Advice Needed: Insuring Pre-Loved Purchases

[FireMonkey]

Hi, PS!

How do you go about making sure your pre-loved purchases are properly insured against loss/theft? It's easy to provide the sales proof, along with photos of the pieces, when adding items to the policy. But, the amount paid on the pre-loved market is generally less than the replacement cost.

How do you handle?

 

[Bron357]

The normal approach is to get them valued by an appraiser.
It is very important you get the right type of insurance policy and understand what the policy says you will get in the event of a claim.
Read the fine print, read it again!
Note that you will pay your insurance premiums on that “insured amount”.
Household contents policy usually have a total limit for jewellery and a max price per single item for jewellery. This mightn’t be sufficient for your needs, so you might need a stand alone jewellery insurance policy. This is usually more expensive to buy but usually covers “loss or damage” anywhere / anytime. You must also check what the policy terms are that constitute “a loss” ie robbery has to be evidenced with signs of physical break in and a police report so forgetting to lock your back door or a friend of a friend visiting who seems to have taken x, y, z mightn’t be covered.
Household contents policy usually don’t cover you for damage or loss away from the home.
Then you need to check your policy terms as to what you will receive in the event of loss or damage. Some policies will only provide “like with like” and not the $$$ payment in cash for the sum insured.

 

[whitewave]

You need to get an appraisal.

 

[FireMonkey]

Hi, @Bron357

Thank you for the detailed reply. I agree that it's extremely important for everyone to understand the terms of applicable insurance policies.

In my case, I have a Jewelers Mutual policy, and schedule high-value items individually. However, I've never added a pre-loved purchase. Only newly purchased (watches), or newly-created custom pieces, where the maker provided all the relevant appraisal/valuation documentation.

So, how does it work when you buy on the secondary market? Do you ask the original maker to provide an evaluation? Because an independent appraiser may or may not value the item at the actual replacement cost. He/she may reach a number simply based on the components of the piece, not accounting for the cost to have it remade by the same designer. See what I mean?

I'll reach out to Jewelers Mutual.

Thanks again!

 

[FireMonkey]

Hi, @whitewave - I'll excerpt part of my note to @Bron357 above:

So, how does it work when you buy on the secondary market? Do you ask the original maker to provide an evaluation? Because an independent appraiser may or may not value the item at the actual replacement cost. He/she may reach a number simply based on the components of the piece, not accounting for the cost to have it remade by the same designer. See what I mean?

This is the part that I have a mental block about, I guess. My inexperience is showing. Hahaha.

Thanks for the response!

 

[whitewave]

You ask for a realistic value.

Ask JM if they will accept the receipt to insure,.

I paid $2800. for estate dangles and they realistically appraised for $6800. So I am paying insurance for $6800. As far as I know, they are one of a kind and it would cost $6800 to find similar or to buy parts to replicate them.

 

[ChristineRose]

You work with the company and the appraiser to get what you want. The company may or may not be flexible.

For example, if you want that exact style, you will have to determine where you can buy it and pay premiums on that amount. If there's only one designer who makes it and they charge 3x as much as you paid, and there's not a reliable resale market, that's the amount you need to insure for, and that's the amount your appraiser should document and put on the appraisal.

Or you can look at more or less comparable used pieces and get the appraiser to find a few that are close, in which case the insurance company will find a few they can get cheap and either buy one for you or give you however much money you agreed on. If the ring is currently 2 years old and it' stolen in 5 years, expect to be offered a seven year old ring.

There's no single way to write an insurance policy and there's no single way to appraise the cost of a piece. Keep in mind that you get what you pay for, and if the policy isn't written to exactly what you expect you will also end up with the cheapest option that the insurer can fit into the terms. Specify cut quality, brand name, carats, karat, anything else that you're willing to pay for.

 

[FireMonkey]

Thanks a bunch, @whitewave - I appreciate the example.

Thank you to @ChristineRose, too - good info to consider. I'm certainly willing to pay premiums for an exact replacement, rather than a close approximation, when appropriate. So, I need to make sure the appraiser is aware that.

 

[Bron357]

An accredited appraiser will factor in all the components of the jewellery item in his valuation. For eg a 2 carat Tiffany ring will be appraised for more than the equivalent 2 carat diamond in a cast gold setting because to get a replacement Tiffany setting is x2 the cost of a similar but non Tiffany setting.
That said, some antique / vintage jewellery items cant be “replaced” they can only be “replicated”, so an appraiser will factor in the costs to hand cast etc a replica piece of similar quality workmanship. That’s also why you need a detailed appraisal with photos to submit to the insurer so there is no room for misunderstanding.
An appraisal saying “Natural Ruby ring of 3 carats estimated in setting of dimensions 10 x 8 mm in a 14kt White Gold setting weighing 9 grams” - isn’t the same as “Natural Ruby certified by GRS as being unheated, untreated and of Burma origin weighing 3.23 carats (report xxx dated xxxx) set in a hand cast 6 prong Art Deco filigree setting in 14kt gold weighing 9 grams”.
And of course, you may need to get updated appraisals every 5 years or so.

 

[FireMonkey]

@Bron357 - Very good points, and so helpful! I'm starting to get my brain unstuck from where it was yesterday. You know how sometimes you just have to let all the facts gel? Thank you for taking the time to assist!