I bought a loose diamond for $15,000 to have a custom ring made. I kept it in a drawer. It was stolen. My insurance denied it because “Jewelry” implies a finished piece, and “Unset Gems” are often excluded or require specific scheduling.
Key Takeaways
- Unset Gems Exclusion: Many homeowners policies exclude loose stones because they are high-risk (easy to lose, swallow, or fence).
- Scheduling as “Loose Stone”: You can insure a loose diamond, but you must describe it explicitly as “Unmounted Diamond” on the schedule.
- Course of Construction: When you give the stone to a jeweler to set, ensure the insurance covers it while at the jeweler. (See Article 4).
- Value Change: Once set, the value increases (Stone + Setting + Labor). You must update the appraisal and policy immediately upon completion.
The “Why” (The Trap)
The trap is “Classification.”
Is a loose diamond “Jewelry”? Or is it “Bullion/Commodity”?
Insurers dislike loose stones because they are fungible.
If you insure a “Diamond Ring” but you only possess a “Diamond,” and it’s stolen, the description doesn’t match the asset. Claim denied.
The Investigation (My Analysis of Loose Gem Coverage)
I checked who covers the rock before the ring.
Jewelers Mutual
- The Verdict: Yes, they cover loose stones.
- The Process: You list it as “Loose Diamond.” When it gets set, you log in and update the item to “Diamond Ring” and increase the value.
Homeowners
- The Verdict: Risky. Unscheduled loose gems are often capped at $500 or excluded entirely.
The “Transit” Gap
- The Risk: Carrying the loose stone to the jeweler. This is when it’s most vulnerable. Ensure your policy covers “In Transit.”
[IMAGE: Photo of a loose diamond in a plastic display box next to a pair of tweezers]
Comparison Table
| Status | Insurance Description | Risk Level |
| Loose Stone | “Unmounted Gem” | High (Lost easily) |
| At Jeweler | “Stone at Jeweler” | High (Workmanship) |
| Finished Ring | “Diamond Ring” | Medium |
Step-by-Step Action Plan
- Insure at Purchase: Insure the stone the day you buy it. Use the invoice as proof.
- Specify “Loose”: Ensure the policy says “Loose Diamond.”
- Update at Setting: The day you pick up the finished ring, send the new appraisal (Stone + Setting) to the insurer.
- Check Bailee Coverage: Confirm the jeweler has insurance before leaving the stone with them.
FAQ
Can I insure a stone I inherited?
Yes, get an appraisal first.
What if I break it while looking at it?
Accidental damage. Covered by JM/Lavalier.
Is it cheaper to insure loose?
Same rate usually (~1-2% of value).