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Is insurance necessary?

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NoobInNeed

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I''m finalizing the purchase of an e-ring and I''m now looking into insurance. It seems like it''s going to be around $100/year. Effectively throwing away $1,000 every 10 years if the ring isn''t lost or stolen just seems like a lot. Is there a certain price point where insuring a ring isn''t really advisable? Or does the overwhelming majority of PS users suggest insuring the ring?
 
Date: 4/13/2010 11:25:04 AM
Author:NoobInNeed
I''m finalizing the purchase of an e-ring and I''m now looking into insurance. It seems like it''s going to be around $100/year. Effectively throwing away $1,000 every 10 years if the ring isn''t lost or stolen just seems like a lot. Is there a certain price point where insuring a ring isn''t really advisable? Or does the overwhelming majority of PS users suggest insuring the ring?
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Hi Mike,

I look at it this way, if you needed to replace the ring and you could afford to do so without financial pain then you don''t need insurance, if not then you would be better off having insurance. To me less than $10 a month would be worth it for the peace of mind but it depends on you.
 
Well, how long do you think you''ll have the ring without something going wrong? You can estimate a time and say "oh I''ll have this for 70 years, but the premiums will pay for a new ring in only 55 years." The only problem with that is you''d better be sure you''ll actually have the ring for that long.

Another way to look at it is how difficult would it be for you to replace the item if it wasn''t insured. Most people don''t have the money just laying around to replace something like that again. However, if you spent significantly less than you could afford, then chances are you could easily replace it. If that''s the case and you feel comfortable making that purchase again, then I guess don''t insure it.

It comes down to whether you''re willing to take the gamble or not. There was a thread recently about a woman who was cleaning her rings in a soaking solution and the step mother was cleaning dishes and threw them down the garbage disposal. They were destroyed, and she was thankful for the insurance. You never know what can happen even if you think you''re being careful.
 
Thanks guys. I imagine it may also depend on the particular female''s penchant for misplacing things!
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Jox: That was the calculation I did to result in this question. I''ve never filed an insurance claim of any kind in my life so it''s hard to add ANOTHER item to the list of State Farm donations that nothing will probably/hopefully ever happen to. Plus, sentimental value can''t be replaced.

I appreciate the piece of mind that comes with insurance, though. It only takes a minor lapse in attention, etc. to result in not having the ring anymore. It is a significant purchase so, with insurance, it can at least be replaced as best as possible. With other expenditures on the horizon (eg. wedding, children), donating to State Farm isn''t an enjoyable concept, but it''s only $100/year.

I''ll talk it over with her after the fact since she''ll need to be added to my policy. I''ll have it insured, though, on my own until we decide.
 
Yes, it''s worth it. I''d wear my ring a lot less if it was not insured.
 
Not just loss or theft, but also damage. The ring could be damaged and the stone lost or even broken with just one hard knock. I would recommend insurance, but shop around for the best rate. A rider to your homeowner''s or renter''s policy might be less expensive than separate jewelry insurance. If you do the rider thing, just make sure you keep the appraisal somewhere safe and also upload it to google docs or similar.
 
depends,in our case it would cost us $220 per $10k worth of coverage
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so no,we don''t insure our jewelry.
 
Insurance is about peace of mind.

And it covers not only loss but damage too. Try a search on PS to see how many people have made insurance claims... it is a lot.

I don''t know how much your ring cost, but if it was $5000, then the insurance premium will only equal the cost of the ring in 50 years. That means that the insurance is less expensive than self-insuring (i.e., replacing the diamond yourself) as long as you make a claim within that 50 year time frame. I think the odds of that are high enough to warrant insurance in my book.
 
Date: 4/13/2010 12:17:09 PM
Author: Dancing Fire
depends,in our case it would cost us $220 per $10k worth of coverage
6.gif
so no,we don''t insure our jewelry.
Click to expand...
That''s crazy DF, with higher priced items it is even more important to insure it seems to me!
 
I've always thought the, "if I spend X dollars for insurance for 40 years, then I'll have re-bought the ring" kind of funny. Personally, while I need insurance now, I'll never insure it for that long.

Other than a car and a place to live, my e-ring will be the most expensive purchase of our young-ish lives. To me, it's a big deal... now, and a discretionary item. Would I spend the money to replace it if other things were required? Do I want to self-insure it by not having someone else take the risk for $100/year. Maybe, but probably not at this stage in our lives.

However, while I intend to wear my e-ring everyday now, I know plenty of women who don't wear the flashy, high set ering when they have toddlers. In those years, put it in a safety desposit box and don't spend the insurance for it.

When I get older, I expect my discretionary income will continue to grow. What seems like a lot to me now (hopefully) will not seem like a lot in 10, 15 or 20 years. I can afford to self-insure at that point if I lose or damage my rings for whatever reason.

Plus, while this will be the most expensive piece for me now, I may one day be lucky enough to have a beautiful upgrade. If I end up wearing the upgrade every day, the sentimental ering may go in a safety deposit box, where insurance for it will be promptly cancelled. I can probably afford to self-insure if I only wear it once in a while from the box.... I'll see.

I guess the long and short of it is - judge whether you need insurance on a year by year basis. Life is too long and winding to start complaining about spending 50 years worth of imaginary money on insurance when really, your need for it may exist now.
 
Whether insurance is necessary is a matter of opinion, and a matter of your comfort zone.
Some think yes.
Some think no.

If you pay insurance premiums all your life and never have a claim, then it was not necessary.
If you have a claim, then it was necessary.
Nobody knows whether they will have a claim so nobody knows whether it is necessary.
It is a risk, a gamble.

One things for sure... the odds of having a claim are intensively analyzed by insurance actuaries.
Then the price of premiums are set to cover all of the claims and pay all the company's operating expenses and a tidy profit.
Collectively, we all pay more in premiums than we get back in claims.

So overall the odds are in the house's favor. (same thing with all those extended warranties they try to sell you.)
You could say buying insurance is a sucker's game.
You can also say the peace of mind is worth the cost.
Your decision; there is no wrong answer.

I don't buy diamond insurance or extended warranties.
I only buy the insurance I am required by law to buy. ( I could not afford to pay cash for my house and don't care to tie up $50,000(?) to post as a bond to avoid buying car insurance.)
I don't like industries that exploit and profit off our fears. (I also don't own a gun.)

I understand many do like insurance and that's fine for them.
My opinions, strong as they are, only apply to me.

You ask whether the majority buy insurance.
Even if they do you can be at peace being in the minority.
 
I think proper insurance is important, in the very same manner that we all insure our homes and cars (I know it's not quite a perfect analogy since cars can be involved in accidents and homes need to be insured for the purposes of securing a mortgage).

You don't buy a diamond ring everyday and it will no doubt be one of the more expensive items you will ever own.

Just to give you folks some additional perspective..

We recently sold an engagement ring to a very happy couple. I knew the family and know that her (future) in-laws actually paid for this ring for their son.
I must have advised/encouraged them a 'thousand times' to get the ring independently appraised and insured right away.

PS, they got all caught up in the excitement of the moment and put these tasks on the 'back burner' somewhere.
Shortly after the proposal, they went away together on a vacation for a few days. They were sitting in a restaurant one night and she got up to wash at the washing station. She took off the ring and placed it on the shelf over the sink for a moment and then went back to her seat without remembering to put the ring back on.

She told us that she suddenly remembered the ring - not 30 seconds after sitting down and made a beeline for the sink to retrieve it..and guess what...the ring was gone.

No more ring and no insurance.

To make matters worse (if that's possible), they were scheduled to meet his parents upon their return, when they would be showing off the expensive engagement ring (which the parents paid for) for the very first time!
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.

So they had to scramble to purchase a fake cz engagement ring with same size stone, in an alloy setting version of the real mcCoy, so as to successfully fool his parents while they tried to figure out what to do (pretty much nothing).

It was also quite obvious that this episode had caused a great deal of tension between this couple, who at the cusp of their new union, needed to deal with the fact that she had inadvertently lost an expensive ring, which he didn't pay for and could not afford to replace....
What should I tell you...it wasn't pretty....

This type of scenario, or any number of variations on this theme, can and does happen. Diamond rings are small, are worn all/most of the time and there are many ways and reasons for a stone/ring to be lost, stolen or damaged. When this happens, the ramifications are often (and by definition) more than just the financial repercussions.

To me, proper insurance is a well deserved and important additional expense when buying this type of item.

Can it be said that statistically, most people never wind up taking advantage of their coverage? Sure.
However, you need to ask yourself whether you want to chance becoming a statistic..
 
Insuring a brand new ring for a year or two is sensible especially if you don't know the exact habits of the person who will be wearing it. If they turn out to be the kind of person who rarely loses or damages anything, then insurance might be less important. I have always carried insurance on jewelry which belonged to my clients and to my old wholesale firm, but have never bought insurance on jewelry my wife and I own. I figured I could afford to replace lost items, but looked at the chance to lose it all as extremely slim. I have always invested in a good home alarm system and a secure lock-up for items not being worn. This gives everyone security at night for not only burglary, but for break-ins when you are away from home and for smoke and fire alarms too. A central station alarm is money well spent. I consider it a better investment than jewelry insurance alone. A nice big NRA sticker on the front and back door is also a very heartwarming deterent to a thief who can read. The illiterate thieves are the most difficult ones to deter.
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Date: 4/13/2010 2:11:15 PM
Author: Judah Gutwein
I think proper insurance is important, in the very same manner that we all insure our homes and cars (I know it''s not quite a perfect analogy since cars can be involved in accidents and homes need to be insured for the purposes of securing a mortgage).


You don''t buy a diamond ring everyday and it will no doubt be one of the more expensive items you will ever own.


Just to give you folks some additional perspective..


We recently sold an engagement ring to a very happy couple. I knew the family and know that her (future) in-laws actually paid for this ring for their son.

I must have advised/encouraged them a ''thousand times'' to get the ring independently appraised and insured right away.


PS, they got all caught up in the excitement of the moment and put these tasks on the ''back burner'' somewhere.

Shortly after the proposal, they went away together on a vacation for a few days. They were sitting in a restaurant one night and she got up to wash at the washing station. She took off the ring and placed it on the shelf over the sink for a moment and then went back to her seat without remembering to put the ring back on.


She told us that she suddenly remembered the ring - not 30 seconds after sitting down and made a beeline for the sink to retrieve it..and guess what...the ring was gone.


No more ring and no insurance.


To make matters worse (if that''s possible), they were scheduled to meet his parents upon their return, when they would be showing off the expensive engagement ring (which the parents paid for) for the very first time!
23.gif
.


So they had to scramble to purchase a fake cz engagement ring with same size stone, in an alloy setting version of the real mcCoy, so as to successfully fool his parents while they tried to figure out what to do (pretty much nothing).


It was also quite obvious that this episode had caused a great deal of tension between this couple, who at the cusp of their new union, needed to deal with the fact that she had inadvertently lost an expensive ring, which he didn''t pay for and could not afford to replace....

What should I tell you...it wasn''t pretty....


This type of scenario, or any number of variations on this theme, can and does happen. Diamond rings are small, are worn all/most of the time and there are many ways and reasons for a stone/ring to be lost, stolen or damaged. When this happens, the ramifications are often (and by definition) more than just the financial repercussions.


To me, proper insurance is a well deserved and important additional expense when buying this type of item.


Can it be said that statistically, most people never wind up taking advantage of their coverage? Sure.

However, you need to ask yourself whether you want to chance becoming a statistic..
Click to expand...


What a story, Judah
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I''m very, very careful with my jewellery. I''ve never misplaced or dropped my ring, in the two years I''ve been wearing one. Not once. Without insurance I can guarantee that I''d never misplace or drop it, ever, since it would sit nice and safe in a box in the bank. I need that security for peace of mind.
 
You may want to consider looking into insurance from someone OTHER than your homeowners. I have heard it is more expensive, harder to make a claim, and they ONLY cover theft.

I have Jewelers Mutual, they cover lost, theft, damage pretty much ANYTHING. I think they are more resonable and options for NO deductible.

You have put considerable amount of time finding the right ring, don''t you think you should protect your assest???
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I heard Chubb was the way to go so I called them here in Canada and they were only interested in adding a ring to an existing home policy.

I added the stone I bought to my home policy the day I picked it up although I sent my insurance company a copy of the AGS cert and a copy of the receipt for the stone itself. I am awaiting an appraisal of the ring at ''fair market value'' rather than replacement costy because traditional appraisals jack the price up alot!

I am paying $230 per year per 10K of coverage. YMMV.
 
I can only speak from my very recent heartsickened perspective and my string of BAD LUCK! Years ago, when I was engaged and wore an engagement diamond ring and a diamond right hand ring.....my apt. got broken into and my jewelry box full of old gold pieces was stolen as well as my fiance''s TAG watch, a camera and my soon to wear diamond wedding band was stolen! We had no insurance! Fortunately I always wore my two most expensive rings and they were spared. We had to pick out another wedding band! Hence, we got renter''s insurance and itemized my three rings.

Flash forward to being a stay home mommy with my twin babies.......one of the diamonds feel out of the bezel setting and was lost!!!!!! I was within steps to picking up the phone to submit a claim and my mom found the diamond in the rug under the johnny jumper!!!!! I had the ring repaired and continued to wear my rings. I was relieved that I could have replaced the diamond if it wasn''t found as we would definately not been able to afford replacing it without insurance!!!

Flash forward to just this past Feb. I''ve returned to work (in healthcare in which I have to on occasion remove my rings for a procedure(s). I lost my rings at work! ALL THREE. I absolutely would not be able to afford replacing these rings. I have beated myself up over losing them. THANK HEAVENS I HAD THEM INSURED. THANK HEAVENS MY HUSBAND TELLS ME THIS IS WHY WE HAVE INSURANCE. They were worth more than I could ever replace now that we are tied up in mortgage and supporting a family of 4.

A couple things I''ve learned about insurance: 1. make sure your appraisals are not over-inflated! Only insure your jewels for the amount it would cost your insurance company to replace them as this is all you will get! 2. If you payed for designer pieces, your insurance company will replicate it but may not get you the label brand! 3. You must have your appraisals updated every 3-5 years or you will lose in appreciation value.

After what I''ve been through, a part of me feels.....it really costs to have nice things. So, either keep your life simple and avoid the complexities of luxury or pay for it. My rings really were a part of me and deserve to replace them......and my hand eagerly awaits the ring which is currently being made for it! And yes.....I''ll DEFINATELY have insurance with my track record!!!!!!!!
 
My husband works in insurance and he says insurance is for one thing: Peace of mind.

For me, I have a "no extended warranties or insurance" policy for almost all items, but we still have homeowners insurance and car insurance (both required by law and or the terms of our mortgage) and I insure my ring. Why my ring? Peace of mind.
 
Have insurance for peace of mind. Costs ~$400/YR with homeowners (insured for ~$32k)..that''s $33month. Most people have digital cable or cell phones that cost more money. Thus, it would take 60 YEARS before I paid for another ring with the same specs (it''s insured for the appraised value vs. actual cost).

So to me, it''s definitely worth it.

I found that jeweler''s mutual and Chubb are WAY more expensive then a rider on your homeowners. My policy will give me $32k towards a new ring of my choosing if I ever file a claim and that''s all I ask for.
 
I do think it is pretty inexpensive to add to your Homeowner (or Tenant) Policy as there is a higher premium base overall.

It all depends on the value of the rings, your own financial situation and so forth, in my own opinion. My rings are not insured as they simply are not that costly to replace, I don't have an expensive stone and I am pretty cautious about what I do with it. And if I damaged the stone - again, it is not a costly one to replace. My "self insurance" is not owning very expensive jewelery in the first place - ha! That is not a self insurance policy most PS members would go for!

That being said, as a comparison, I have some expensive bikes (well, down to one now!). I used to pay an extra $400 a year to insure them as my homeowner policy would only cover $500. No wear NEAR the cost of replacing a $5-10,000 bike (never mind 3 or 4 of them!)! It was worth it to me to insure them FOR peace of mind. Bikes get stolen and it was important to me to have that peace of mind that I could get a new one (or 3 or 4 of them!) without extra expense should it be taken. I never had to make a claim...but I enjoyed my bikes and felt good knowing I had the insurance just in case. Now I don't pay extra as I am down to one bike that was originally bought for $7,500 and can replace it without too much strain on my budget to do so, if I wanted as I would be willing at this point to go with a less expensive bike for my current usage (as I do more running and the biking is not AS much a focus anymore). Not everyone is willing to go to a smaller diamond or so on if the first one is lost or damaged and would want insurance......some may be alright not buying another at all as the original sentimental value is lost and not be too worried about insurance.

There are people who of course wear rings that are valued at tens of thousands of dollars - or more. In that case it does not make sense to me NOT to insure it, just as they would a car, or so on. In that position I WOULD certainly insure it. But that is me...and knowing my lifestyle and my preferences for peace of mind. I would be likely to chip it, even if I never managed to lose it. And generally if you are spending that much money on a ring, I hope that you have room in your budget for an extra $100-200 a year and have not spent it all on the ring!

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I have the same philosophy as RaiKai - I don''t own anything (besides our house) that would be too costly for me to replace. However, that is because of the jewelry and other material choices that I''ve made.
It really depends on the cost of the ring, and your financial situation.
 
Date: 4/13/2010 12:31:21 PM
Author: dreamer_d


Date: 4/13/2010 12:17:09 PM
Author: Dancing Fire
depends,in our case it would cost us $220 per $10k worth of coverage
6.gif
so no,we don't insure our jewelry.
Click to expand...
That's crazy DF, with higher priced items it is even more important to insure it seems to me!
Click to expand...
but where do i drawl the line? insure my wife's rings but not my watches? insure her 3.34ct ring which she hardly ever wears? or should we only insure her 1.15ct ring and her 5 stone ring? how about her diamond tennis bracelets,her diamond earrings?
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I see a diamond as a luxury.
If it goes away I'd miss it, but I would not be financially devastated.

At least I got to enjoy a beautiful treasure for a while.
Plus we are enjoying the $1000 per year we save by not paying premiums.

After 10 years we could buy another $10,000 Octavia with the savings.
 
Date: 4/13/2010 9:10:27 PM
Author: Dancing Fire
Date: 4/13/2010 12:31:21 PM

Author: dreamer_d



Date: 4/13/2010 12:17:09 PM

Author: Dancing Fire

depends,in our case it would cost us $220 per $10k worth of coverage
6.gif
so no,we don''t insure our jewelry.
Click to expand...

That''s crazy DF, with higher priced items it is even more important to insure it seems to me!
Click to expand...
but where do i drawl the line? insure my wife''s rings but not my watches? insure her 3.34ct ring which she hardly ever wears? or should we only insure her 1.15ct ring and her 5 stone ring? how about her diamond tennis bracelets,her diamond earrings?
Idunno1.gif
Click to expand...


The watches! Insure the watches! Those would be much harder to replace, I would guess, than a diamond ring -- based on the watch in your avatar. But I would insure the rings your wife wears the most, too.

I do agree that once you own a certain amount of fine jewelry, compromises might have to be made -- it would be cost prohibitive to insure all of it. And it might not be the wisest use of your money if not all of the jewelry is worn regularly.
 
I just got a quote from my homeowners on a $6K engagement ring. $49 per year. I''ll gladly pay that.
 
I’m with DD, insurance is about peace of mind. On a purely financial view, it’s probably a bad deal as outlined by Kenny above unless your know your own risk profile to be substantially higher than what you expect the insurance company is using in their charts. (ie. You know more about whether you’re careless or otherwise risky than they do). The real value for most people comes in the effect that it has on your enjoyment of the piece. If wearing it without insurance causes you to worry about it constantly, to leave it in the bank because you’re afraid to wear it, or some similar thing, that’s significantly reducing the whole point of owning it in the first place. For those folks, insurance is a terrific value. It's a mandatory part in getting enjoyment out of the piece. For those who will do whatever they want anyway, and who can afford (or are willing to simply to accept) a loss if one comes along, it’s probably not such a swell deal.

Most insurance premiums are 1-3% of the declared value so the time it takes to 'save' enough on premiums to pay off a new ring will be 30-100 years if we don't get into compounding and inflation questions. You need to decide if your risk is greater than that but the Insurer is betting against and, on average, they win their bets. That's how they make a profit. It also will depend on the appraisal you submit for the insurer. The rates are based as a percentage of your declared value, which may or may not be similar to your cost. Often people choose to get a policy using a value that they KNOW to be seriously inflated and it's easy to double or even triple your rates for the same coverage this way.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver
 
Date: 4/13/2010 9:20:04 PM
Author: kenny
I see a diamond as a luxury.
If it goes away I''d miss it, but I would not be financially devastated.

At least I got to enjoy a beautiful treasure for a while.
Plus we are enjoying the $1000 per year we save by not paying premiums.

After 10 years we could buy another $10,000 Octavia with the savings.
Click to expand...
yep,that''s how i see it too.
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To state the obvious - I think DF and Kenny are in quite a different position than the 20-somethings who go out to buy their first and most valuable piece of jewelry - or simply, the most valuable thing they own at this point in their lives.
 
Date: 4/13/2010 11:24:49 PM
Author: jackers
I just got a quote from my homeowners on a $6K engagement ring. $49 per year. I''ll gladly pay that.
Click to expand...
What insurance company are you with by the way?

I just got a quote for my ~$6k e-ring from State Farm with whom I already have auto and home owners:
No deductible - $87.00 yearly
100 deductible - $79.00 yearly
250 deductible - $70.00 yearly
500 deductible - $61.00 yearly

My inner nerd is plotting the quotes to see which would be better, although it''s hard to determine when I think she''ll lose it...
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