Engagement rings are expensive, can be lost, and should be insured. But who pays for the insurance and what makes the most sense?
An Engagement Ring is a Matter of Insurable Interest…
When you purchase something valuable for someone and want to insure the item, you create insurable interest.
Insurable interest means that you don’t possess the item, but have an interest in it, and therefore want to insure it for some period.
Make Use of the Ring Conditional to Maintain Insurable Interest
The easiest way to create insurable interest for the person in possession of the ring is to make the use of the ring by them conditional. This means you own the ring and it doesn’t become your future spouse’s property until you are married.
Until the marriage, you have an insurable interest and can cover the ring under your homeowners insurance policy.
Be Careful about Coverage Limitations
An engagement ring should be scheduled on your homeowners insurance policy. However, most homeowners policies limit theft of jewelry to about $1,500.
Alternatively, Your Fiancée May Insure the Ring
One alternative is for your fiancée to insure the ring on their policy, since coverage usually extends to any property you use, not just property you own. This assumes that either or both have homeowners policies (or they live at home and are covered by their parents’ policies).
When you are married, you will have a single homeowners policy with both of you named as insureds. You can keep insuring the ring on that policy, along with other jewelry or valuables.
The Bottom Line
Talk to your Trusted Choice® independent insurance agents at Masterpole Murphy about all of your options to determine what will work best for you and your future spouse.