The subjective value of an engagement ring
Engagement rings hold subjective value. Generally, people handle them with greater care and attention than other jewellery items. An engagement ring is not as much a precious metal as a memory. It reminds people of a particular time and place that cannot be forgotten.
I could tell you the exact details of my proposal to my partner. Walking on Grand Case beach in St Martin, I took my partner for a stroll by the sea (a place where I spent most of my youth). We stood on the soft sand, and I got down on one knee. 18 years (and four kids!) later, I can re-tell this memory with crystal clarity, which is odd. There’s so much I cannot remember over the last 18 years, yet I remember this event like yesterday. Then add to this the cost involved.
In research conducted by the Diamonds Factory, it was found that Brits spend an average of £1,865 on an engagement ring. This is significantly less than the average 3-month salary in the UK of £7,650, which is often the figure recommended to spend on a ring for your significant other. They also found that the average carat of engagement rings is 0.6 in the UK – in the US, the average is larger at 1.2 carats (infer from this what you will!).
When spending so much money on a ring that reminds you of a critical moment in your life, it’s essential to make sure you have the right engagement ring insurance in case of any loss, theft, or accidental damage.
Here’s our guide on insuring your precious engagement ring(s).
Should I insure my engagement ring on its own?
For many people, insuring an engagement ring on a standalone basis is the way to go. This can be for several reasons, but the main include:
- You’re proposing to your partner, and you don’t want them to see the item on a household insurance schedule.
- You want to keep the value of the ring under the radar.
- You might live at different addresses.
- You might live with family or friends, and a separate policy is the most suitable way forward.
- You have one item of high value whilst your general contents and building sums insured are modest.
That said, if you have an extensive jewellery collection then our recommendation would be to insure the engagement ring on a High Value Home Insurance insurance product. You can read more about this in our High-Value Home Insurance Guide.
What is the benefit of insuring my engagement ring on a stand-alone product?
We cannot speak on behalf of the market, but the benefits of insuring a stand-alone product with Stanhope include the following:
- No excess
- Worldwide Cover for up to 45 consecutive days
- Cash settlement if the item cannot be restored or replaced with one of comparable quality
- All Risks cover including loss, theft and accidental damage
- It is a very quick and easy process on the phone. Sometimes less than 5 minutes
How much should I ensure my engagement ring for?
The purchase price of an engagement ring can sometimes be less than the insurance valuation. For insurance purposes, you should insure the item(s) for the total replacement value as new in the UK, not the original purchase price. When you purchase an engagement ring, you should have a valuation certificate within the purchase documents. This valuation certificate represents the item’s total replacement value as new, considering market pricing, tax, labour costs, and other associated charges. The purchase price can sometimes be lower than the amount shown on the valuation certificate as the jeweller might have special discount arrangements with wholesalers or offer special discounts at the time of purchase.
Regarding second-hand items, you should insure the amount to replace the item with a similar age and value in the UK. We recommend you carry out a valuation of any item purchased second-hand.
How often should I have my item valued?
The typical rule is every three years since the cost of precious metals is volatile. Gold, particularly, has substantially increased over the past three years (see the Gold Price website here), and with natural diamonds being more hard to come by, the value is noticeably increasing.
Should I send a copy of my valuation to my insurance broker if I take out a policy?
In short, yes. Sadly, the jewellery market is littered with fraudulent claims. To limit such claims, it is essential for the broker to establish that (a) the items exist, (b) there is an insurable interest between the item and the owner on the schedule, and (c) the item is insured for the correct value. This is the best way to do so. Sending a valuation to your broker also helps speed up the claims process.
What should I look out for when choosing an approved valuer?
An Approved Valuation is a valuation that is dated no older than five years before the inception date and is a valuation completed by a jeweller who is a member of either:
- Institute of Registered Valuer (IRV)
- National Association of Goldsmiths (NAG)
- National Association of Jewellers (NAJ)
This approved valuation report should include the following:
- the cut, colour, clarity, and carat of the diamond (if applicable)
- address and name of the valuer
- address and name of the item owner
- value and description of each item
- date the valuation was carried out & additional supporting documents
However, if you choose to ensure your engagement ring, please ensure it is covered with the right product. One of the Stanhope advisors would love to discuss your options. Call us today on 01730 777600 or complete an online enquiry form.
