Another question about insurance....

[togal]

I'm about to mail off my appraisal via registered mail to my insurance company so that my ring can be separately insured on our home-owners policy. Here's the problem.....the appraisal valuation of the ring is almost twice what I paid for it and what I know I could replace it for, unless, of course, I was to purchase it at one of the really high-end B&M stores, in which case the valuation would be more-or-less correct. I know that insurance companies rarely pay-out in cash...and would in all liklihood send me to a discount diamond broker for my replacement. When I got my appraisal from GemScan (one of Canada's most highly regarded and widely used appraiser), I asked them to give me a low-end evaluation, which apparently they did...but it's still very high and the monthly insurance premiums are, therefore, quite expensive. Any thoughts on how I can lower the premiums? Sometimes, I think insurance just isn't worth it (ie. I could save the money myself in a contingency fund)....but then again, I'd be foolish not to, I guess. Should I try to get my ring appraised by a smaller, independent appraiser who will low-ball the value or is that silly?

 

[diamondseeker2006]

Send a copy of the sales receipt and insure it for the amount you paid. It is crazy to overpay for insurance.

 

[Mara]

find out if your insurance company will insure for a value you specify. some will use the receipt, some will use the appraisal, some let you choose something in between. i chose something in between the appraisal and what i paid.

in terms of what is smart to insure, think about it like this...how much can you replace the diamond for? if it's $5k and the insurance appraisal is $10k, i would not overpay if you know that what you are looking for is easily found for $6k out there. insure for $7k to buffer if you want.

my stone was kind of a needle in a haystack to find and in about 6 months i wouldn't be surprised if it was just as hard to find AND more expensive because of the way price hikes have happened to 2c+ stones for the last few years. so i took that into account when insuring the stone because i don't want to be getting a new appraisal every 6months a stone prices increase on larger stones. so i buffered that next increase in right now. sure i'll pay an increased premium for a few months (by not much $$) but at least the next time the price hikes happen i am still covered.

lastly, i would only insure the stone if you can not easily replace it if it is lost. i didn't have insurance on my last stone because if i lost it or it was damaged, i could have replaced it on my own. but this new stone, no way can i afford to pay out of pocket if something happened to it, so i had to get it insured. but if you can replace the stone, i wouldn't pay for insurance on the 'off chance' something happens to it. it can add up over the years and eventually may catch up with the cost of the stone itself!

 

[togal]

Date: 5/24/2006 6:51:18 PM
Author: Mara
find out if your insurance company will insure for a value you specify. some will use the receipt, some will use the appraisal, some let you choose something in between. i chose something in between the appraisal and what i paid.

in terms of what is smart to insure, think about it like this...how much can you replace the diamond for? if it''s $5k and the insurance appraisal is $10k, i would not overpay if you know that what you are looking for is easily found for $6k out there. insure for $7k to buffer if you want.

my stone was kind of a needle in a haystack to find and in about 6 months i wouldn''t be surprised if it was just as hard to find AND more expensive because of the way price hikes have happened to 2c+ stones for the last few years. so i took that into account when insuring the stone because i don''t want to be getting a new appraisal every 6months a stone prices increase on larger stones. so i buffered that next increase in right now. sure i''ll pay an increased premium for a few months (by not much $$) but at least the next time the price hikes happen i am still covered.

lastly, i would only insure the stone if you can not easily replace it if it is lost. i didn''t have insurance on my last stone because if i lost it or it was damaged, i could have replaced it on my own. but this new stone, no way can i afford to pay out of pocket if something happened to it, so i had to get it insured. but if you can replace the stone, i wouldn''t pay for insurance on the ''off chance'' something happens to it. it can add up over the years and eventually may catch up with the cost of the stone itself!

Thanks. Unfortunately, my insurer will only insure based on the appraisal value and not by a dollar amount that I request. I was calculating the cost of the premiums, and agree that it could eventually catch up to the cost of the ring (my rings are all soldered together, so if something happens to one, I lose all three). I do have basic jewellery coverage as part of my homeowners insurance.....so if, by some fluke, something were to happen, there would be some coverage, and I could foot the rest of the bill myself.....I think in the long-run that might be the better way to go. Of course, Murphy''s law may come into play now that I''ve decided that...

 

[diamondseeker2006]

Did you ask them if they would insure for the amount you paid??? My insurance company will.

 

[sfritz]

You should get another insurance appraisal if your current appraisal lists a value significantly higher than your purchase price. If you got a really great deal on the diamond, then you should expect the appraised value to be somewhat higher. However, over insuring just doesn''t make sense.

Keep in mind that the cost of gold and larger diamonds has been going up. You don''t want to be underinsured, either. In our experience, individuals who shopped online for months for the perfect diamond at a great price were not interested in waiting that long for a replacement wedding ring. Often, they want the jeweler to find the diamond based on the specs in the appraisal. Consider what markets you might use to replace the item in two years when your life may be even busier than today; maybe it''s a mix of online and B&M stores, but not the high-end stores. Let the appraiser know that.

Ask your homeowners insurance agent about the coverage differences for scheduled (e.g., listing specific items with values for each) and unscheduled jewelry. Most HO policies will pay only $1,000 or $2,000 for unscheduled jewelry due to a theft loss. Your other option is a stand-alone jewelry policy.

Sue Fritz
Jewelers Mutual Insurance Company

 

[denverappraiser]

Talk to your appraiser. If they have appraised it for significantly more than you can replace the piece they have done you a disservice. The asking price at high B&M retailers is irrelevant unless this is the only reasonable approach to replacement. The purpose of the amount on the appraisal is to provide a maximum limit of liability for the company, not the expected amount. If you have a loss and the company buys a replacement, you can bet that they won’t be paying full fools retail at the most expensive store in town (They may shop at that store but they get a discount because they're a big and repeat client).

The jewelry insurance that comes ‘free’ with homeowners policies tend to have a lot of restrictions and it’s prudent to be aware of what is, and what is not covered. Mysterious disappearance and partial loss due to damage are examples of things that are regularly excluded for example. It’s hard to beat the price and in many cases it’s sufficient for what you want but it’s not the same as a stand-alone jewelry policy, even if it’s issued by the same company.

Self insuring as you describe is an entirely reasonably strategy for people with the appropriate temprament and budgets. It makes little sense to insure against losses that you are prepared to absorb yourself without serious difficulty.


Neil Beaty
GG(GIA) ISA NAJA
Professional Appraisals in Denver

 

[WinkHPD]

Date: 5/24/2006 2:41:27 PM
Author: diamondseeker2006
Send a copy of the sales receipt and insure it for the amount you paid. It is crazy to overpay for insurance.

This is NOT a good idea. I agree it is silly to overpay for insurance, but you need a good appraisal that correctly states the value and also ALL of the pertinent information. Your vendor should be asked to provide you with an accurate appraisal, not an overstated one.

Your appraisal needs to include all of the information available to you, including but not limited to, what laboratory did the report and the report number, (assuming it has one), what the measurements of the stone are and if known the angles, color, clarity, and a photograph of the jewelry as well as a description of the jewelry. If the diamond is branded that information MUST be in the appraisal if you expect to receive a branded diamond if it ever needs to be replaced. Same with the jewelry, if you are paying for a Scott Kay piece and the information about that piece is not in the appraisal then you are not going to get a Scott Kay when it is replaced.

Sending a receipt may establish a value paid, but it will normally not come close to assuring you that what you bought originally is what you get upon replacement. Get a good appriasal, whether from the original vendor or from an independant appraiser is not important.

Wink

 

[diamondseeker2006]

Date: 5/25/2006 10:16:58 AM
Author: Wink

Date: 5/24/2006 2:41:27 PM
Author: diamondseeker2006
Send a copy of the sales receipt and insure it for the amount you paid. It is crazy to overpay for insurance.

This is NOT a good idea. I agree it is silly to overpay for insurance, but you need a good appraisal that correctly states the value and also ALL of the pertinent information. Your vendor should be asked to provide you with an accurate appraisal, not an overstated one.

Your appraisal needs to include all of the information available to you, including but not limited to, what laboratory did the report and the report number, (assuming it has one), what the measurements of the stone are and if known the angles, color, clarity, and a photograph of the jewelry as well as a description of the jewelry. If the diamond is branded that information MUST be in the appraisal if you expect to receive a branded diamond if it ever needs to be replaced. Same with the jewelry, if you are paying for a Scott Kay piece and the information about that piece is not in the appraisal then you are not going to get a Scott Kay when it is replaced.

Sending a receipt may establish a value paid, but it will normally not come close to assuring you that what you bought originally is what you get upon replacement. Get a good appriasal, whether from the original vendor or from an independant appraiser is not important.

Wink

She already has an appraisal, so I wasn''t suggesting not getting one. I meant that she could prove what she paid by including the sales receipt. However, I suppose it might have been a better idea to have shared that with the appraiser that she wanted the ring covered for it''s TRUE replacement value at the outset, and that would be what she paid. Naturally it would have to be adjusted upward for inflation over time. But if you buy a ring, insure it, and lose it the next month, you should be able to replace it for almost the same thing as you paid. It only makes the insurance company richer to overinsure as they aren''t going to write you a check for that insured amount in most cases. The appraisal establishes the specs of the stone and setting to be replaced, so I can''t see overpaying for an inflated value when the insurance company isn''t going to pay top retail price to replace it anyway.

 

[togal]

Thanks for your replies. I''m still a bit confused as to what I should do though....

I do have a very detailed appraisal from a respected, independent appraiser. It lists all the measurements of the unset centre stone, plus all the details of the side bands, which as I mentioned, are all soldered together to make one ring. I think I could replace my ring, right now, based on what I paid, for just under $10K which would include taxes (15% here in Ontario). My appraisal value is $14K (pre-tax). The problem is that the price of the insurance jumps significantly per thousand after it hits the 10K mark. On the other hand, if I don''t have my ring re-appraised for a few years, the cost of replacement would match the appraisal value. Insurance is approx. $360 per year or $30/mo. Does this seem reasonable? I realize it''s an individual decision, but I''m just curious what others would do.

 

[diamondseeker2006]

That sounds high to me. I''d consider price shopping a bit. I''d probably check that Jeweler''s Mutual insurance after reading the positive posts about it form Wink and Heather, I think it was. It seems like our jewlery riders are about $10 per thousand, but I''d need to check to be sure.

 

[togal]

Date: 5/25/2006 11:58:16 AM
Author: diamondseeker2006
That sounds high to me. I''d consider price shopping a bit. I''d probably check that Jeweler''s Mutual insurance after reading the positive posts about it form Wink and Heather, I think it was. It seems like our jewlery riders are about $10 per thousand, but I''d need to check to be sure.

Jeweler''s Mutual.....never heard of it. Are they in Canada? (I''ll GOOGLE them). I know that most insurance companies don''t do stand-alone policies, as I checked around.

 

[diamondseeker2006]

I do not know what countries they do business in. But they are one of the few that will do stand-alone jewelry policies, apparently.

 

[sfritz]

Date: 5/25/2006 12:00:32 PM
Author: togal

Date: 5/25/2006 11:58:16 AM
Author: diamondseeker2006
That sounds high to me. I''d consider price shopping a bit. I''d probably check that Jeweler''s Mutual insurance after reading the positive posts about it form Wink and Heather, I think it was. It seems like our jewlery riders are about $10 per thousand, but I''d need to check to be sure.

Jeweler''s Mutual.....never heard of it. Are they in Canada? (I''ll GOOGLE them). I know that most insurance companies don''t do stand-alone policies, as I checked around.

Jewelers Mutual plans to offer Personal Jewelry Insurance in Canada later this year, but that program is not yet available there. Sorry.

Sue Fritz
Jewelers Mutual Insurance Company

 

[WinkHPD]

At $360 for a $14,000 ring that comes to about 2.571% premii, or $25.71 per thousand if my math is correct. That would be a good rate for LA or NYC, but way out of line for Idaho. Do you live in a big city or a small town? For a $10k ring appraised at 14k you are paying an extra $102.84 per year for the insurance if you do not talk to your appraiser about changing the value to reflect what you paid, rather than a more normal retail price.

As Diamond Seeker states, you already have an appraisal, it just needs to be corrected to reflect the market you are in.

Wink

 

[WinkHPD]

Sue,

Nice to see you come clarify things for us. Good news for our Canadian friends to hear that you are soon to be in Canada!

Wink

 

[Modified Brilliant]

Date: 5/26/2006 11:18:45 AM
Author: Wink
Sue,

Nice to see you come clarify things for us. Good news for our Canadian friends to hear that you are soon to be in Canada!

Wink

I second that!

www.metrojewelryappraisers.com

 

[togal]

Thanks everyone for your replies....they helped alot....especially Wink''s.

I live in Toronto....so I suppose the high appraisal value/insurance prices are reflective of this. I can''t get the appraiser to lower the value. As I mentioned, GemScan is the largest and most respected appraisal service in Canada. I asked them to low-ball the value, and this is, in their opinion, the value of the ring at the low-end of the spectrum....they wanted to value it at $16,000 at the median and $18,000 at the high-end...so it is what it is, and there''s not much I can do about that.

I think I''m going to purchase the rider with my current house-hold insurer until such time as Jeweller''s Mutual is available in Canada. As soon as I can, I will switch. I read up about Jeweller''s Mutual on their website, and it looks like the best option price-wise. Thanks, Sue, for letting us know that they are coming to Canada. We are going on vacation soon and I want to be able wear my ring without worry, so this is important to me.