Author: MJT
Insuring Your Diamonds
Insuring a diamond takes a bit of thought, planning, and
shopping around. Diamond insurance isn’t like purchasing car insurance. It is
quite different. Depending on the state that you live in, there are basically
three different types of policies that will cover diamonds, and all insurance
policies that cover diamonds are considered Marine type policies.
The first type of insurance policies for diamonds is an
Actual Cash Value policy. If the diamond is lost or damaged beyond repair, the
insurance company will replace the diamond at today’s market value, no matter
how much you paid for the diamond to begin with. This type of insurance policy
for diamonds actually is not that common.
The most common type of insurance for diamonds is
Replacement Value insurance. The insurance company will only pay up to a fixed
amount to replace the diamond that was lost or damaged beyond repair. This does
not mean that they will pay that amount – it means that they will pay up to
that amount. In most cases, the diamond can be replaced at a lower cost.
The third type of coverage offered for diamonds is Agreed
Value. This is sometimes called ‘Valued At.’ This type of coverage is very
rare. In the event that the diamond is lost or damaged beyond repair, the
insurance company simply pays you the amount that you and the company agreed
upon. This is the best type of insurance to have, but it is rarely offered. If
you can’t get Agreed Value coverage, Actual Cash Value coverage should be your
next choice.
Your rates will be determined by the value of the diamond,
the type of coverage that you select, and the area that you live in. If you
live in an area with a high crime rate, you can expect to pay more for your
diamond insurance coverage. It is important to remember that insurance agents
are not qualified jewelers, and jewelers are not qualified insurance agents. It
is best to get a certificate for your diamond, and to provide the insurance
company with a copy of that certificate. This leaves the insurance company less
room for arguments over the actual value of the diamond.
Don’t rely on separate coverage to cover your diamond. For
instance, if you diamond is stolen from your home, it is probably covered on
your home owner’s insurance policy – but the diamond probably won’t always be
in your home, and once it leaves your home, there is no coverage.
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