Valentine’s Day is coming up, and while some lovers will gift chocolates, flowers and teddy bears, others may spring for an engagement ring.
Before you get down on one knee, though, know this: rings should be more than sparkly — they should be protected, too. Not only are they a token of strong love and emotions, but they’re expensive. The average engagement ring cost $ 5,871 in 2015, according to wedding site The Knot. If lost or stolen, an engagement ring may not be easy to replace financially, let alone emotionally.
“It is one of the first major purchases that you’ve made if you’re getting married in your 20s, or even if you’re older,” said Liz Deziel, a wealth coach at U.S. Bank. “If you did lose that ring, think about the severity of that loss and what it would cost to replace.”
More than half of people surveyed lost a piece of jewelry in 2012 that was either emotionally or monetarily valuable, according to a Jewelers Mutual Insurance Company survey — with no piece worth more than $ 5,000. Two-thirds of the women respondents said they did not replace the pieces because they did not have insurance to cover the loss.
Of course not everyone getting engaged or married is wearing an expensive ring, or one at all for that matter, and prices for rings vary depending on the stone, band and jeweler. The overall popularity of such rings have even waned in recent months, some jewelry companies say, possibly because people are more focused on current events, such as the 2016 presidential election, than a wedding.
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Here are financial considerations to make when you’re ready to pop the question:
Look through various insurance policies
Rings are often insured under homeowners or renter’s insurance policies, but there’s usually a limit of around $ 1,000 with possible endorsements for up to $ 2,500 or $ 5,000, said Ed Charlebois, vice president of personal insurance at New York-based insurance company Travelers Insurance TRV, +0.98% which offers personal insurance for valuables including jewelry, silverware, antiques and trophies. Some insurance companies offer ‘floater’ insurance policies that can be for just the ring, though, and then there are companies such as Neenah, Wisc.-based Jewelers Mutual, which Geico BRK.A, +0.07% has partnered with to offer such policies, that specializes in jewelry insurance. A general rule of thumb for jewelry insurance is to spend $ 1 to $ 2 for every $ 100 the jewelry is worth, according to jeweler Signet Jewelers’ SIG, -0.97% website Jewelry Wise, where a $ 2,000 ring might cost $ 40 a year to insure. You can opt for a lower deductible, which means you’ll pay less to replace the ring if it were lost or stolen, but that means a higher monthly payment to insure.
Get an appraisal
You can insure the ring for either the amount you paid, which you’ll need a receipt for, or the price it is appraised for, which can be higher or lower than what you paid. If you go for blanket personal property coverage, such as under homeowners or renter’s insurance, you don’t need to describe the jewelry in detail, but if you get a policy specifically for it, you’ll need an appraisal. Without an appraisal, you may not get the same amount of money you paid back.
Keep the ring safe
Whether it’s in your pocket before a proposal or on your loved one’s finger after it, the ring should always be kept safe. Keep the ring in a safety deposit box or with a jeweler before asking the big question, and store it in a safe place after it’s been given and if it’s taken off to go on vacation or in a pool. Another Jewelers Mutual survey found 60% of rings were not insured prior to a proposal and another 60% of rings were left at home, which runs the risk of loss or theft.