Hello everybody. I've been lurking for some time, have to say I think this is a pretty good site. Good variety of intelligently articulated opinions, well-mannered patrons, all-in-all pretty close to the opposite of the rest of the internet.

Anyway, my question.

When I asked my wife to marry me, I bought a diamond and had it mounted. She said yes for some odd reason, and we're happily married. Now at the time, we were moving down the dark side in terms of debt and had about 20k worth of odd debt with no real savings to speak of. If something had happened to that ring, we'd have been SOL. So, we insured it for about $70/year for the appraised value of approximately 5k.

Fast forward a few years. We're older, smarter (theoretically anyway). Figured out only congress can go on ignoring debts and budget issues. Had a rough go of it, but now all that debt is all gone, have a healthy emergency fund, no 'bad' debt, etc. All in all, I can't complain. We turned it around and we're in a good spot now.

Anyway the question of the ring insurance came up again. My wife is all for keeping the insurance. She likes the peace of mind for the cost. I'm for getting rid of it (the insurance not the ring :). Seems to me we're at the point of 'self-insurance' through the emergency fund. I equated it to the days when we were paycheck to paycheck, we were forced into paying low deductable, higher monthly payment auto insurance. In those days, having a $500 deductable versus $250 might have meant the difference between not getting the car repaired. Nowadays of course we save on the monthly payment because we can afford the higher deductable.

Probably just a matter of comfort with risk, but I'm curious what people think. Are there things you used to feel obligated to have that you can no longer justify now that you're either out of debt or just smarter financially? How about the emotional aspect of decisions like this? I must admit I will probably cave on this one (happy wife, happy life).

Apologies for the novella, and happy holidays.
Zulu

Is this something you can roll into your existing homeowner's/renter's insurance? That might give you a comprimise where you save some money, and keep the peace of mind your wife wants.

In terms of homeowners ins I think that for any jewelry over x amount of dollars (for our policy it's 2k) you must carry a seperate "jewelry and furs" rider. Of course every policy is different and you should check yours.

Even though our EF would cover replacement for my wedding rings if they got lost we'd rather pay the rider.

We decided to hold onto the insurance for one more year (we've been married one year so the ring is almost 2 years old). But in our case, we pretty much agreed that we wouldn't replace it with an identical one. We would take it down a step (or two). Yes, that probably means he bought more than he should have at the time (perhaps we should have shopped together).

So, that's to say, I think you need to be on the same page with your wife. If she would expect it to be replaced, are you both prepared to spend the emergency fund on it? Or would it be a source of tension? If it would, I would hang onto the insurance. If you both would be comfortable writing the check immediately and it wouldn't harm the overall financial picture, then go ahead and get rid of the insurance.

$70 a year for your wife's peace of mind seems like a bargain. I'd keep it.

Yeah. This isn't a financial decision; if it were, you wouldn't have spent $5k on a ring in the first place. If it makes your wife comfortable to have the insurance, keep it.

Our homeowners insurance does cover up to $1500 for jewelry, but even with that it's still a good chunk of change to replace. Another consideration I came up with last night was that the same event that causes the ring to get lost might also require money from the EF for other things. It would be terrible not be able to replace the ring right away because we had to buy a new automobile first, for instance.

Okay, I'm sold. I was planning on letting her make the ultimate decision anyway, since I feel it's more important to her, but I'll come hat in hand and say I've changed my mind and offer my support.

Happy holidays,
Zulu

it seems that you may have paid less than the appraised value. I would get the ring re-appraised, but by a certified diamond appraiser, unless it is something like a cartier or tiffany's in which case the value is based off of the name not the actual diamond. good, certified appraisers cost between $100-$300 per hour, where a solitaire diamond ring takes about 45 minutes to appraise. remember, jewelers aren't necessary gemologists or appraisers.

you might get a warm fuzzy about the appraised value being higher than what you paid for the ring from a jeweler. Lots of people do. Lots of people get an appraisal from the jeweler for free or pays like $20 for an appraisal, but that isn't an accurate evaluation. Check the certificates of the person who is doing the appraisal. The appraiser should be certified in the gem that they are appraising (i.e. it doesn't make sense to have your diamonds insured by someone that is only certified on semi-precious stones and not diamonds). What sucks is that insurance companies don't have a requirement for the appraisal to be done by a certified gemologist or certified appraiser; moreover, if you pay more insurance than what the ring is worth, all the better for the insurance companies. Remember, your insurance company has the ability to buy the same diamond ring for less than what you can because they have habitual relationships and because they can buy in volume which joe consumer cannot. Insurance companies also have clauses in your insurance policy that affords them the ability to replace your ring themselves rather than you. An accurate appraisal means that you will pay less insurance in the long run and won't be insuring the ring for more than what the insurance company could replace the ring for. so, don't get caught up in the oh i got a kick ass deal from a jeweler who appraised the ring three times what I paid for it. you should try to have an independent appraiser who didn't sell you the ring.

you should update your appraisal every 2-5 years, and your insurance company may have stipulations for doing so, because of market fluctuations and because your ring may take on damage etc. many good, certified appraisers will charge less for updates, too, if you continue to go to the same appraiser.

$70/year seems a little higher than average for $5k. Should be around $1 per $100, but obviously premiums are situationally and geographically dependent.

I don't know your wife, so this idea may not fly and the very suggestion may throw you into cardiac arrest...

but if it were ME...

I would sell the diamond, replace it with a Moissanite, drop the insurance, and enjoy the piece of mind that comes from not having to worry about what might happen to the $5,000 rock I'm wearing on my finger at all times.

Honestly Anne, were it completely up to me, that rock would be a part of our mortgage payment. Unfortunately, while my wife is very intelligent, she's also had a vision her whole life of how marriage is supposed to go, and part of that is the ring. I don't understand the fascination myself (there's far prettier, cheaper and more unique stones available), but I understand that the fascination exists and how important it is to her and I just can't take that away from her.

As to the appraised value, it's about 1k higher than the 'sum of the parts'. I did my research and bought the stone separately based on the characteristics I thought most important (cut, clarity, color, and carat, in that order) from a diamond broker. It was then independently appraised and ceritfied (or it would have been returned). I had it mounted in a temporary setting, then afterwards I went shopping with my fiance at the time for the right setting. After re-mounting, the whole ring was again appraised, and this was the value used for insurance. We had it insured under a renters policy previously at $55/month, but had to move the policy. First quote was $70/month, but I'm still shopping.

Incidentally, anyone looking for a good book on diamonds should read How To Buy A Diamond: Insider Secrets For Getting Your Money's Worth by Fred Cuellar. That book kept me from making alot of costly mistakes. It's got a good section on the mathematics behind how diamonds are cut and the associated light dynamics, and let a math dork like myself find something objective in a primarily subjective topic. It also allowed me to know instantly just based on the diamond certification whether a broker was trying to show me a 'lemon'. I brought the book with me to the first broker I met with and he groaned and said, "oh no another engineer".

Dangit, rambling again!

thanks,
Zulu

I agree with Sam, it is so cheap, I would keep.

i'm in the same boat as you- have to have a separate rider, appraised value about $6700, -> although my yearly premium is a little less than yours for more coverage - $67. This is through State Farm. I'd shop around if you can, but i would keep the insurance. I can't imagine what i would do if I lost it - and my mother lost her diamond (it popped right out of her setting moving my brother into college). These things do happen.