Synopsis: This article explains everything about gold insurance- starting from what it is, various types of gold insurance, how gold insurance works, what they cover and do not cover, the cost of gold insurance, and gold insurance claim rules you should know.
According to Business Research Insights, in 2025, the global jewellery insurance market is valued at $5.28 billion and is projected to reach $10 billion by 2030s. Additionally, according to the World Bank, in India, the annual growth rate of gold jewellery ownership is 15% during 2020-22. With such an increase in gold jewellery ownership, demand for insurance coverage for these valuable items also increases.
What is Gold Insurance?
Gold insurance is a type of property insurance used to protect gold items and other precious jewellery against financial loss from events like theft, loss, accidental damage, etc. This broadens the protection for jewellery, as previously it was completely based on home insurance content limits or bank locker protection.
Types of Gold Insurance
- Standalone Jewellery Insurance: It’s an insurance policy that’s specifically designed to cover gold and other jewellery items.
- Home Insurance Add-on for Jewellery: Some home insurance policies also cover jewellery under the contents they cover.
- Jewellers Block Insurance: This policy is designed to insure jewellery of retailers, wholesalers, jewellery dealers, and manufacturers.
How Gold Insurance Works?
People usually buy insurance for jewellery when they buy high-value jewellery, such as gold, during weddings or festivals. While some jewel sellers do offer short-term insurance with the purchase of gold, it’s advisable to take separate gold insurance for your valuables.
When buying gold insurance, the value of the items covered should be disclosed by providing purchase bills and a valuation certificate from a certified valuer to the insurer. Accurate valuation of the jewellery is crucial as the coverage limit and premium are dependent on these metrics.
If the jewellery gets lost, stolen, or damaged, the policyholder can inform the insurer immediately, along with the FIR filed, claim form and other documents required. Once processed, claims are paid according to the policy norms and the insured value declared at the time of purchase.
What Does Gold Insurance Cover and Not Cover?
| Coverage Type | Covered or Not Covered |
| Theft, Burglary, Robbery | Covered |
| Fire and Explosion | Covered |
| Natural Disasters | Covered |
| Accidental Damage | Covered |
| Damage or Loss during Transit | Covered if included in the policy |
| Worldwide Cover | Covered if included in the policy |
| Exhibition Cover | Covered if included in the policy |
| Personal Wear Cover | Covered if included in the policy |
| Bank Locker Cover | Covered if declared in the policy |
| Normal Wear and Tear | Not Covered |
| Cleaning or Repair Breakage | Not Covered |
| Intentional/Negligence Damage | Not Covered |
| Loss without Proof | Not Covered |
| Undeclared items | Not Covered |
Also read: Best Performing Mutual Funds: 7 Large-Cap Funds That Delivered Over 30% CAGR in Last 3 Years
Premiums-Cost of Gold Insurance
The cost of gold insurance depends on the value of gold declared and the level of risk involved. Factors that decide the cost of gold insurance:
- Premiums: They are usually a fixed percentage of the insured value of the gold. Therefore, as the value of the insured gold increases, the premium also increases.
- Storage: The location where the gold is stored is a crucial deciding factor. If the insured gold is stored in homes in unsafe areas or lacks necessary security systems etc can lead to a high premium. Storing in bank lockers or other secure storage can attract lower premiums
- Add-ons: If add-ons such as worldwide cover, personal wear cover, exhibition cover, etc., are included in the gold insurance policy, this can lead to a higher premium.
- Claim History: The past claim history of the individual affects the premium for gold insurance. Policyholders with frequent claims might get charged higher premiums than policyholders with a clean claim history.
Gold Insurance Claim Rules You Must Know
1. Jewellery must be insured: Gold insurance can be claimed only for the items thats been declared while taking the policy. Items that are not declared are not covered under the insurance.
2. Inform Insurer Immediately: If the insured gold is damaged, stolen, or lost, inform the insurer immediately. Delay in informing the insurers of relevant documents can lead to a delay in settlement as well. Ideally, the insurer should be informed within 24-48 hours.
3. File an FIR: For incidents involving theft, robbery, or loss, it is mandatory to file an FIR with the police. The documents of the same should be submitted to the insurer while claiming compensation.
4. Submit proof of ownership and valuation: As claims are settled based on the declared value at the time of policy purchase, documents such as the purchase bill and valuation certificate should be submitted to claim.
5. Claim during the active policy period: Only the incidents occurring during the active policy period of the claim shall be covered. Losses before policy issuance and after expiry of the policy are not covered
6. Cooperate with the survey or assessment: The insurers often conduct a survey or assessment to assess the loss. Full cooperation with these assessments is essential for fast settlements.
7. Updated documents: As the prices of gold keep changing, the valuation documents should be up to date, or else they can lead to lower claim payout.
8. Settlement: Final payout is subject to the terms and conditions of the policy. It takes into consideration factors like depreciation, policy excess, etc. However, the payout is capped at the sum insured.
Documents Required for Insurance Claim Payouts
- Filled and signed claim form
- Copy of gold insurance policy
- Proof of ownership and value
- FIR filed in case of theft or robbery
- Photographs of the damaged item
- Valid ID Proof such as Aadhaar, PAN or passport
- Bank details with account number and IFSC code
- A report explaining the incident
- Other documents, such as estimates from a surveyor or assessor.
Conclusion
With rising gold prices, more people are owning gold. There are ongoing risks like theft, loss, and accidental damage. Relying only on home insurance or bank locker liability may leave significant gaps in coverage. As gold continues to increase in value and ownership rises, choosing the right gold insurance policy is not just a precaution; it’s essential.
Written by Nila Maria Jacob
