Yesterday gold prices hit an all-time high of $1800 per troy ounce and in just the past two years the price of gold has nearly doubled. You may be thinking, thank you for the economic update but what does this have to do with insurance? Actually, it means your engagement ring, anniversary present or family heirloom may be drastically under-insured.
Gold Prices July 2009 - July 2011
Let’s say you bought a $5,000 ring when you got engaged in 2009. Since you read our prior blog “Jewerly Insurance: You May Have Less than You Think!”, you already knew that a standard PA homeowner or renter insurance policy only has a $1,500 theft limitation on jewelry and you chose to buy a personal articles policy to insure the ring for the full $5,000. Your thinking this is great news, because if the ring gets lost or stolen you get another $5,000 to buy the same ring. No damage done.
Now fast forward two years where the price of gold and many other precious metals have skyrocketed and the same ring is worth $8,000. Guess what happens if the engagement ring is lost or stolen now? You get a “smaller” ring because the maximum your policy will pay is $5,000. I know that is not news I would be happy to hear or deliver to my wife!
What should I Do?
If you currently have jewelry scheduled or on a personal article policy, like in the example above, call your agent and get an updated appraisal. Having jewelry insured for an appraised value from just a year or two ago could leave you very disappointed if you need to file a claim today.
Even if you do not have any scheduled jewelry, make sure your total amount of jewelry does not exceed the standard PA homeowner and renter insurance policy theft limit of $1,500. If it does, look into raising the theft limit above $1,500 on your homeowner or renter policy or place some of the jewelry on a personal articles policy.
Overall, this is just another example of why it is important to review your insurance on an annual basis with an agent. Things change in life, like the price of gold, and most people don’t even realize it actually impacts their insurance.