Insurance Policy to Secure Your Gold Jewellery in India

May 23, 2022 Mutual Fund

Gold is the most precious of all metals. In India, gold is considered as a symbol of Lakshmi, the goddess of wealth and prosperity. Hence, gold has a significant value in Indian religious ceremonies and weddings. Moreover, in the last couple of decades, it has evolved from being a precious commodity used for jewellery to one of the most popular investment instruments. Apart from that, gold has been helpful for people in times of difficulty or during a financial crisis for the past many years.

Keeping this precious asset secure is a common worry amongst citizens. Bank lockers have been the most popular way of securing gold jewellery and other precious items for years. However, with an increased number of bank frauds and the limited insurance coverage provided by the banks, the security of bank locker belongings has become questionable. Nowadays, more and more individuals are becoming aware of another method of securing their gold jewellery; several financial institutions offer Gold Jewellery Insurance Policy. Many experts believe that insuring your precious items is a more secure way and provides more benefits than keeping them in the bank locker.

What is Gold Jewellery Insurance Policy?

If you have valuables stored at home, there is always a risk of damage or loss of valuables due to theft, burglary, riot, or natural calamities like earthquakes, storms, floods, etc. A Gold Jewellery Insurance Policy provides you financial security against such damage or loss of your precious jewellery.

While buying gold jewellery insurance, you have two options. You can either cover your gold jewellery under your home insurance policy or buy a standalone jewellery insurance policy. If you already have a home insurance policy or planning to buy one, it makes sense to cover the contents like jewellery and other valuables within the home insurance policy itself. You can add this cover by paying some extra premium.

What are the benefits of buying a Gold Jewellery Insurance Plan?

• There is always some risk associated with bank lockers. Jewellery insurance is a more secure method of protecting your valuables

• You save on paying huge bank locker rent

• Your valuables are secured against any damages or loss due to an unfortunate event

What is the coverage offered under the Gold Jewellery Insurance Policy?

The Gold Jewellery Insurance Policy coverage may vary from insurer to insurer. However, here’s the common coverage offered by most standalone policies:

• Natural calamities like floods, storms, earthquakes, lightning, fire, etc.

• Theft

• Burglary or house break-in

• Chain snatching

• Accidental loss

• Damage to the ornaments stored in a bank locker

What are the things you should know when buying a Gold Jewellery Insurance Plan?

• Every insurer offers a different cover under a jewellery insurance policy. Hence, it is crucial to carefully read the agreement and terms and conditions to know the exact coverage of the policy and choose the one that matches your requirements. It is advisable to opt for an 'all-risk cover' policy that has minimal exclusions and offers maximum coverage at a minimum premium.

• Bear in mind that any kind of damage or loss that occurs to the insured jewellery due to the negligence of the owner is not claimable under the policy. Therefore, proving to the insurer that you had kept the jewellery safe and did not show any negligence could be quite challenging for the policyholder.

• When you buy gold jewellery, you pay several taxes, making charges, etc. However, at the time of claim, most policies will not cover these taxes and making charges and will only offer you the current cost of the gold. While most insurers cover only a portion of the value of the ornaments, some insurers provide 100% of the cost of the jewellery. You should know that the invoice is mandatory at the time of insuring and claiming the valuables.

• When buying the insurance policy, make sure the valuation of the ornaments is done properly. Getting a valuation certification from a well-known jeweller is a good idea to know how much amount can get covered.

• The premium of the Gold Jewellery Insurance Policy is determined by several factors, such as the number of ornaments, valuation of the gold jewellery, policy tenure you are looking for, etc.

How to file a claim for a Jewellery Insurance Policy?

Filing an insurance claim is equally important as buying the policy. There could be a minor difference in claim settlement processes of different insurers, but the general process remains the same:

• Inform the insurer on their toll-free number or your Relationship Manager as soon as you realise about the damage/loss.

• The customer service executive or your RM will inform you of the process of filing a claim. You might have to visit the insurer's official website or write an email to the concerned email-id of the insurer to file a claim.

• Once the claim is registered, the insurer will appoint a surveyor to investigate the incident on the insurer's behalf and prepare a report.

• You have to present the necessary facts and documents as requested by the surveyor. For some incidents like theft and burglary, the surveyor may ask for the FIR.

• After the investigation is done, the surveyor will prepare the final assessment report that consists of the compensation that you will receive.

• You will have to present the insurance copy to the insurer when demanded.

• If the insurer offers the facility, you can check the status of your claim by logging into your online account. Otherwise, the insurer will inform you once the claim is settled or if they need any other details.

What are the cases in which you will not be able to file a claim?

When buying a Jewellery Insurance Plan, you should check the policy terms and conditions and the list of inclusions and exclusions to know the situations that will be covered under the policy. Here’s a list of common exclusions in jewellery insurance:

• Deliberately doing acts that result in damage or loss of insured items

• Damage or loss of insured items due to territorial limits specified in the policy

• Damage or loss of insured items arising out of forest fire, war, nuclear explosion, and terrorism

• Damage or loss of insured items due to cleaning, repairing, or any other similar processes

To Conclude:

Jewellery Insurance is necessary to secure your precious ornaments against loss or damage due to any reason. With the several benefits that it offers, it can be considered a better security option than a bank locker. In fact, even if you have kept your valuable jewellery in a bank locker, it is advisable to secure it with a Gold Jewellery Insurance Policy. Before buying the policy, make sure you carefully read the list of exclusions, terms and conditions, etc., to avoid any future disputes.

This article first appeared on PersonalFN here