Additional jewelry coverage is needed for low homeowners insurance limits

Homeowners insurance covers up to $2,500 for jewelry. FG Trade/Getty Images

• Homeowners insurance usually has low limits on jewelry coverage. 
• For additional coverage, purchase a personal property floater or personal jewelry insurance.
• To qualify for a floater or personal jewelry insurance, you will need to get your jewelry appraised.
• Check out Insider's top picks for the best homeowners insurance companies in 2022.

Jewelry is probably one of the most expensive items many people own. While homeowners insurance policies will cover jewelry, your policy will cover up to a certain amount — usually not enough to replace or repair your jewelry.  

To protect your investments completely, you'll need special coverage beyond your homeowners policy in the form of a special personal property floater or a standalone jewelry insurance policy. 

Does homeowners insurance cover lost jewelry? 

Homeowners insurance has three components: dwelling coverage, personal property coverage, and personal liability coverage. There are several types of homeowners policies based on the type of property you're insuring, but they all fall within two categories: named peril policies or open peril policies.

A named-peril policy covers listed events, like a fire, storm, or theft. An open peril policy covers any damages to your home not explicitly listed unless your policy notes that it's not covered. Jewelry would fall under personal property coverage, which covers your belongings if damage results from a named peril.

How much jewelry coverage does a home insurance policy offer?

Steve Wilson, senior underwriting manager at Hippo Insurance, told Insider that "coverage is built into homeowner policies for jewelry up to $2,500." 

Coverages also vary for different perils. For instance, theft tends to be a common peril for lost jewelry. So insurers offer lower limits for liability related to theft — about $1,500, according to the Insurance Information Institute (III).

How to get extra insurance coverage for your jewelry

One option to get more jewelry coverage is to raise your personal property limit. However, there are still limits on the amounts for individual pieces and overall losses, according to the III. 

The second option is to purchase a floater policy for your homeowners insurance. The III notes that although this option is more expensive, it offers the broadest coverage. Unlike the standard personal property coverage, floaters will cover accidental losses if you lose an expensive item. Your insurance company will appraise your jewelry before you can purchase a floater.

Another option is to purchase personal jewelry insurance. Bryan Howard, director of product management for Jewelers Mutual, told Business Insider, "a standalone jewelry policy is a comprehensive, all perils policy, meaning it covers every type of loss unless specifically excluded."

With standalone jewelry insurance, you must have your jewelry appraised by your insurer. Howard noted that the premium for personal jewelry insurance is typically 1-2% of the item value. Premiums also vary based on where you live, the person who owns the jewelry, and the deductible you choose.

Homeowners insurance vs. Personal property floater vs. Jewelry insurance

There are two major differences between a floater and jewelry insurance. If you file a claim under a floater, it may impact your rates for your homeowners policy. However, your homeowners insurance rates won't fluctuate if you have a standalone personal jewelry insurance.

Secondly, your homeowners insurance and floater policy may require you to use their authorized jeweler to repair or replace your item. However, standalone personal jewelry insurance will work with the jeweler of your choice to replace or repair jewelry.

Howard says some jewelers offer a warranty against manufacturer defects, but this is usually not included with a floater or personal jewelry insurance.

Here's how jewelry coverage with homeowners insurance, a floater policy, and a standalone jewelry insurance policy such as Jewelers Mutual stacks up. 

*Subject to liability limits

**Depends on policy

Data from Jewelers Mutual

Should you get additional insurance for your jewelry?

If the value of your jewelry is above your homeowners insurance personal property limits, consider purchasing a floater policy

or a separate personal jewelry policy. 

Additionally, if you have custom jewelry or heirloom pieces, like an engagement ring, watch, or necklace, consider buying a separate policy or floater to protect your items. 

To qualify for a floater and personal jewelry insurance, you must get an appraisal for your jewelry. Typically, your jeweler will refer you to an appraisal company. If you do not have an appraisal, receipts for the items are acceptable.

How to file a claim if your jewelry is lost or stolen

Losing an expensive item like your jewelry can be frustrating. However, having adequate insurance will give you the peace of mind that you can reclaim the monetary value of your loss or damaged belonging. Here are the steps you can take to file a file a claim.

1. Notify the police and file a police report if your jewelry was stolen. Your insurance company may request a copy of the police report.
2. Take pictures of damaged possessions and what caused the damage (fire, storm, etc.).
3. Contact your homeowners insurance company. Failure to notify your insurance provider promptly can result in denial of your claim. 
4. If you have a standalone jewelry policy, contact your provider. 

If you insured your jewelry through your homeowners or a floater policy, you may be required to use a jeweler of their choosing. However, if you have personal jewelry insurance, you will be allowed to have your jewelry repaired or replaced at your chosen jeweler. Your jewelry will be covered for the appraised value minus any deductible.