Diamond insurance is quite different from most other types of insurances. Insuring a diamond takes a bit of thinking, shopping around and planning. The insurance policies that cover diamonds are marine type policies, and there are basically there are three different types of policies:
1. Actual Cash Value Policy – This is not a common policy. If the diamond is lost or damaged beyond repair, no matter how much you’ve paid for the diamond to begin with, the insurance company will replace it with today’s market value.
2. 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 which means that they will pay that amount. In most cases, the diamond can be replaced at a lower cost. This is the most common type of insurance for diamonds.
3. Agreed Value – In the event that the diamond is lost or damaged beyond repair, the insurance company simply pays the amount that you and the company agreed upon. This is the best type of insurance to acquire, but it is rarely offered. This insurance policy is sometimes called “Value At”. Remember if you cannot get Agreed Value coverage, Actual Cash Value should be your next choice.
The insurance companies will always determine the rates by the value of the diamond, the type of coverage you’ve selected and the area that you live in. If you live in a high crime rate area, expect to pay more for the insurance coverage.
It is best to get a certificate for your diamond and to provide a copy for the insurance company so that leaves the insurance company less room for arguments over the actual value of the diamond.
Always remember that insurance agents are not qualified jewelers, and jewelers are not qualified insurance agents. Another thing to note: do not rely on separate coverage to cover your diamond.