Insure against heartbreaking loss after Valentine's Day
By Faith Archer 13.02.12
Valentine's Day is almost here so if you're thinking about proposing, ensure you give your home insurance some thought.
With Valentine's Day just around the corner, anyone planning a romantic proposal might also want to consider the more prosaic implications for their home insurance.
Check the single item limit
The diamond industry has done a brilliant job of promoting the idea that an engagement ring should cost at least one month's salary. Given such expense, the ring that brings a sparkle to your fiancée's eye might not be covered if it catches the eye of a burglar.
Many policies have limits on the value of single items that will be covered, so check the small print on your home insurance. If your ring is worth more than the limit, then it should be listed individually on the policy.
Mike Powell, insight analyst at statisticians Defaqto, says: "Around a third of standard home contents policies state that they have a valuables single item limit of £1,500 or less for items kept in the home. This means that you need to specify any 'valuable' that is worth more than £1,500 to ensure that full cover is given."
Since one in 20 engagement rings are lost or stolen, according to research by insurer LV=, adding an engagement ring to your contents insurance policy could remove the financial anguish from the heartbreak of losing such a sentimental item.
Make sure your ring is covered outside the home
It's important to make sure you have personal possessions cover included on your home insurance policy to ensure your ring will be protected when you take it outside the home.
Generally, most insurance providers will cover your personal possessions anywhere in the world, but make sure your most precious possessions are covered if you are planning a lengthy or particularly exotic trip.
Mr Powell warned: "Some insurance providers state that cover is only provided within the policy 'geographical limits' and for a specific number of days anywhere in the world.
"For example, cover is only given for 60 days in any one period of insurance for personal possessions taken anywhere in the world."
Anyone planning a proposal abroad should ensure the ring is covered by their contents insurance, as travel insurance will not typically provide enough cover.
Get your ring valued
Even if your engagement is just a distant memory, your ring may now be worth substantially more than when it was purchased, due to the soaring price of precious stones and metals such as gold and silver.
For example, the price of gold rose by 10% during 2011, and gold is now worth almost six times as much as it was ten years ago, as the price per ounce has rocketed from less than $300 to more than $1,700, according to precious metals market information provider Kitco.com.
John O'Roarke, managing director of LV= home insurance, says: "What many couples may not realise is that the price of diamonds and precious metals has increased dramatically recently and they may find themselves out of pocket if the ring is lost or stolen."
Few people choose to get their engagement ring professionally valued, meaning they might not be insured for the full value of the ring if they need to make an insurance claim.
Instead, David Wells, head of insurance at M&S Money, advises anyone with jewellery they suspect may have risen in value to get it re-valued and then check whether it is still covered by their insurance policy.
To find out what your ring might be worth, look for a reputable jeweller with a National Association of Goldsmiths (NAG) registered valuer, and then make sure it is insured for the right price.
Checklist on insuring an engagement ring
- Check whether your policy has a single item limit and specific limits on unspecified items
- Contact your home insurer to let them know about your new ring
- See if your policy covers rings and other valuables when you are outside the home
- Get a professional valuation every three to five years to make sure you have the correct level of insurance cover
- Keep hold of receipts, valuations and photographs to help demonstrate the value should you need to claim.