On the Fifth Day of Christmas I Lost Money on My Five Gold Rings

New Mexico homeowner's insurance“On the fifth day of Christmas my true love gave to me five gold rings, four collie birds, three French hens, two turtle doves, and a partridge in a pear tree”.
Guess what? On the fifth day of Christmas I get five gold rings and gold is great. Gold has been increasing in value steadily for the last decade. At the turn of the millennia the price of gold hovered around three hundred dollars per ounce, but now it’s well over one thousand six hundred dollars per ounce, that’s more than a five hundred percent increase in value. Furthermore, with the continued actions being taken by the Federal Reserve experts predict that the price of this precious commodity will only continue to go up.
What does this have to do with my true love giving me five gold rings a day for six days? A lot, those five gold rings will be worth a lot more in the future than they are today, and those rings that were purchased years ago are worth a lot more than you paid for them. This all sounds good we are after all making money and increasing our net worth right, and you don’t see an correlation at all.
Let me explain. If you choose to schedule jewelry on your homeowner’s insurance policy that item is given a stated value and that value hasn’t changed since you stated what it was however many years ago that was, and that means that you are currently underinsured.
I will give an example. This past summer a good friend of mine was robbed. She had insured some jewelry a few years ago when she bought the items. She simply brought her receipt to her insurance agent and asked that they be scheduled onto her policy, and her insurance agent happily complied with the request. When she made a claim this past summer her insurance company paid her what she had agreed on – the amount that she paid for it, but when she went to replace the items she discovered that of the five gold rings she could only replace two of them with the amount that the insurance company had paid her.
At the beginning of the contract both my friend and the insurance company were in agreement as to the worth of the jewelry and what was to be insured. The insurance company fulfilled its end of the bargain, it paid the amount agreed upon, but the value of the item had drastically changed.
Are you in a similar situation? Have you had your jewelry appraised lately? Are you currently underinsured because of the rise in the price of gold? It’s high time you found out. Call your agent today and rectify the problem.


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