happen. It''s like someone saying they don''t need health insurance because they never get sick.

You have to add the cost of the insurance in with the cost of the ring. It''s a part of life. Nothing is worth more than your peace of mind. Your fiancee might guard it like a wild animal, but if the unthinkable ever happened and she was robbed, you''d want her to let it go and not fight for a material thing.

Insurance is not as cool or as status-y as a larger rock, but all in all it is part of the price for having and wearing a sparkly.

 

[knuman]

"I should go into the insurance business in aulstralia--what''s going on there??? aren''t there antitrust regulations?"

Funny you should say that - I happen to be an anti-trust lawyer! I think it''s just that the market for jewellery insurance here is not that big, certainly nowhere near as big as it is in the States, and thus the premiums are higher. I don''t think it''s nearly as expensive if you tack it on to your home and contents insurance policy, but if you just insure the one item outright it can be costly.

 

[nejarb]

interesting.

well, everyone is making good points about insurance, but my point is are you still going to insure the 15k ring if 1 yr of premiums is 15k? no! what if it''s 10k? no! i''m glad we all agree so far. yes, 750 is more reasonable than 10k, but it''s still unreasonable. would i pay it if i owned a 75k ring? absolutely. 1% is fine. 5% is not fine.

i have a 13k ring that will cost me & my guy around 250/yr to insure. that''s about 1.9%. he told me that if i don''t and something happens to it then he''s not buying me another one, at least not for a long time. i think i will insure it, at least for a few years, but i just haven''t gotten around to it yet...

 

[Upside Down Man]

Date: 11/10/2006 3:59:38 PM
Author: nejarb
interesting.

i think i will insure it, at least for a few years, but i just haven''t gotten around to it yet...

This is the opening line to many a sob story.

 

[FireGoddess]

Date: 11/10/2006 4:04:22 PM
Author: Upside Down Man

Date: 11/10/2006 3:59:38 PM
Author: nejarb
interesting.

i think i will insure it, at least for a few years, but i just haven''t gotten around to it yet...

This is the opening line to many a sob story.

I didn''t read all these posts but there was a PSer (I think Laney?!) who accidentally banged her ring on a GROCERY CART and chipped the diamond. Of course she was careful with her ring but stuff happens. It just does. You might want to get around to insuring it sooner rather than later...

 

[FireGoddess]

https://www.pricescope.com/community/threads/help-i-broke-my-diamond.30949/=

Here ya go...take a look at them apples...!!

 

[4themrs]

I had the same question myself, slightly different circumstances.

I think this is the link from my old post that maybe able to help you:
https://www.pricescope.com/community/threads/insurance-for-my-ring.52910/

 

[mtrb]

That stinks. Is CHUBB the best?

 

[diamondhunter10]

better to be safe than sorry. As has been stated before, accidents and theft happens.
Are you going to be insuring in Australia or US?

I know for myself I would never buy jewelry and not have it insured. If I was going to buy something really expensive I would give almost equal time to researching insuring, shipping, etc.