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Does Insurance Cover A Chipped Diamond?

Does Insurance Cover A Chipped Diamond?

Maybe it was a birthday present or a wedding ring. Besides being pricey, diamonds hold sentimental value. Damaging one can be a very stressful situation. 

Chipping a nail is uncomfortable – but chipping a diamond will be flat-out devastating, both financially and emotionally. 

Diamonds are known as the hardest material in the world, yet they can still get damaged – especially if you accidentally smack them on kitchen countertops or rocks in your garden. 

When that occurs, the first thing that probably pops into your mind is: Does insurance cover a chipped diamond? 

Once chipping happens – cracks are inevitable. So, in this article, we’re covering whether insurance covers damaged diamonds, does it lose value, and how to keep your jewelry safe. 

Read on! 

Does Insurance Cover A Chipped Diamond? 

Unfortunately, the answer isn’t straightforward. The good news is – when it comes to homeowner’s insurance, diamonds are usually covered. 

However, jewelry is often covered by insurance in a more limited way than other personal property. 

To be exact, if your diamond gets chipped because of fire or a windstorm, your policy will most likely cover the damage. The common insurance-covered perils include fire, explosions, vandalism, falling objects. 

In short, they cover most natural disasters or accidents that are beyond your control. 

We purposely wrote “most natural disasters.” 

That’s because, more often than not, regular homeowners insurance doesn’t cover damage that occurs from a natural flood. That’s why you usually need an extra flood insurance policy. 

But, if your diamond ring gets smacked on a granite countertop or gets chipped while you’re cleaning the house – chances are, it’s not going to be covered. 

That’s why you must know how to keep your diamond safe and avoid any possible chipping properly.

Although this seems pretty unfair, there are ways to increase coverage for your gems. To avoid potential stress caused by a chipped diamond, you can purchase an additional floater or an endorsement.  

An insurance endorsement is an adjustment to your regular insurance that changes your coverage. Simply put, adding an endorsement to the existing insurance contract means modifying what your insurance covers. 

In short, an endorsement changes the terms of your existing policy. 

This type of addition is also known as scheduled personal property coverage. As the name implies, you can buy more coverage for specific categories. 

So, what’s a floater, then?

An insurance floater is very similar to an endorsement. Yet, rather than increasing coverage for specific categories, floaters increase coverage for particular belongings. That’s why it’s best for your diamonds. 

Furs and jewelry pieces are the most common items attached to insurance floaters. 

Now, you might be asking yourself: What if my diamond is not certified, though? Can I insure a non-certified diamond? 

You absolutely can. Nonetheless, before you start insuring your rock under a floater or home insurance – you must have it appraised. 

Having a diamond appraised is paramount. That’s how you know how much it’s worth for insurance purposes! 

You can get your diamond appraised by sending it to a professional gemological laboratory. 

There, professionals will analyze and grade your gem according to numerous parameters. After that, the gemological laboratory will issue your diamond certificate. The value of the appraisal is the value of your diamond – insurance-wise. 

Now, your diamond is certified, and you can insure it with no issues. 

Related Read: Diamond Appraisal Vs. Diamond Certification: Which One To Get?

What Type Of Insurance Is Best For Diamonds?

Insuring your jewelry is essential, especially if they’re diamonds! It would be best if you insured your jewelry pieces as soon as you get them. 

Misfortunes can happen to all of us – and it’s better to be safe than sorry.   

As we mentioned above, a basic homeowner’s insurance only covers a limited value for jewelry. Also, these policies don’t cover most risks, such as accidental loss. 

The most common insurances cover up to $2,500 worth of jewelry damage. 

That seems like much until you compare that amount to an engagement ring’s average value of $6,000 to $9,000. 

Let’s not forget; that limited payout is only available if you have proof that your jewelry was damaged in your home due to a natural disaster. 

That’s why floaters and endorsements – which we already covered in this article – are great ways to insure your diamonds. However, there are even more and better ways to insure your valuables. 

For starters, you should consider getting a separate insurance policy for your gems. 

A separate insurance policy can fill all the gaps that are missing in your homeowner’s insurance. You can even tailor it however you like, in terms of value and potential risk. 

Furthermore, there are even some insurance policies that specialize in jewelry! 

Because these policies are specialized, they usually cooperate with jewelry stores directly. That means that you would have many more options concerning exchange or repairment. 

Although this seems like the best option for your diamond, it also comes with a more significant price tag. This type of specialized insurance is usually recommended for antique jewelry or customized diamonds. 

Having your diamonds covered by insurance is essential. But, instead of dealing with more unnecessary costs and complicated paperwork, you might want to learn how to keep your diamonds safe. 

Learn More: How Much Does It Cost To Insure A Diamond Ring?

Can You Insure A Lab Grown Diamond?

While we’re on the subject of specialized insurance, it’s important to mention a particular type of diamond – a lab-grown one. These diamonds bring a lot of questions with them, especially when it comes to insuring them in the case of damage. 

Heck, it’s not just the chipping or scratching that worries people; covering things like theft and just losing them is as important. 

So, what is the problem here? 

Well, people sometimes have problems getting the same value for lab-grown diamonds as they would for natural ones. You can imagine then that they’d be worried about getting them insured, but don’t worry, we’re here to put your mind at ease. 

Lab-grown diamonds can get insured to the same amount that a natural stone would, and there are also a couple of options to go for insurance-wise. 

You can pay for self-insurance, which pretty much means that you’re putting money on the side that you can use in case you need to repair any damages to your diamond or get financial help in case of theft. It will cost you a bit more (about $2500 per month), but it’s pretty much the safest option if you don’t want to go through the appraisal process.

If that’s not something you want to go for, don’t worry, there’s always jewelry insurance! 

That’s right, a lab-grown diamond gets insured as jewelry just as easy as a natural one would. You can also insure them through your homeowners or renters policy – although those will set a lower cap for any type of gem.

There are numerous ways to keep yourself (and your finances) safe in the case of a chipped diamond, no matter where it came from – nature or lab. 

But how about we take a look at a couple of ways of keeping your diamonds safe in the first place?

Learn More: Diamond Care: How To Take Care Of Your Diamonds

How To Keep Your Diamond Safe

Although they’re famous for being the hardest natural material, you still need to care for them. Because a diamond’s hardness is uneven along with different directions of the crystal, they are prone to damage. 

Whether you have one diamond ring or a whole collection – you want to keep them safe from all possible threats to their aesthetics and value. 

Shop Wisely 

For starters, when buying a diamond – shop wisely. 

Some diamond shapes are more prone to chipping than others. For example, radiants, triangular shapes, and emerald cuts are at higher risk of chipping than rounder diamonds. 

So, avoid diamonds with points and sharp corners.

Take Off Your Diamond 

To keep your gem safe, you need to know when to take it off. You need to recognize situations in which you could potentially chip your diamond, take off your rock – and store it in a safe place. 

Some of these activities include:

  1. Physical Activity :Exercising – be it in the gym or outside – presents a risk for your diamond. When working out, you can hit your ring on the part of the equipment. Also, there’s a chance of your ring falling off your finger because of the sweat. 
  2. Cooking: Most countertops are made out of granite. And although granite looks beautiful in your kitchen, this surface is very hard – especially for your diamond. When hit in the wrong way, there’s a great chance it will chip your diamond. So, make sure to take your ring off when trying out that new recipe.
  3. Garden Work: Taking your diamond off during gardening is very important. There are too many risks out there! Starting from garden rocks and up to different types of gardening tools – they all pose a danger to your diamond. Even more so, dirt doesn’t suit diamonds very well.

Clean Your Diamond 

Although it isn’t a safety-related matter, cleaning your diamond regularly can maintain its good looks. These rocks are magnets for grease, so cleaning is part of taking care of them. 

To adequately clean your diamond, soak it in a degreasing solution. Water mixed with a few drops of dish soap is a great option. After you remove the diamond from the solution, finish it off by brushing it gently with a clean toothbrush. It works like a charm! 

However, be sure not to use any harmful solutions, such as chlorine or bleach. These chemicals can damage the metals surrounding your rock.

Related Read:

Can You Fix A Chipped Diamond?

Even if your insurance does cover diamond chipping, is it worth fixing – or should you replace it? Unfortunately, there’s no remedy to a chipped diamond. Once it’s damaged, there’s no way to restore it to its previous state. 

The bad news doesn’t stop here: Once your diamond is chipped, there’s a chance that it’s going to break. That’s because its internal structure is now compromised. 

But, if your insurance does cover chipping, there’s a chance they will pay for a replacement. 

And even if that isn’t the case, you still have a few options

One of the options is re-cutting the chipped diamond. Depending on the size and damage of the rock, you can go to your local jeweler, where your diamond can get resized. 

The process of re-cutting is making a smaller diamond out of a chipped one. The diamond is professionally cut, and the damaged part is removed. 

It’s important to note: Re-cutting makes your diamond less valuable. Because a part of it’s removed, the diamond’s carat weight goes down. The more damage your diamond has, the more it needs to be cut off. 

Keep in mind that this process isn’t cheap, either. So, if your insurance doesn’t cover re-cutting, prepare yourself for some spending. 

If by any chance, insurance does not cover your chipped diamond, you can still exchange it. However, since your diamond has a chip, its value has dropped significantly, as we mentioned above. 

So, if you manage to make a deal with a jeweler, you’re going to end up with a much less valuable stone than you originally had. 

But why would a jeweler be interested in a damaged diamond? In short – it pays off for them. 

You get a much less valuable stone, and they get a rock in which they can cut the chip and make a newly formed diamond. That way, they can sell it, but for a lower price than when you bought it. 

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Final Words

Does insurance cover a chipped diamond? Well, now you know!

With regular homeowners’ insurance, you really can’t be sure. It all depends on your contract. However, instead of stressing about what type of damages it covers, now you know different types of insurances and how they work. 

Before you end up in a situation where you have a chip in your diamond, be sure to insure it properly. Although additional coverage can be pricey, it pays off more in the long run!

See Also: Can Diamonds Crack Inside?