Insuring your diamond is not quite like insuring other items that you own, but as when shopping for auto or home owners insurance, shop around and compare.

Diamond insurance may also vary depending on where you live.

Three types of diamond insurance:

1. Actual cash value policy for diamonds

This type of policy will replace your diamond at the current market value, despite what you may have paid for your diamond at the time of purchase. Needless to say, this type of policy for insuring diamonds is rare.

2. Agreed value policy for diamonds

With an agreed value policy, the insurer will pay the amount that was agreed upon by you and the insurance company at the time the policy was taken out. This type of diamond insurance policy may also be called 'valued at', and in the event your diamond is damaged beyond repair or stolen they will pay the amount agreed upon.

3. Replacement value diamond policy

This is much more common than the first two policies that have been mentioned here. In this instance the insurance company will pay up to a fixed amount to replace a lost, stolen or severely damaged diamond. They will not necessarily pay the top amount. They will pay up to that amount. Often a diamond may be replaced for a lesser amount. the drawback to this policy is that you are paying rates based on the higher value of your diamond.

As with all insurance, diamond insurance costs will vary depending on many variables. One thing that can affect the cost is where you live, and how high the crime rate is in your locale. Also, consider when you are shopping, whether the coverage is only applicable if the diamond is lost or damaged in your home. If the diamond is often worn when you are away from home this could be important. This is a common glitch in coverage.

When you purchase a diamond of any value, you should also get a diamond certificate, and it should be obtained from an organization independent of your jeweler.

Just getting the certificate is some insurance, and help in identifying your specific diamond. And if will be beneficial when you are shopping for a diamond insurance policy. Having a certificate will give you a certain amount of bargaining power.

Do shop carefully, and read all the fine print. Make sure your insurance if going to cover your needs in the event your diamond is damaged or lost.