Insuring your diamond
There are various ways of insuring your diamonds and jewellery.
- 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.
- 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. This is the most common type of coverage.
- Agreed Value: This is also called `Valued At.' 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 and not very common. 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 jewellers, and jewellers are not qualified insurance agents. It is suggested to get a certificate for your diamond, as well as insurance valuation, and to provide the insurance company with a copy of that certificate and valuation. This leaves the insurance company less room for arguments over the actual value of the diamond.
Don't rely on general insurance 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. It is also important to specify items that you wear on a regular basis to avoid repudiation of any claims. It is good practice to supply your insurance company with a detailed list and valuations of all your valuable pieces.
