Purchase Engagement Ring Insurance the Right Way

If you have expensive jewelry and you don’t have specific jewelry insurance, you may be incorrectly assuming that your homeowners insurance has you covered. Often times, normal homeowners insurance will cover some small amount when it comes to jewelry. That’s because it can be difficult to prove what jewelry you had and how much it was worth and the insurance company doesn’t want to be held liable for those if they don’t have to. The jewelry that you have might only be covered up to $1,000 if you don’t have a rider to cover the jewelry specifically. And often times, homeowners insurance will only cover theft of jewelry by default.

Last year I proposed to my fiance, so I figure it’s about time I purchase engagement ring insurance. This isn’t like normal insurance where you list items that you want to itemize and claim a value. To get a quote and purchase engagement ring insurance you need to get the piece of jewelry appraisal by a certified jeweler. The insurance company is going to rely on this appraisal when giving you your jewelry insurance quote.

Engagement Ring InsuranceWhen looking for a jewelry insurance quote, you’ll need to specify whether you’d like replacement or dollar value coverage. Replacement coverage will replace the lost or stolen ring with a piece of jewelry that is similar or better. Dollar value coverage will replace your lost or stolen piece with money equal to its appraisal value.

There are a variety of jewelry insurance companies to choose from. One of the most popular jewelry insurance companies is the Jewelers Mutual Insurance Company. I like the idea of choosing a company that specializes in jewelry insurance. Jewelers Mutual offers what they call Perfect Circle insurance. Under Jewelers Mutual’s Perfect Circle insurance policy your jewelry is completely covered. Whether you’re at home or traveling abroad, Jewelers Mutual covers loss, theft, damage, and best of all, mysterious disappearance. Sometimes you just aren’t sure where the ring went. In those cases, mysterious disappearance covered is going to be crucial. Jewelers Mutual truly covers any way in which you may lose your jewelry.

Getting an Engagement Ring Insurance Quote

Getting an engagement ring insurance quote from Jewelers Mutual is extremely easy. You just have to put in your zip code and value of the jewelry.

Engagement Ring Insurance Premiums

For the sake of easy, let’s look at the jewelry insurance premiums for a $20,000 engagement ring. Insuring an engagement ring worth $20,000 with no deduction will cost approximately $380 per year. A $1,000 deductible drops this down to $312. That’s about as far as you can go with a “Quick Quote”, but a real quote will give you more options to select that will impact your insurance premium. The frequency with which you wear the item makes a significant difference, and the location in which it’s kept (alarmed safe, under the pillow, etc.) will also affect your insurance premiums.

If jewelry insurance is something you need, then I suggest checking out to see what Jewelers Mutual can do for you. A prudent purchaser will compare the price and benefits of Jewelers Mutual with the price and benefits provided by a rider plan on their existing homeowners insurance. Once I insure the engagement ring I can check back in with a few more details about the process.

(Photo courtesy of ilovebutter)

The Average American Household Credit Card Debt

When economic times are good, statistics like the average household credit card debt aren’t as interesting. People are employed and they’re able to get loans for just about anything they want. When the economy goes sour, that’s when consumers and policy makers alike become more concerned with data on the financial health of Americans. Luckily for us, the U.S. government is always compiling economic data to help influence policy decisions. Unfortunately, there is almost always a large lag between the period in which the data is collected, and when it’s released. To find out the hard data compiled on the average household credit card debt, I went directly to the Federal Reserve’s 2007 Survey of Consumer Finances and 2009 Survey of Consumer Finances Follow-up. The 2007 Survey is the normal survey conducted every three years, which was the source for most of the information posted below. The 2009 Survey was a follow-up that re-interviewed the original 2007 participants to see how their finances changed between 2007 and 2009.

General Debt of American Households
Average Household Credit Card DebtIn 2007, the Survey of Consumer Finances reported that 77% of American families had some type of debt. I find debt to be interesting because its highest use is the middle class. The poorest families, below the 20th percentile of income, were least likely to have debt. Of these families, 52.6% held any form of debt, and only 28.8% had credit card debt. This stems from the fact that people in this income bracket are the least credit-worthy. Families with incomes in the 90th percentile are the second least likely to carry credit card debt, at 38.5% of families.

Average American Household Credit Card Debt
In 2007, the average American household that held credit card debt was $7,300. It’s clear that the credit card balances of some families is quite high because the median balance for families with credit card debt is $3,000. That means there are families with significant amounts of credit card debt that bring up that average. Balances held by high-income families, childless couples, and families headed by someone who is self-employed increased the most.

Average Credit Card Balance
In its 2007 Survey, the Federal Reserve found that 73% of families had a credit card. This statistics surprised me, because it means that 27% of American do not have a credit card. I’m guessing this 27% is composed of poor people who do not qualify, and Dave Ramsey fans who have cut theirs up. The Federal Reserve also found that 46% of families held credit card debt.

Average Credit Card Limit and Interest Rate
The median number of credit cards held by families in 2007 was two. That’s a far-cry from my wallet-busting 10+. However, two is probably all that someone genuinely needs. The median credit limit was $18,000, which means some people have some very high credit limits. I’m sure that the median limit has fallen since 2007. The median interest rate on the card with the highest balance (or newest card, if no balances) was 12.5%.

Overall this data is interesting, but there isn’t anything terribly shocking. I was surprised at the fact that the median credit card debt by those carrying a balance was only $3k. I guess Americans are more responsible than common media might lead us to believe. Good for us.

(Photo: 401K)

Costs of Raising a Child “Soaring”?

I recently saw on from CNBC article on Yahoo that was interesting for a variety of reasons. The article was written because the Department of Agriculture recently revealed that a middle-income family raising a child born in 2010 can expect to spend approximately $227k (in today’s dollars) for food, housing, and other living expenses. And this number doesn’t even factor in college or pregnancies.

The whole idea isn’t to scare you into not having children. Although, which such a high price tag, that may be some people’s first reaction. However, the high cost of raising children is absolutely something that should be understood. I don’t think that you should make decisions about children based on money, but I strongly believe that you should have a plan for a first couple of years of parenthood if you plan on having children. An emergency fund should be built for any complications, space requirements in the house and cars should be assessed, and determinations about careers and employment will need to be made.

Costs of Raising a ChildAlso staggering were the differences in lifestyle inflation based on incomes of the parents. It may sound obvious, but upper-middle-class families spent significantly more raising their children than less-well-off families. The USA report reveals that a family earning less than $57,600 would expect to spend $163k on a child; while parents earning more than $99,730 should expect to spend about $377k raising a child. Parents with incomes between those two levels spent $226k per child. I think we can assume that $163k covers the essentials, so parents earning more than $99,600 per year are spending $200k on non-essentials (trips to the movies, eating out, etc.).

However, what I found most interesting about this article, was that the author didn’t take the slant of “the costs of raising a child are very high”, but that “the costs of raising a child are soaring!” The article is titled The Inflation of Life – Cost of Raising a Child Has Soared, which one would usually take to indicate that the costs have increased at a pace greater than what was expected. The author states that “the cost of raising a child from birth to age 17 has surged 25 percent over the last 10 years.” I think that a 25% increase over 10 years is hardly a surge. That’s a compounded rate of approximately 2.3% per year, which is abut what someone should expect due to inflationary increases in food, medical, and other needs. It’s actually probably lower than I would have expected overall due to surging costs in healthcare, which I would imagine a child needs a decent amount of.

Whether you’re planning for children or simply interested in how the media sometimes sounds the alarm inappropriately, I think the article is interesting so I wanted to post it. If you’ve been thinking of having a child, does the high price tag give you pause?

(Photo courtesy of Flickr)