Understanding jewellery insurance: Here's all you need to know about securing your gold against risks
Indian households hold 25,000-30,000 tonnes of gold, valued at nearly $5 trillion. With limited bank locker availability, experts recommend jewellery insurance to cover risks like theft and natural disasters, especially as gold prices rise.
Indian households on average hold some 25,000-30,000 tonnes of gold (mostly as jewellery and coins). Divided across 24 crore census households, this works out to about 100-150 grams per household, worth ₹15-20 lakh at current prices, according to Sachin Sawrikar, Founder and Managing Partner of Artha Bharat Investment.
The value of household gold is nearing $5 trillion — and makes up a sizable 65% of the non-property stock of their wealth, a Kotak Institutional Equities report dated 18 March showed.
What are the secure options to store gold jewellery?
Most Indians keep their gold at home or in bank lockers. Bank lockers are designed to provide protection against theft and environmental damage. But lockers are limited in number and not always available, especially in metro cities, where demand can exceed supply, making it a scarce and highly coveted service.
Further, while bank lockers are a secure option, to counter risk, it is better to ensure that the items stored do not exceed the liability coverage.
This is because, under the Reserve Bank of India (RBI) rules, banks cannot be held responsible for the contents of lockers unless the loss is due to theft, burglary, fire, or staff negligence. Even under these circumstances, in case of loss of assets, you are covered for up to 100 times the locker rent. The average rent for bank lockers ranges from ₹5,000 to ₹10,000, depending on the bank's charges and locker size, which puts your cover at ₹5-10 lakh.
This is where experts suggest opting for jewellery insurance to appropriately secure the remaining gold jewellery. The process is uncomplicated, as explained by Gibin John, Senior Investment Strategist, Geojit Investments Limited, “To avail of this insurance, the customer must submit a valuation certificate. Based on the value mentioned in the certificate, the insurance company charges the premium. This policy generally provides coverage against risks such as theft, robbery, fire, and natural calamities, as specified in the policy document. However, it does not cover wear and tear, manufacturing defects, or gradual damage.”
What is jewellery insurance?
Jewellery insurance is a standalone policy or a home insurance add-on cover for jewellery items that provides coverage for loss, theft, and damage to your precious items, safeguarding them against various risks. It is separate from home insurance, which, depending on the plan, may cap liability for your possessions and also have exclusion clauses for theft and natural disasters.
Ashwini Dubey, Business Head – Home Insurance at Policybazaar.com, highlighted to Mint the importance of jewellery insurance in cases where loss is caused by “acts of god” such as earthquakes or floods. He did note that there are comprehensive "All-Risk" home insurance plans that cover burglary, theft, fire and natural disasters, including valuables kept at home and bank lockers, for an additional premium.
Should ordinary investors consider jewellery insurance?
The exact answer depends on your needs. If the jewellery at home is covered by your home insurance, or if the value of items in the locker does not exceed the liability coverage, you may not need separate plans for the precious items.
Further, even beyond the coverage, bank lockers are considerably safe. From a physical security perspective, the RBI mandates CCTV surveillance—footage must be kept for 180 days—secure access control, fire-resistant vaults, and natural disaster readiness.
According to Dubey, there are several factors to consider while debating whether you need jewellery insurance. First is that gold prices are hitting record highs. “Replacing stolen or lost jewellery out-of-pocket can be financially devastating for an ordinary middle-class investor,” he noted.
Mathematically, he added that the premium for jewellery insurance in India is generally quite affordable (often ranging around 0.5% to 1% of the total insured value annually). When we do the math at 1%, for jewellery worth ₹50 lakh, the annual premium works out to ₹50,000.
He also noted that the use of the jewellery is an important factor to consider. If it is something that will be moved between home and locker frequently, insurance would cover the safety aspect and reduce the stress of theft or loss.
| Benefits of jewellery insurance | |
|---|---|
| Benefit | Details |
| Adequate coverage | The ability to safeguard your jewellery against unforeseen circumstances such as theft, burglary, loss, damage or fire. |
| Protection at home | It is a necessity if you want to keep your loved jewellery at your home and not store it in a bank locker. |
| Flexibility | You can choose a sum insured that suits your needs. |
| Natural calamities | Get protection for your jewellery against natural calamities, which are more likely to cause damage to houses and contents inside. |
| All round coverage | The coverage of jewellery is not only restricted to homes, rather extends to shops and exhibitions as well. |
| Source: HDFC Ergo | |
How does jewellery insurance operate? What should you keep in mind?
Dubey offered the following checklist when opting for jewellery insurance:
- List all jewellery that one is willing to insure and share it with the insurer to be mapped with the insurance policy. It is advisable to obtain a valuation certificate from a certified and reputable jeweller. This document details the weight, gold purity (karatage), gemstone details, making charges, and the current market replacement value. This value becomes your “Sum Insured”.
- Keep ownership proof ready and documented wherever possible, and keep video and photos as proof of ownership.
- Keep digital copies of bills, certificates, and clear photographs of your family wearing the jewellery in a cloud drive.
- Dubey also suggests going for an all-risk home insurance policy.
- He noted that in cases of theft, burglary, or chain-snatching, an immediate police FIR is mandatory.
- Sawrikar added that for heirlooms, agreed value policies are preferable to indemnity policies.
- He also noted that the sum insured must be reviewed annually — for reference, gold prices rose 35% in FY25 alone.
What does jewellery insurance not cover?
- Insurance does not cover everyday wear and tear.
- Damage caused during cleaning or repairing by a goldsmith.
- Losses resulting from willful negligence.
- Newly bought items. These will need to be added to the existing policy with an additional premium.
- According to the HDFC Ergo website, if the insured items are replaced or sold for new ones, the replacement does not automatically get insurance cover. “The insurance protects only those items that are listed at the time of taking the insurance,” it stated.
- It further added that jewellery confiscated due to default in EMIs is not a loss that is covered by the insurance company.
- In case you are travelling outside the country, check for geographical limits, if any.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or companies, and not of Mint. We advise investors to check with certified experts before making any investment and financial decisions.