Protect Your Valentine Diamond

Lucky you. Your amorous, jewelry-buying dearest bought you a ring for Valentine’s Day. No matter how unromantic it may sound, that means it’s time to review your home-owners insurance.

Most policies cap coverage for specific categories of possessions. For example, the limit for jewelry is usually about $1,000 (at $3,500, the average engagement ring in the U.S. is worth more than three times that much). “Even if you have a great home-owners policy, as soon as you walk out of the jewelry store, you have very limited coverage,” says Madelyn Flannagan, vice-president of the Independent Insurance Agents & Brokers of America.

To make sure your bling is protected, talk with your agent about adding a floater to your homeowners policy. A floater will insure full replacement of the item in case of theft, damage or accidental loss. There’s no separate deductible, but figure a jewelry floater will boost your premium about $5 to $15 a year per $1,000 of coverage.

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Now take stock of your home for other valuables and make an inventory (you can use the Insurance Information Institute’s free software at www.knowyourstuff.org). Consider adding coverage for anything with an estimated replacement value of more than $2,000. (A fur coat, for example, may be limited under your policy to about $1,500 of coverage.) Oriental rugs, artwork and antiques may not have specific limits, but most policies will cover the value of all your possessions only up to 50% of the policy’s value -- or $150,000 worth for a $300,000 policy.

A complete inventory will help you confirm that you have adequate coverage and make future claims easier. You may need to reappraise your valuables as the cost of gold and gems rises (and some insurers require periodic appraisals). To find a reputable appraiser, go to the American Society of Appraisers’ Web site (www.appraisers.org). Sorry, sentimental value can’t be insured.