You are currently viewing Own It, Wear It, Protect It: Insuring Your Watch
(Nathan Aguirre/Unsplash)

Own It, Wear It, Protect It: Insuring Your Watch

Ask any watch lover whether they think watches belong on your wrist or tucked away in a box, and they will tell you, “Watches are meant to be worn!” Whether you collect timepieces as a hobby or see them as a good investment, it doesn’t make sense to spend thousands on a luxury watch just to keep it hidden out of an abundance of caution.
Insuring Your Watch
(Nathan Aguirre/Unsplash)

What Your Warranty Covers

Warranties are great but limited. And some work better than others. Take Rolex, for example. This timeless luxury brand offers one of the best warranties in the industry in that it covers any original manufacturing issues for five years. If, after four years, you notice your watch is losing time, or maybe the pushers or crown don’t function correctly, then you can bring it to any Rolex service center or official dealer, and they will repair it free of charge. In addition, Rolex gives you a service warranty, which means if you bring your timepiece in for service before your regular warranty period expires, you will get an additional two-year service warranty on any work that Rolex does on your watch. The standard in the industry was a two-year warranty guarantee before Rolex expanded its warranty service to five years. Omega moved to a five-year warranty in 2018, while Cartier and Jaeger-LeCoultre each continue to have two-year warranties. However, they also offer extended warranties for up to eight years and care plans that include free maintenance, size adjustments, engraving services, and other personalized benefits. The extended warranties and care plans will cost you extra, though.

What Your Warranty Doesn’t Cover

Just about everything you or someone (or something) other than the factory does to your watch is NOT covered. For example, most warranties will not take care of servicing or repair due to accidents, theft, loss, normal wear and tear, acts of God, your kids playing with your watch, etc. So what happens when you trip and fall, accidentally denting your new Panerai Luminor’s case? Or if thieves relieve you of that prized Rolex Datejust while you’re riding the subway home from work? This is where insurance can offer a bright, shining ray of sunshine. And with a simple Rolex watch repair costing as much as your average mortgage payment, you’ll be happy you protected yourself from what could have turned into a monumental financial loss.

All Insurances Are Not Created Equal

That said, you will want to take some time to research which type of insurance best suits your interests. You have different options depending on how much coverage you want and the value of your watch or collection.

Homeowner’s Insurance

Typically, your average homeowner’s policy will cover jewelry, watches, and other collectibles only up to about $1,000 to $2,000. So while your Baume Moonphase will have adequate protection, your vintage Omega Speedmaster Moonwatch will not. Another critical note is that some homeowner’s insurance policies may not cover loss or damage while you’re away from home, which can make traveling with your favorite timepiece riskier. Many like to take out a ‘floater,’ a supplemental jewelry policy that ‘floats’ on top of your homeowner’s insurance. When setting up a floater, you will want to ensure that your valuables are protected for their total value against damage, hazards, accidental loss, theft, and ‘disappearance’ or mysterious loss. Accidental loss represents an event where you know what happened to your watch, such as when your Grand Mastiff used it as a chew toy. Mysterious loss means you have no clue where your timepiece disappeared or whether it has been lost or stolen. Depending on your state’s rules, floaters generally carry an additional premium of around 1 percent to 2 percent of the overall worth of your item and do not require a deductible. The major downside to going through your homeowner’s insurance? The loss of a $30,000 watch will show up as a home claim and drive your homeowner’s policy premiums through the roof. Other cons include having to buy coverage and providing appraisals for each piece of your collection. This can get tedious and expensive.

Private Jewelry Insurance

While private jewelry insurance costs about the same as a floater policy, watch and jewelry insurers provide many additional customizable options. These include:
  • Zero-deductible plans
  • No required appraisals for items valued up to $100,000
  • Plans that insure your entire collection on one policy
  • Worldwide coverage
  • Watch repair and preventative servicing with a trusted firm of your choice
  • Item recovery at 125 percent to 150 percent of appraised value
That last item represents an incredibly critical aspect of your insurance, as watches tend to appreciate in value over time. According to a Frank Knight 2021 Wealth Report, the auction watch market is on fire, with sales up 52 percent over the previous year. Rolex and other luxury watch values also continued to climb. So what happens if you accidentally lose your Cartier Tank Louis after 20 years of ownership and your insurance still has it valued at its original price? Without increased item recovery protection based on current market values, you could find your watch woefully underinsured when you go to replace it. Even with this protection, we recommend watching market trends for your items and revaluing them with your insurance company as necessary. Private jewelry insurance may add to your bottom line, but isn’t it worth knowing that your favorite wristwear is fully protected? Yeah, we thought so.

Video