Insurance for Antique Damaged Stone

[elrohwen]

I''m having some insurance issues with my engagement ring. The setting is new, but the stone is an antique and is chipped. We previously had it insured with Travelers, as part of our home insurance. We recently switched over to State Farm because it was cheaper, but they are unable to insure the ring because of the existing damage to the stone. They recommended Jewelers Mutual insurance, but as I was trying to sign up for that their website said they do not insure antique jewelry or anything damaged. Jewelers Mutual also requires the appraisal to be within the last 18 months - my appraisal was within the last 20. I''d really prefer to go with a company that doesn''t require me to get it re-appraised.

Now I feel kind of stuck. What other options are out there that will cover an antique stone that isn''t in perfect condition? Our other option is to just go back to Travelers for our home insurance because at least they''ll cover the ring, but I''d prefer not to do that if we don''t have to.

 

[bgray]

how much is the stone worth per your last appraisal?

 

[elrohwen]

The whole ring is worth about $8700.

 

[bgray]

I guess a couple of thoughts: have you considered having the stone cleaned up --chip polished out? 8700 is a lot of money but if you are going with a more costly policy just to cover it it may not be worth the premium. For example: I have my ring under-insured (for the original purchase price of the stone and setting). This is far less than the current price of an equivalent stone. However the increased premium would negate the difference. It may not be worth insuring. Not because its not worth anything. I am not saying that --but because of the premium cost.

EDIT ADD: If you could get the stone polished and the chip removed for a reasonable amount of money then that might solve your problems

 

[denverappraiser]

As I recall, Travelers offers a stand-alone jewelry policy but the details vary from state to state. Talk to your Travelers agent about it. It may be an option to have Travelers on your jewelery and State Farm on your home.

In general, insurers don’t want to insure things with previous damage both because it confuses the whole topic of what is covered and what isn’t. Old damage can be aggravated to become a new problem and it becomes an issue of deciding how much to attribute to the old and how much is new. Not surprisingly, it can lead to a fight at claims time because they and consumers tend to have very different ideas on how this should be split.


In terms of ‘antique’, I think you should have little trouble with JM since it’s a new ring set with an older stone. The problem with insuring antiques is that most policies are agreeing to replace a lost item with another of ‘like kind and quality’ rather than agreeing to cut a check for the bottom line value of the policy. This means that it needs to be possible to replace the item in the case of a loss. Normally what will happen is that they will hire a jeweler to make a new one and then beat them up on the price but this obviously would not result in an antique. An alternative is to hire a jeweler to source a genuine antique that’s comparable but this results in an item that may be quite different. Finding an identical antique is usually simply not a choice. Consumers tend to think the solution is that the insurer should pay in cash whatever your appraiser thought the retail price should be. Not surprisingly, the insurers aren’t interested in this because they have no way of knowing in advance if your chosen appraiser is either an idiot or pursuing an alternative agenda that may be contrary to the company’s (and/or your) interests.

You might consider getting it repaired, regardless of how you handle the insurance issues. They're right that there's some added risk associated with pre-existing damage.

For high value items, the Chubb stand alone policy may be a good option for you because they are a declared value type policy. In the case of a loss they pay a predetermined amount rather than trying to shop for a replacement piece. They have a minimum policy amount that seems to vary from agent to agent and most seem to be over your 8700 limit but try contacting one and see if they have something that fits your situation.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[elrohwen]

Bgray, the premium cost under Travelers was not expensive - the renters insurance in total was more expensive than State Farm, but the jewelry portion of that wasn't outrageous. I suppose I may be able to negotiate with them based on the price we're getting with State Farm. I would be willing to pay a higher premium with a jewelry-only insurer, but so far I haven't been able to find one that will insure my stone.

I'm not interested in having it re-cut or polished - it's an antique that's been in DH's family for generations, not an antique we purchased, so I wouldn't be comfortable having it modified. Besides, it's a beautiful stone as is, the cut is fantastic, and the chip is hidden by prongs, so it's not a big deal to me. It only seems to be a big deal to the insurance companies.

I'm also hesitant to not insure. The stone is fairly large, but the appraisal price is low because of the chip. To find a similarly sized stone (without a chip) and reset it could easily be $12k, so I feel like insuring it for $8700 is already under-insuring, if that makes sense. I wouldn't be able to replace my ring with a similarly sized stone for the same price because I don't think I'd be willing to purchase one with such a large chip (if anyone would even sell a stone with a chip like mine - it would probably be polished out before re-sale by a vendor). If I lost my ring, we would never be able to afford something comparable.

 

[elrohwen]

Date: 2/28/2010 12:38:23 PM
Author: denverappraiser
As I recall, Travelers offers a stand-alone jewelry policy but the details vary from state to state. Talk to your Travelers agent about it. It may be an option to have Travelers on your jewelery and State Farm on your home.

In general, insurers don’t want to insure things with previous damage both because it confuses the whole topic of what is covered and what isn’t. Old damage can be aggravated to become a new problem and it becomes an issue of deciding how much to attribute to the old and how much is new. Not surprisingly, consumers tend to have very different ideas on how this should be split when claims come up.


In terms of ‘antique’, I think you should have little trouble with JM since it’s a new ring set with an older stone. The problem with insuring antiques is that most policies are agreeing to replace a lost item with another of ‘like kind and quality’ rather than agreeing to cut a check for the bottom line value of the policy. This means that it needs to be possible to replace the item in the case of a loss. Normally what will happen is that they will hire a jeweler to make a new one and then beat them up on the price but this obviously would not result in an antique. An alternative is to hire a jeweler to source a genuine antique that’s comparable but this results in an item that may be quite different. Finding an identical antique is usually simply not a choice. Consumers tend to think the solution is that the insurer should pay in cash whatever your appraiser thought the retail price should be. Not surprisingly, the insurers aren’t interested in this because they have no way of knowing in advance if your chosen appraiser is either an idiot or pursuing an alternative agenda that may be contrary to the company’s (and/or your) interests.

You might consider getting it repaired, regardless of how you handle the insurance issues. They''re right that there''s some added risk associated with pre-existing damage.

For high value items, the Chubb stand alone policy may be a good option for you because they are a declared value type policy. In the case of a loss they pay a predetermined amount rather than trying to shop for a replacement piece. They have a minimum policy amount that seems to vary from agent to agent and most seem to be over your 8700 limit but try contacting one and see if they have something that fits your situation.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

Thank you! This was awesome information. I''ll call Travlers on Monday and see if there''s anything they can do. They might willing to renegotiate our home insurance if I bring up what State Farm is charging as well.

I definitely understand the reluctance to insure a damaged item from the point of view of the insurance company. Also, your description of the process is helpful. In the case of loss, I would be fine with a jeweler reproducing the setting - in the case of most policies, would it be possible to purchase another antique stone? I wouldn''t be willing to replace my ring with an RB of equal value, if that makes sense (it would probably be half the size of my current stone, and I prefer antique stones anyway). I would be disappointed if this was my only option.

I''ll check with Chubb as well. It sounds like what I would prefer, but of course if they won''t insure for my price amount that won''t be an option.

 

[denverappraiser]

There’s a large marketplace for antique and antique reproduction diamonds. Nearly every diamond ever mined is still out there after all.

Some have been recut to newer designs, some are at the bottom of the ocean or whatever but, for the most part, diamonds recycle just fine. You haven’t given much detail about your stone but if your appraisal is reasonably complete, it shouldn’t be difficult for a good jeweler to find a suitable replacement if the need arises.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[dreamer_dachsie]

Polishing isn''t really altering the diamond in my opinion, and if it would make the chip less of an issue for insurance then it could be worth considering. It might also help with the longevity of the diamond, even if covered by a prong a chip could still pose an issue for additional future damage.

 

[elrohwen]

I just looked up Chubb and they have a $12k lower limit. However, this minimum can be based on more than one piece of jewelry. I do have another ring and my wedding ring, but I don''t know if they would quite bring the total price up to $12k (they''re not appraised at the moment). The wband was $700 and I''m guessing the other ring would be $2k or less. Maybe I''ll just have to buy another jewelry piece to put me over the limit

 

[bgray]

Date: 2/28/2010 12:44:40 PM
Author: elrohwen
Bgray, the premium cost under Travelers was not expensive - the renters insurance in total was more expensive than State Farm, but the jewelry portion of that wasn''t outrageous. I suppose I may be able to negotiate with them based on the price we''re getting with State Farm. I would be willing to pay a higher premium with a jewelry-only insurer, but so far I haven''t been able to find one that will insure my stone.


I''m not interested in having it re-cut or polished - it''s an antique that''s been in DH''s family for generations, not an antique we purchased, so I wouldn''t be comfortable having it modified. Besides, it''s a beautiful stone as is, the cut is fantastic, and the chip is hidden by prongs, so it''s not a big deal to me. It only seems to be a big deal to the insurance companies.


I''m also hesitant to not insure. The stone is fairly large, but the appraisal price is low because of the chip. To find a similarly sized stone (without a chip) and reset it could easily be $12k, so I feel like insuring it for $8700 is already under-insuring, if that makes sense. I wouldn''t be able to replace my ring with a similarly sized stone for the same price because I don''t think I''d be willing to purchase one with such a large chip (if anyone would even sell a stone with a chip like mine - it would probably be polished out before re-sale by a vendor). If I lost my ring, we would never be able to afford something comparable.

Okay --that all makes perfect sense.

 

[elrohwen]

Date: 2/28/2010 12:55:22 PM
Author: dreamer_dachsie
Polishing isn't really altering the diamond in my opinion, and if it would make the chip less of an issue for insurance then it could be worth considering. It might also help with the longevity of the diamond, even if covered by a prong a chip could still pose an issue for additional future damage.

I guess I just feel that it wouldn't be ok to mess with it at all, considering it's DH's family's stone. Does that makes sense? If it was an antique that we purchased I wouldn't have a problem with it, but because of its historical significance I don't think I'm ready to take that step.

Also, the chip is fairly large, as far as chips go and I'm not sure polishing alone would take care of it. It's not just a little ding in the girdle or something.

 

[elrohwen]

Date: 2/28/2010 12:55:21 PM
Author: denverappraiser
There’s a large marketplace for antique and antique reproduction diamonds. Nearly every diamond ever mined is still out there after all.

Some have been recut to newer designs, some are at the bottom of the ocean or whatever but, for the most part, diamonds recycle just fine. You haven’t given much detail about your stone but if your appraisal is reasonably complete, it shouldn’t be difficult for a good jeweler to find a suitable replacement if the need arises.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

That makes me feel better

 

[dreamer_dachsie]

Date: 2/28/2010 1:00:11 PM
Author: elrohwen

Date: 2/28/2010 12:55:22 PM
Author: dreamer_dachsie
Polishing isn''t really altering the diamond in my opinion, and if it would make the chip less of an issue for insurance then it could be worth considering. It might also help with the longevity of the diamond, even if covered by a prong a chip could still pose an issue for additional future damage.

I guess I just feel that it wouldn''t be ok to mess with it at all, considering it''s DH''s family''s stone. Does that makes sense? If it was an antique that we purchased I wouldn''t have a problem with it, but because of its historical significance I don''t think I''m ready to take that step.

Also, the chip is fairly large, as far as chips go and I''m not sure polishing alone would take care of it. It''s not just a little ding in the girdle or something.

Yes, I can see your POV. If you think of the diamond as being "on loan" to you for your lifetime, but really owned by the family at large and future generation, then you can''t really do anything to it. Do you have any photos that show the chip? I am curious, that''s all.

 

[elrohwen]

For reference, here''s the ring and stone in question. This picture probably shows the chip the best - it''s on the lower left, by the prong. It''s not inside the stone, but it does extend down the pavillion.

 

[elrohwen]

I did some cropping of the same pic - it might be easier to see here.

 

[dreamer_dachsie]

It looks beautiful. can you see the chip in person?

I''m not an expert in such things, but it does look like polishing would not really help, since it seems to be slightly deep. Its shame it got damaged in its past! How long has it been in the family?

 

[elrohwen]

Date: 2/28/2010 1:04:34 PM
Author: dreamer_dachsie
Yes, I can see your POV. If you think of the diamond as being 'on loan' to you for your lifetime, but really owned by the family at large and future generation, then you can't really do anything to it. Do you have any photos that show the chip? I am curious, that's all.

That's a really good way of putting it, D_D! I do think of it as being "on loan". I had to reset it, because it was in a man's ring, but beyond that I don't really feel comfortable altering it in any way. I attached some pictures - any expert opinion on the chip are welcome! I think it's pretty big, though most people I show it to can't even see it, even when I point out exactly where it is (I don't think they're trying to be nice either). But it's pretty obvious to me. Even while holding my hand out I can tell which corner the chip is in. It would bother me on a purchased stone, but on an antique I guess it add character

eta: We don't know exactly how long they're owned it, but DH's father, grandfather, and great-grandfather all wore it in a large gold man's setting. The setting was very protective, so we're fairly sure it was set in something else previous to that or was chipped while being reset.

 

[denverappraiser]

That’s quite a bit of damage. By wearing it in that condition you are distinctly pushing your luck with regard to future problems. In my opinion, you would be doing a favor to your descendants to get it repaired now, before it gets worse. It's hard to tell without seeing the girdle at the chip. When you had it reset into this new mounting and appraised, did either the jeweler or the appraiser discuss this issue with you?

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[elrohwen]

Date: 2/28/2010 1:15:43 PM
Author: denverappraiser
That’s quite a bit of damage. By wearing it in that condition you are distinctly pushing your luck with regard to future problems. In my opinion, you would be doing a favor to your descendants to get it repaired now, before it gets worse. When you had it reset into this new mounting and appraised, did either the jeweler or the appraiser discuss this issue with you?

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

We knew the chip was there, but the jeweler didn''t really discuss the potential for breakage. They mentioned we could have it recut if we wanted, but didn''t act like it was necessary.

 

[elrohwen]

This was its previous setting (unfortunately I didn't take any pics before we had the stone removed). As you can see, it's pretty protective (only the very bottom of the pavillion was exposed under the setting), so I'm not sure how it could've chipped. It could've happened in a previous setting, but we don't know anything about it before this ring.

It was also appraised back in the '80s I think (when DH's dad owned it) and nothing was said then about having it re-cut.

 

[denverappraiser]

Your appraiser 20 months ago saw the stone and you hired them for their expertise… I'm just an unknown guy on line and all I’ve seen is a picture so I’ll defer to him/her. How does the appraisal report describe it?

By the way, your pictures are really good.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[elrohwen]

Date: 2/28/2010 1:15:43 PM
Author: denverappraiser
That’s quite a bit of damage. By wearing it in that condition you are distinctly pushing your luck with regard to future problems. In my opinion, you would be doing a favor to your descendants to get it repaired now, before it gets worse. It's hard to tell without seeing the girdle at the chip. When you had it reset into this new mounting and appraised, did either the jeweler or the appraiser discuss this issue with you?

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

What would the options be for repair? I would be very nervous about having it re-cut, as it could totally change the appearance and personality of the stone. Is it possible to glue it? Not sure if that's the correct terminology, but is there a way to keep it from getting worse without completely getting rid of the chip?

 

[elrohwen]

Date: 2/28/2010 1:22:01 PM
Author: denverappraiser
Your appraiser 20 months ago saw the stone and you hired them for their expertise… I''m just an unknown guy on line and all I’ve seen is a picture so I’ll defer to him/her. How does the appraisal describe it?

By the way, your pictures are really good.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

Well, more experts are always good. My jeweler is skilled and makes a lot of custom pieces, so I want to trust them (they also performed the appraisal). But I definitely respect the opinions of PSers and other professionals. I certainly don''t want to knock it into something and totally lose the stone.

It specifically states: A large girdle chip can also be noted crossing a facet junction and reaching into a crown facet and the pavilion. It also extends and crosses a pavilion facet and extends to the culet.

Sounds pretty bad all typed out! Haha.

 

[dreamer_dachsie]

It is kind of a funny twist on the diamond''s history that is went from being worn by men for three generations to becoming an e-ring!

I have read that chips can happen when a setting is struch and the setting itself puts pressure on the diamond. So I suppose the damage could have happened from an indirect strike, not just from the diamond being hit directly.

 

[elrohwen]

Date: 2/28/2010 1:30:28 PM
Author: dreamer_dachsie
It is kind of a funny twist on the diamond's history that is went from being worn by men for three generations to becoming an e-ring!

I have read that chips can happen when a setting is struch and the setting itself puts pressure on the diamond. So I suppose the damage could have happened from an indirect strike, not just from the diamond being hit directly.

Interesting. It was in that setting for a long time, so it's certainly possible that it took an indirect strike.

It is funny that it was in man's ring. Most people don't believe me, because who would want an almost 2ct stone in a man's ring? (other than Kenny or DF) Lol. Certainly not DH! He had no second thoughts about resetting it for me. His grandfather used to wear it a lot, but his dad only wore it a handful of times while he was alive, so it wasn't really getting much use in its last setting.

 

[denverappraiser]

Date: 2/28/2010 1:28:38 PM
Sounds pretty bad all typed out! Haha.

Yeah, that’s why the insurance underwriter balked.

Date: 2/28/2010 1:28:38 PM
Author: elrohwen
Well, more experts are always good.

Not necessarily. All opinions are not of the same merit and the “9 out of 10 people surveyed” approach is fraught with trouble. You’ve got an expert opinion from someone who you’ve had an opportunity to meet and evaluate and who you found to be qualified, who has themselves had the opportunity to personally inspect the piece and who has put their opinions in writing and signed it. That’s huge. If you’re debating the usefulness of their advice, find a different expert that you think may be more suitable and have them do the same as the above so you can reasonably compare. We can certainly help guide you in asking the right questions and perhaps advise on a methodology on how to proceed but it’s a mistake to take a free forum as expert advice, even if the participants are otherwise experts themselves. So far, this sounds like a pretty good jeweler by the way.

I think you’re right that replacement of a piece with that much damage would be difficult and valuation in it’s present condition is a very skewed issue (It’s an I2 clarity at best). A replacement I2 would likely be very different in character. You’ve given an $8700 value and a $12k valuation in the various posts above. Where did these numbers come from? What are the rest of the details on that stone (from the appraisal report)? What did the mounting actually cost 20 months ago?

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[elrohwen]

Date: 2/28/2010 1:48:32 PM
Author: denverappraiser

Date: 2/28/2010 1:28:38 PM
Sounds pretty bad all typed out! Haha.

Yeah, that’s why the insurance underwriter balked.

Date: 2/28/2010 1:28:38 PM
Author: elrohwen
Well, more experts are always good.

Not necessarily. All opinions are not of the same merit and the “9 out of 10 people surveyed” approach is fraught with trouble. You’ve got an expert opinion from someone who you’ve had an opportunity to meet and evaluate and who you found to be qualified, who has themselves had the opportunity to personally inspect the piece and who has put their opinions in writing and signed it. That’s huge. If you’re debating the usefulness of their advice, find a different expert that you think may be more suitable and have them do the same as the above so you can reasonably compare. We can certainly help guide you in asking the right questions and perhaps advise on a methodology on how to proceed but it’s a mistake to take a free forum as expert advice, even if the participants are otherwise experts themselves. So far, this sounds like a pretty good jeweler by the way.

I think you’re right that replacement of a piece with that much damage would be difficult and valuation in it’s present condition is a very skewed issue (It’s an I2 clarity at best). A replacement I2 would likely be very different in character. You’ve given an $8700 value and a $12k valuation in the various posts above. Where did these numbers come from? What are the rest of the details on that stone (from the appraisal report)? What did the mounting actually cost 20 months ago?

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

Thanks for your advice! I didn't have much luck finding appraisers in my area (other than driving into NYC) and the jeweler said they would do it automatically as part of the re-setting, so I left it at that.

The $8700 is the value on the appraisal, including the setting (which we paid $2500 for, including the additional small diamonds) which means the diamond's worth is probably around $6k (they didn't break out the worth of the stone, I'm just doing the math myself based on how much the setting cost).

However, searching for stones of the same size (on Old World Diamonds) gives me price ranges from $7-10k and up for a stone the same size. Plus another $2k at least for a setting, a comparably sized stone in the same setting could run me $10-12k, by my estimation. It would be very hard to find the same sized stone for the approximately $6k that it is appraised at. You're right that getting a different I2 stone could be a disaster. And I wouldn't purchase a stone with such a large chip either, for obvious reasons.

 

[denverappraiser]

Your jeweler IS an appraiser, which is fine. I don't know if they're qualified or not but I'll take your word for it and the fact that they aren't 'independent' is not a problem in this situation.

What are the rest of the details listed about the stone?

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[dreamer_dachsie]

OK, this is gonna sound crazy, but I am not sure if buying separate insurance for your ring is really that great an option anyways.

You will never replace the sentiment, so it doesn't help with that. You did not pay out of pocket for the diamond, so you don't need insurance to cover that either. I have no clue what they would try to offer you as "like kind and quality" if it were lost anyways! I don't think you would want what they would offer. So what does insurance really get for you? The only way it would help is if you get a cash-out policy so that you can buy what you like with the insurance money. But that will cost more. In a sense, you only really need to cover the cost of the setting. Typically, your homeowners policy automatically covers jewelery up to a certain value (in our case it is $5k), with a small deductible. The only benefit to a separate rider is to cover a greater value or to have no deductible. In your shoes I would be tempted to just let the home owner's policy cover the setting (which would require an appraisal listing its value), and just accept the risk on the diamond.

And yes, my husband works in insurance