Nothing might warm the heart of your loved one this Valentine’s Day like a beautiful piece of jewelry.  If you don’t want to break your Valentine’s heart should something happen to that jewelry, you might want to make sure it’s covered by insurance.

Homeowners and renters insurance cover jewelry, but this coverage might not be enough for the piece you buy this Valentine’s Day. The dollar limit for theft is low, the coverage is narrow, and the policy's deductible applies to all claims.

Coverage for jewelry is on a "named perils" basis. That means the jewelry is covered only if it disappears or is damaged due to things such as fire, theft, a windstorm or lightning. Depending on the insurance company, the most you will be reimbursed for a stolen diamond or other precious jewelry is between $1,000 and $5,000.

"De Beers [the diamond cartel] has done an excellent job of telling people to spend two months' salary on an engagement ring," says Don Griffin, property-casualty insurance expert at the National Association of Independent Insurers (NAII). "If you are fortunate enough to make more in two months than the amount covered by your homeowners insurance, your ring purchase will exceed what's covered by your policy if the ring is lost or stolen," Griffin warns.

"All-risk" policies make the claims process simpler

You have two options for additional insurance, if you need it for your Valentine’s Day purchase. You can buy a "floater" for your homeowners policy that covers the diamond up to the purchase price or its appraised value. You can also purchase a separate policy, which covers the jewelry.

A separate policy, or an add-on to your regular homeowners policy, will cover your jewelry on an "all-risk" basis. Such policies cover most, but not all, losses. You're not covered if the ring is damaged from normal "wear and tear" or "gradual deterioration," if a mouse or some other pest in your home takes it, if an invading army snatches the jewelry, or if it disappears in a nuclear attack. Otherwise, the coverage is quite broad. So, if the ring flies off your hand and falls through a sewer grate, the policy will pay to replace it.

"If your coverage is ‘named perils,’ you will have to prove to the insurance company that what happened to cause the damage is one of the perils named," says Griffin. "All-risk coverage means the insurance company would have to prove to you that what happened to the item is not covered. It's much easier to make a claim for theft or disappearance, for instance, on an all-risk policy. 'Named perils' coverage forces you to prove to the insurer that the ring was stolen, before they will pay your claim."

Griffin calls jewelry coverage "surprisingly inexpensive." A typical premium can range from $1.50 to $2.50 for each $100 of coverage. For a $6,000 ring, that amounts to $90 to $150 per year for a policy that pays the full replacement cost of the ring.

Whose name should be on the insurance?

Experts say it depends on your relationship.  "If you're not married yet or not living in the same place, once the ring is on her finger she might need her own coverage," says Griffin. "If the man buys it, once he is no longer in possession of it, he should probably not be insuring it."

Not so with all companies, says Mary Ann Avnet of the Chubb Group of Insurance Companies, which offers insurance for diamonds and other jewelry. "We'll write an engagement ring policy in either name," Avnet says. "We definitely see the need both ways. Sometimes the buyer of the ring prefers to insure it because he doesn't want to reveal what he paid. Other times the woman will insure it on her own."

To obtain insurance for your jewelry, you will need to present your insurance agent with a receipt for the item. If it's a family heirloom, have it independently appraised. Give the agent a copy of the receipt or appraisal, and keep the original in a safe place.

If the jewelry disappears, have no fear!

Avnet says the most common claim on jewelry insurance policies is for "mysterious disappearance," meaning there’s no indication whether the jewelry was stolen or simply lost.

"What happens, in so many cases, is literally disappearance," says Avnet. "People look for their diamond earrings and can't find them. Or they look in the mirror and discover they're only wearing one diamond earring, and the other one is gone. That's one of the best reasons to have jewelry coverage."

If the jewelry was insured on a homeowners policy, "mysterious disappearance" would not be covered, because you would need proof of theft before the insurance company would cover your claim. With "all-risk" policies or floaters, mysterious disappearance is always covered.

If the jewelry does disappear, mysteriously or not, your jewelry insurance will replace it.  That doesn’t necessarily mean the insurance company will pay the same amount you spent for the jewelry.

As the name suggests, “replacement value" policies replace your piece of jewelry with one that is exactly or virtually the same, even if the replacement cost is less than what you spent. "Even if you list something for $5,000 on your policy, if the insurer can obtain something similar for less money, they will often do it," says Griffin. Insurers can strike deals with jewelry stores or wholesalers to get a discounted price for replacement items.

Other policies, known as "true value" coverage, give you cash for the full amount you paid for the jewelry. "We say you can always go to a store of your choice, because people have loyalty to jewelers," Avnet says. "Or maybe someone prefers cash because a child is entering college and they cannot justify spending $10,000 on another ring."

Blanket coverage can protect smaller items

Of course, not everyone owns a $10,000 ring. Many people have jewelry collections without a single high-ticket item, but several less expensive ones. If you have an earring collection with 50 pairs of $50 earrings, losing some or all of them can be a big financial blow.

For the earring enthusiast or other jewelry owner, insurance policies can include "blanket coverage." That allows you to insure your jewelry collection for a total amount without requiring you to list every single item. "It makes sense to have at least some blanket coverage to fill that gap," Avnet says. "If your downfall is that a new pair of earrings hasn't been specifically added to your policy, and you lose one, blanket coverage lets you make a claim to replace it. Many people purchase blanket coverage to insure smaller pieces that are less valuable, picking a specific amount of insurance."