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Whether you have a diamond engagement ring that you love to show off, or buy and sell diamonds as a trader, or even simply buy diamonds as a long-term investment, the reason for buying your diamonds will impact your decision on how – and even whether – to insure them. Diamond insurance tends to be expensive, because diamonds are small and easy to lose track of once dropped and they are very tempting to the feloniously minded.
To Insure or Not to Insure?
If you are a long-term investor with a secure safe or bank deposit box, you might find insurance to be an unnecessary cost, eating up the modest gains that you can expect for your investment. Because of the high cost of diamond insurance, many diamond traders opt to use other methods than insurance to protect their livelihoods: practicing the utmost secrecy when travelling with diamonds, using hideaway deodorant and shaving foam cans, hollow books and tailoring suits with snug armpit pockets and other ingenious workarounds that keep their precious cargo safe between destinations.
When you Should Insure Your Diamonds
If your diamond engagement ring is very valuable and a literal once-in-a-lifetime purchase that you would not be able to replicate should it be stolen, lost or damaged, then you probably should hunt around and find an affordable insurance policy that will pay out without too much red tape or quibbling.
Other Alternatives to Insuring Your Diamonds
If your diamond engagement ring is a modest one, and the cost price was something that you would be able to save in a few years or so, then you might be better off doing that: putting aside a certain sum and investing it well. In the event that you need to repair or replace your engagement ring, you will have this nest-egg to fall back on – and if you manage to save more than you need, you could invest in some more diamonds! (Search for diamonds here to get a great deal on good quality stones.)
If your diamonds are an investment and not mounted in any jewelry items, then you can make the most of your return by keeping the diamonds in a secure lockbox, keeping quiet about its location and the value of your investment – and not insuring them. In theory, if no one knows that they are there, no one will come looking for them, and they should be safe, allowing you to maximize your profit when you do ultimately sell off the diamonds – which will usually be after several decades as diamonds do increase in value over time, but this happens slowly, meaning that there is unlikely to be a rapid turnaround in the diamond industry. The latter is itself a point against insuring the stones as the cost of the premiums will wipe out any gains in the investment, especially when extrapolated out over the years.
The decision to insure will always rest with the owner of the stones, but as a rule of thumb, any diamonds that are visible, often in the public domain or at risk of danger or accidental loss should be insured for your peace of mind if for no other reason!
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