Burgled bling: adequately insuring gold jewelry

By Michele Lerner Posted : 11/04/2011

robber looking at jewelryGold is becoming such a hot commodity that thieves are yanking gold necklaces right off the necks of people in Broward County, Fla.

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"We call it chain snatching. It's when suspects go right up to the victim and snatch jewelry right off the body," says Keyla Concepcion, public information officer for the Broward County Sheriff's Office. "For the period of three months -- June July and August of last year -- we had no such incidents. This year, for the same three-month period, we had 50."

Gold prices are soaring this year, fluctuating between $1,400 and $1,900 per ounce. In 2000, gold hovered around $280 per ounce, according to Kitco.com, a precious metals industry website. (It's not just gold that has spiked in value: silver prices averaged $5 per ounce in 2000 and now average $30 per ounce. Platinum prices have risen from an average of $525 in 2010 to between $1,550 and $1,700 in 2011.)

This jump in gold prices could mean your jewelry is not sufficiently covered under your current homeowner insurance plan if you haven't reviewed it within the past three years or so.

One thing's for sure -- the dramatic spike in gold prices apparently hasn't gone unnoticed by thieves. There have been reports across the country, for instance in Colorado, Ohio and Washington, of burglars breaking into homes and stealing gold jewelry, leaving high-priced electronics and other valuable items behind.

This is leading police in many areas -- cities such as Los Angeles and Pueblo, Colo., and counties such as Island County in Washington and Lake County in Ohio--to suspect that the high price of gold, combined with a faltering economy, is spurring an uptick in gold thefts from houses.

In Broward County, detectives in the Sheriff's Office just conducted an undercover sting dubbed "Operation Melt Down" after seeing a significant increase in the number of chain snatchings. The operation was designed to stem the illegal purchase of stolen gold jewelry, which in turn would prevent people from stealing it, Concepcion says.

"'Operation Melt Down' was created because people know the price of gold is going up, up, up. And then the plan, of course, is to sell it," she says. "If there's no place to sell it, it doesn't become a hot item to steal."

In Cherokee County, Ga., commissioners in May passed an ordinance requiring gold buyers to fingerprint anyone selling gold and send their names and personal information to the Sheriff's Office.

5 golden rings: are they adequately insured?

Despite efforts to prevent thefts, surging gold and silver prices and anecdotal evidence that it's triggering a rash of robberies mean you'd be wise to make sure your rings, bracelets, necklaces and other jewelry are adequately insured.

Unsure what kind of coverage you have for your jewelry or silver? Start to find out by checking your insurance policy.

"The first thing you should do is call your insurance company to discuss your coverage," says Alicia Charles-St. Juste, a senior assistant vice president of sales and client services with Amica Mutual Insurance Co. in Lincoln, R.I.

General homeowner insurance, endorsement or blanket coverage?

The most important thing to determine is whether or not your valuable items are covered under your general home insurance policy, or if you have special coverage for those items.

"If you have not separately covered your jewelry or silverware, your insurance coverage is usually limited to $1,500, $2,500 or $5,000 per item, which varies by company and according to your policy," says Mario Morales, manager of corporate underwriting for MetLife Auto & Home in Warwick, R.I. "You will need to pay your deductible, too, which reduces the amount you will receive as reimbursement for a theft."

Keeping your jewelry under your general insurance policy means you are covered only for theft, not for a lost item, Morales says. He recommends insuring special possessions such as jewelry as a scheduled item, personal property floater or endorsement – interchangeable terms used by insurance companies to describe extra insurance coverage.

"With an endorsement, you are purchasing comprehensive coverage that typically covers any damage or loss to the item except something that is specifically excluded," says Morales. "In most cases, this means that the only thing not covered would be wear-and-tear."

You could simply cover your jewelry under your standard homeowner insurance policy as long as each item is valued at less than the basic covered amount listed in your policy. But, there are other benefits aside from theft coverage that make taking the extra step to endorse specific items worthwhile.

Morales says most insurance companies do not set a minimum coverage amount for endorsements, which typically means you can get an endorsement on any item regardless of its value.

Another benefit of endorsements: they usually do not have a deductible, Morales says. So, if your general homeowner policy deductible is $500 or $1,000 or more, you won't have to pay that amount out of pocket if you claim a loss on jewelry covered by an endorsement.

Endorsements are also relatively inexpensive, says Morales. They cost $2 to $15 annually per $1,000 of insured value. An endorsement on a $5,000 ring would cost $10 to $75 added to your home insurance premiums each year.

There is also a third option beyond general homeowner and endorsements for insuring your jewelry.

"Homeowners can also choose the option from some insurance companies of 'blanket limits,' such as $10,000 of jewelry coverage, or whatever you choose, which could be used to cover multiple pieces of jewelry with smaller dollar values," says Morales. "Although you could avoid getting an appraisal on each item, you would still need some kind of documentation of the items if you needed to make a claim."

Estimating value of your gold and other items

When insuring your personal property, you need to determine the value of your goods and document it. Charles-St. Juste says the simplest place to start is with a receipt. However, if you bought your jewelry more than a year ago or lack a receipt, you may need an appraisal.

"We've all seen 'Antiques Roadshow,' so we know that most people have no idea what something is worth," says Charles-St. Juste. "You can go to a local jeweler who is qualified to give an appraisal, someone who is willing to provide a detailed written description of the item, including the type of gold or the cut of the jewel. Usually this kind of appraisal comes with a seal stamped onto the letter from the jeweler."

Most insurance companies can recommend a responsible appraiser to their customers.

"If your item is regularly available from retail stores, such as a particular make and model of a watch, you can go on a retailer's website and check the price there," says Morales. "You'll have to work with your insurance agent to determine what type of appraisal is acceptable. An insurance company can also work with you if you have an original bill of sale and want to estimate the current value, but usually an appraisal is required for a unique item."

Morales points out that it is in your best interest to get an accurate appraisal of your jewelry and other valuables because you will have to substantiate the value in some way if there is a loss.

"If you do have a loss, the claims department will work with you to try to document the loss," says Morales. "We need some evidence of the item to validate its existence and the claims department will likely need to investigate any claim, no matter what type of coverage you have."

Annual review

Even though prices of commodities such as gold fluctuate constantly, you may not want to get an appraisal done too often. Morales suggests using the annual renewal of your home insurance policy as a trigger to remind you to review your coverage and perhaps get an appraisal of special items.

"Probably, evaluating your special items every few years is good enough because it can be hard to keep up with getting an appraisal annually," says Charles-St. Juste.

 

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