Is Gold or Silver covered by Homeowners Insurance?

If you own a home, a homeowners insurance policy is an absolute must. Not only does homeowners insurance provide protection for what may be the biggest investment of their lifetime, but it also provides insurance cover for your personal property such furniture, appliances and clothing.

It would be wrong to assume that you can store an unlimited amount of jewelry and even pure gold bars and gold coins on the premises, and your homeowners insurance policy will automatically insure coins such as gold, silver, jewelry or bullion.

There are many exceptions and limits of which you should be aware.

To what extent does standard homeowners insurance cover jewelry or precious metals?

Homeowners insurance policies typically only cover jewelry up to a certain amount. Most home insurance policies the limit for jewelry is somewhere in the region of $1,000. For example, if your engagement ring costs $8,000 is stolen, your home insurance policy will only cover you for up to $1,000 and subject to your home insurance deductible.

What are your options if you want to have better jewelry coverage?

If you own jewelry, there are two ways to increase the amount that your homeowners insurance covers.

– Increase the blanket coverage limit –  This will certainly help. But remember that, even if you increase the total limit for jewelry losses to let’s say $5,000, the maximum amount for an individual piece of jewelry might still be much lower, e.g., $2,000. If you own more expensive items of gold jewelry, you will have to find another way to get them covered.

– Buy what is known as a ‘floater or scheduled personal property’ – A floater, inland marine or scheduled personal property (SPP) policy provides significantly better protection. A floater is basically an appendix to the basic homeowners insurance policy. It covers any type of loss, including ones that are not covered by the basic homeowners policy. Examples include forgetting your pure gold wedding ring in a Hawaii hotel room or accidentally dropping your 100% pure gold pendant down that same hotel room’s bathroom sink.

To what extent will my homeowners insurance cover gold bars and coins?

A typical homeowners insurance policy comes with either a zero or a very small limit such as $250 when it comes to providing cover for gold bars or coins. As is the case with jewelry, you can buy extra cover. But even that might not be enough. If you increase the total limit for precious metals to $5,000 and the per-item limit to $2,000 it might take care of your basic needs, you will still end out of pocket though if there is a burglary and you were storing gold bars worth $1 million under your bed.

The bottom line

After examining the facts it would seem that your homeowners insurance policy is a viable option to protect you against potential losses when it comes to gold jewelry. It is, however, not meant for insuring gold bars or gold coins. Instead of storing these under your bed, you would be much better off getting a proper safe. Otherwise, rent a safe deposit box at your bank.