No one wants to lose their precious jewels, but you'll ease the pain if it does happen by choosing the right home and contents insurance cover. It's important to check the fine print when it comes to insuring your diamonds and pearls - that way you'll avoid being under-insured if you need to make a claim.

Contents insurance - does it cover my jewels?

Your home and contents policy might have a sizeable allowance for contents theft, but to make sure any jewellery is properly covered you need to specify each piece on the policy. The default option generally covers theft from your home only, but optional cover is often available for loss of valuables when you're away from home.

How much is your bling worth?

Aunt Bessie's antique ruby ring may be priceless to you, but to get the right payout you'll need to prove its value to an insurer. Have each item assessed by a professional valuer, and shop around for a valuation as there can be big differences in cost, especially for expensive jewellery.

Keep any receipts and valuation certificates somewhere safe because you'll need to supply proof of ownership when making a claim.

How will they pay?

Insurers get big discounts via agreements with bulk jewellery suppliers. So if you do need to claim, they may offer you a credit at their preferred store instead of a cash settlement. If you've specified a particular jeweller your insurer may agree to this, but if you just want the money, the insurer may only offer the item's wholesale value.

Real life claims

Here are two examples illustrating the problems you can encounter when making a claim.

Case study 1

"We discovered on the weekend we were secretively and sneakily burgled. The thief stole a lifetime collection of valuable gold and diamond jewellery conservatively estimated at $20,000 in total. I found out the maximum my insurance will give me is $4900 (minus excess) – much less than my loss."

This person did most things right:

  • Insurance was up to date
  • Jewellery was stored away safely
  • A police report was filed as soon as the loss was discovered
  • There was photo evidence and valuations
The problem:
  • Most policies place limits on high-value items, unless you specifically apply for a higher limit. Doing this will probably affect your premium, but in the event of a claim it's usually worth it.
  • Since there was no sign of forced entry, there is a possibility that the insurer could deny the claim on the basis that the thief was invited onto the property at some point.

Case study 2

Marie (not her real name) lost all her jewellery when her home was broken into. The items had a total value of $7700, including her $3000 engagement ring.
The problem:
  • When taking out the policy Marie was assured by the company that all her jewellery was covered. Upon making the claim Marie was advised the jewellery limit on her policy was only $2000.
  • Her appeal to the Insurance Ombudsman wasn't successful. The panel said it wasn't possible to establish the details of the conversation between Marie and the insurer's customer service department and they must therefore rely on the conditions in her policy.

Jewellery insurance 101

To make sure you're covered properly:

  • Check your contents policy for per item and total limits
  • Specify valuable items for additional cover
  • Check what proof you need for a claim, such as receipts, close-up photographs or valuation certificates.
  • Get a certificate from a registered valuer.
  • Let them know the valuation is for insurance purposes and where you would usually shop to replace the jewellery.