Why I Dropped My Ring Insurance
I really like my engagement ring. It is simple and something I can see wearing forever. Even though I really like it I stopped insuring it a few years ago. Here is my reasoning on dropping the ring insurance.
Photo source: firemedic58
Why Do I Have Insurance?
Personally I have insurance for things when I cannot afford but need to cover the worst case scenario. If my house burned to the ground I could not build again without insurance. If someone in my family ended up in the hospital for a month I could not pay the bills without health insurance. You get the idea.
What Don’t I Insure?
Now that I have enough of an emergency fund saved I don’t insure the smaller emergencies. That is why I have a high deductible on my homeowners insurance. I pay to insure things I cannot afford and I’m at a point in my financial life where I can cover the smaller problems so I don’t pay to insure them. This has two benefits. First, I pay a smaller premium each year (savings that can further boost my emergency fund) and second I don’t file a bunch of small claims. Filing claims can increase your premiums so I’m saving a second time.
What about the Ring?
When I first got engaged I was very sentimental about my ring. At the time it was also the most expensive thing I owned. (The car I drove was held together with duct tape and probably worth more as scrap metal than as a car. Ah 1986 Honda Civic – we had some good times…) So we insured it right away. I wasn’t so worried about it being stolen as much as I was losing it. I did have a close call one day with a shower drain but luckily managed to save it from going down the pipes. The insurance gave me piece of mind and was totally worth it.
What has changed?
Well it has been a decade since I got that ring and life has changed a lot. 2 kids and a house later my priorities have changed. I realized one day that if I ever lost my ring and got a check from the insurance company I’m not sure I would replace it. There are things more important to me now and I would probably use the money on one of my higher priorities and get synthetic diamond to wear. When I realized that I figured it was time to drop the insurance.
Should You Drop Your Ring Insurance?
I still like my ring and would be sad if I lost it but not so sad that I would go out and spend that money a second time. I’m not advocating that everyone go out and drop their ring insurance either. If you know that you would replace your ring and can’t afford to do so without insurance then you should absolutely have it. What I do think we all should do from time to time is check-in with ourselves about what we are insuring and why. If you asked me 10 years ago my answer would be completely different than today. Who knows how I’ll feel in another 10 years.
What items do you no longer insure?
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Adrienne, I’m curious, did you pay more or less the value of the ring by insuring it?
Veronica – Are you asking if all the premiums over the years added up to the cost of the ring? They did not.
You outline a good approach to insurance here. I think people tend to think they need to insure everything, but if you can replace it with cash, or it’s not as valuable to you as it used to be, then why pay the premiums. I like the example of your ring, but think there is an overarching message for people to consider here.
I dropped the insurance on my jewelry many years ago, due to similar circumstances. Many years later nothing has happened to my jewelry, but if something did it would not be the end of the world (I would not replace it), it’s just not that important to me any more.