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Insuring a diamond takes a bit of shopping around, some thought, and some planning. Diamond insurance is not like purchasing auto insurance. It is really quite different. Depending on the area you live in, there are three basic types of policies that will cover diamonds. All insurance policies that cover diamonds are considered to be Marine type policies.
The first kind of insurance policy for diamonds is an Actual Cash Value policy. In the case that the diamond is lost or damaged beyond repair, the insurance company will replace the diamond at the current market value, regardless of how much you paid for the diamond to begin with. This kind of diamond insurance policy is actually not that common.
The popular type of insurance for diamonds is Replacement Value insurance. The insurance company will pay only up to a fixed dollar amount to replace the diamond that is damaged beyond repair or lost. They won’t necessarily pay the amount listed; they will probably pay up to that amount. In a lot of cases, the diamond can be replaced at a lower cost.
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The third kind of diamond insurance coverage is Agreed Value, sometimes called “Valued At.” This type of coverage is quite rare. If the diamond is lost or damaged beyond repair, the insurance company simply pays you the amount that you and your insurance company agreed on. This is probably best type of insurance to have, but it is not offered very often. 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 keep in mind that insurance agents are not qualified jewelers and that jewelers are not qualified insurance agents. It is a good idea to get a certificate for your diamond and also to provide the insurance company with a copy of the certificate. This will leave the insurance company with less room for arguments about the actual value of the diamond.
Do not rely on separate coverage to protect your diamond. For example, if you diamond gets stolen from your house, it is most likely covered on your home owner’s insurance policy. But the diamond probably will not be in your home all the time (i.e. a ring on a finger), and you take it from your home, there is no coverage.
Now wasn’t that easy and fun? And you’ve earned a wealth of knowledge, just from taking a little time to study a small article about diamonds.