Homeowner's and renter's insurance does not cover most jewelry losses. Typically, the extent of coverage (for unscheduled property) is limited to $1000 and $500 respectively. Then, of course, most homeowner's and renter's insurance policies carry a deductible, making a claim settlement for a jewelry loss negligible. To make matters worse, you are covered only in case of loss by theft, not for other reasons.

You may cover jewelry with a rider, floater, or endorsement to an existing homeowner's or renter's insurance policy. Or, you may buy separate insurance for your jewelry. When compared to owning lab created gemstones mounted in fine settings, buying jewelry insurance is not the wisest decision. Allow me to list the reasons why for you.

One: When making a jewelry purchase your money is in the stone(s). For example, the same fine solid gold solitaire setting with a flawless 3 carat natural diamond would cost about $50,000, and with a quality diamond simulant, you can expect to pay about $800. When no one will know the difference but you, an upfront savings of $49,200 is an attractive choice.

Two: Annual insurance premiums for insuring jewelry are 1 to 3 percent of the appraised value. The approximate annual premium on the aforementioned $50,000 solitaire ring at a median 2 percent rate means the annual premium would be $1000, or $200 more than purchasing the same ring with a diamond simulant. In 5 years, the savings over jewelry insurance alone is $4200. In 10 years the savings is $9200.

Three: Not buying jewelry insurance means no homework comparing insurance policies, no paper work, no record keeping, no filling out forms, and no getting (or paying for) appraisals. No dealing with an insurance agent and having him try to up sell you on other coverage is another bonus. How much is your time worth? Do you want to enjoy your jewelry or constantly manage its protection?

Four: Jewelry lovers like to take their jewelry along when they travel. Some jewelry insurance policies or riders have exclusions that do not cover loss, partially or in whole, when traveling. If your jewelry is mounted with synthetic stones, the hassle of jewelry policing while on a trip is minimized along with your risk.

Five: Insurance companies are proficient at collecting premiums, but they are both expert and notorious for chiseling on settlements, delaying settlement payouts, making excuses, and denying claims. Insurance companies write all insurance contracts in arcane language, fine print and all. They have more money and lawyers than you do in a case court battle were to arise from a claim dispute. They can and have dragged claim disputes out for years, sucking the life out of policyholders. In short, insurance companies hold all the cards. Insurance companies are in business to make profits, which means collecting all they can in premiums and paying out as little as possible in claims.

Buying jewelry insurance is like placing an annual bet with an insurance company, a bet you can only "win" by suffering a major loss. Then 12 months later you have to place the same bet again. And should you "win" this bet, you will have to jump through many hoops to collect, and may have trouble cashing in your chips.

For whatever the occasion, gift, or if you have your eye on a specific piece of jewelry to treat yourself, purchasing synthetic or simulant gemstones in a quality setting, instead of natural stones can be an intelligent decision. You will save thousands upfront on your purchase, and your new jewelry will be less expense than just the reoccurring-indefinite cost of insurance on natural diamond jewelry.