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The Color of Money

If you splurge on jewelry this Valentine’s Day, don’t forget to insure it

By Michelle Singletary
February 6, 2011

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We may be going through a tough economy, but many guys know they had better buy something for their sweetie come Valentine’s Day. Yes, I know that sounds sexist. But let’s keep it real. Men spend the most and have to endure the guilt trips if they neglect to buy chocolate, dinner, or diamonds on this retail-driven holiday.

As usual, men plan to spend, on average, more than twice as much ($158.71) as women ($75.79), according to a National Retail Federation survey.

Then there are the guys who will propose on Valentine’s Day. I hope they aren’t listening to that nonsense that they have to spend two to three times their monthly salary on an engagement ring. Nonetheless, the average amount spent on a ring is nearly $6,000, according to The Knot Wedding Network.

So here’s some advice you might not think of as you’re shopping for bling: Don’t forget to insure it.

Seventeen percent of shoppers will buy jewelry this Valentine’s Day, according to the retail federation. IBISWorld expects jewelry to make up nearly 8 percent of all Valentine’s Day sales.

In a survey conducted for the Hartford Financial Services Group, almost one-fifth of respondents said they have lost an expensive piece of jewelry or watch. And more than three-quarters who lost a valuable said it was not insured. In fact, after receiving a gift, 95 percent said they have not changed their insurance to cover the expensive item.

Lisa Lobo, consumer insurance expert for Hartford, and Bob Passmore, of the Property Casualty Insurers Association of America, offer these tips when buying pricey jewelry:

■ Check to see if the gift may be covered under the person’s homeowners or rental policy. A homeowner’s basic policy will typically have a $1,500 jewelry limit as coverage for theft regardless of the item’s value or how many pieces you have, Lobo said.

■ To be sure that all your jewelry is covered for any type of loss, get extended coverage. You can get an add-on to your current policy or a separate policy.

Also consider getting scheduled personal property coverage. This broader policy would give you full coverage for your jewelry on most types of losses.

■ If you don’t opt for a rider or higher coverage, be clear under what circumstances you can file a claim with your basic policy.

■ Get an appraisal. Although you might not need one under a basic policy, it’s good to get a written appraisal at the time of purchase, Passmore said.

■ Be clear about your deductible. It will apply to a jewelry claim on the basic policy. With the scheduled personal property coverage you would not typically have to pay a deductible, Lobo said.

I know this isn’t very romantic. But if you’re going to spend big bucks for jewelry, you ought to be sure your sweetie can replace it if it’s lost, stolen, or goes down the kitchen drain.

Michelle Singletary is a columnist for The Washington Post. She can be reached at singletarym@washpost.com.

SOURCE: Bloomberg News