appraised value 14K higher

[kmans]

I have purchased a Ering costing 22K from BN and teh appraised value is 36K (they sent the appriased value quote along with the ring)

I contacted chubb insurance and they said they do it on the appraised value...i think the appaised value is really high to what i paid. and teh premium is around 780/yr (boston)

do you think its logical to get it insured at such a high value ....I am guessing that, if something does happen one can expect to get atleast the amount paid for the ring or do they actaully pay the full appraised value....any experience?? any thoughts?

 

[Jenn5504]

I have no experience with Chubb, but my diamond was recently damaged and I received appraised value from my personal articles policy with State Farm.

I just purchased my replacement ring and band on BN and I was a bit surprised by the high appraisals.....speaking of, I need to get over to my insurance agent with the new appraisals!

 

[neatfreak]

Date: 5/22/2007 3:39:39 PM
Author:kmans
I have purchased a Ering costing 22K from BN and teh appraised value is 36K (they sent the appriased value quote along with the ring)


I contacted chubb insurance and they said they do it on the appraised value...i think the appaised value is really high to what i paid. and teh premium is around 780/yr (boston)


do you think its logical to get it insured at such a high value ....I am guessing that, if something does happen one can expect to get atleast the amount paid for the ring or do they actaully pay the full appraised value....any experience?? any thoughts?

Is your policy a CASH OUT for the entire insured amount or a replacement? If a replacement, def. only insure for the paid amount, if a cash out, it''s your decision. The whole point of insurance is to make you whole again after your loss. Since you have gotten the ring at $22k before, if it were to be stolen tomorrow, you wouldn''t have to pay $36 for it would you?

I know others might disagree, but to me it makes no sense to insure for the higher value...

 

[shel]

Chubb has a deal with Blue Nile and won''t insure any of their rings for less than BN''s appraised value. But at least Chubb is a cash-out policy, meaning they will pay you $36K. Higher premiums though.

 

[kcoursolle]

Did you ask them if you can insure them for the purchase price instead? Does jewelers mutual do this?

 

[kmans]

They did say that they only use the appraised value and not the $$$ i actually paid

 

[Ellen]

Date: 5/22/2007 6:52:36 PM
Author: kmans
They did say that they only use the appraised value and not the $$$ i actually paid

Can''t you just go with another company?

 

[kmans]

Oh i think i definitely can do it and i plan do that...
I think the difference b/w the actual price and the appraised value is what shocks me.

 

[Ellen]

Date: 5/22/2007 7:09:51 PM
Author: kmans
Oh i think i definitely can do it and i plan do that...
I think the difference b/w the actual price and the appraised value is what shocks me.

Well, I agree that''s pretty hefty. We do get good deals online, and were we to replace offline it would definitely run more, but not this much.

 

[neatfreak]

Date: 5/22/2007 7:09:51 PM
Author: kmans
Oh i think i definitely can do it and i plan do that...

I think the difference b/w the actual price and the appraised value is what shocks me.

Unfortunately many appraisals are VERY inflated. In this case, Chubb obviously has a deal going with BN since they''ll only insure your stone for the appraised value, so Chubb gets more premiums and an exclusive deal with BN.

You can pick which value to use with Jewelers Mutual. You won''t get a cash out policy, BUT they will let you work with your own jeweler for replacement, which is better than many places who choose the jeweler for you.

 

[diamondseeker2006]

Date: 5/22/2007 6:52:36 PM
Author: kmans
They did say that they only use the appraised value and not the $$$ i actually paid

That sounds very odd, because I got a Chubb policy this year and insured my e-ring for an appraised amount (which I will explain in a minute), and I insured my diamond studs for the exact purchase price.

My e-ring diamond came with an inflated appraisal. So I got another insurance appraisal when we had it set, and the amount was lower. So my advice to you is to take it somewhere else and tell the appraiser you want a realistic replacement value for a stone bought on the internet, not a full high-end jewelry store value. (Example: stone cost $14,000, vendor appraisal $21,000, extra appraisal $18,000. Ring insured for $18,000.)

It really doesn''t matter where the stone came from. They do not have to ever see the BN appraisal. You can have your stone appraised anywhere you want or as many times as you want until you get an appraised amount you are pleased with. I would not insure that ring for $36,000.

 

[denverappraiser]

Special disclaimer: Insurance policies vary from state to state, company to company and even client to client. Read your own policy for details on what is a covered loss and how losses will be handled. If in doubt, ask your agent.

Where you want your declared value to be depends on your expectations of future diamond prices and your approach to insurance.

With the standard Chubb policy, they will pay cash in the case of a total loss for the full face value of the policy. If you then replace and the actual cost of replacement is higher they will add an ‘inflation’ adjustment of up to 50% to the cover the difference between the insured amount and your actual cost to replace.

Your rate is 2% of the declared value, so a declared value of $22k will result in premiums of $440/year with a maximum payout in the case of replacement of$33k. This maximum will come into play if the replacement price at your chosen jeweler is greater than $22k and less than $33k. If it’s under $22k you will have the opportunity to take the cash and pocket the difference. If it’s over $33k, you will need to make up the shortfall out of pocket. If you take the cash and/or choose to replace with something different, they payout will be at the $22k level. Assuming that the replacement cost of diamonds will increase over time (reasonably likely) and that the actual loss, should it ever occur, will be years in the future, this $22k cash payout will probably be inadequate to make replacement and you will find yourself underinsured unless you decide to replace and invoke the +50% rule. Maybe that’s what you would do anyway but you are, in effect, converting a $22k cash policy into a $33k replacement type policy by doing this.

If you declare the value of $36k, you will owe a premium of $720/year and the maximum replacement payout will be $54k. As with the above, this higher limit will only come into play if the actual replacement cost at your jeweler (Blue Nile) is between $36k and $54k. So, what do you get in exchange for that extra $280/year in premiums? This depends on what the actual cost of replacement turns out to be. If actual replacement is going to cost you less than $36k, you will be best off to take the cash settlement and simply shop on your own. If you need to spend $33k to replace, you will have $3k left in the bank. If you can replace at $22k, you will have $14k left over. In effect, you are buying an additional $14,000 policy against loss for a 2% premium. Here’s the kicker. The value of this will steadily DECREASE as the cost of diamonds goes up. It starts at 2% but if the actual replacement cost turns out to be $33k, the effective premium on this ‘extra’ coverage is a whopping 9.3%! At over $36k, it again starts to look like a replacement type policy.

You are not limited to only these two choices. You have the opportunity to hire an appraiser of your own who may be able to provide a realistic middle ground.

Clear as mud? Call your agent and ask them to explain it. They live for this stuff.
Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[RockDoc]

RE: Appraised ?

Selecting a value for a client for insurance isn''t something to be taken lightly, by you, the insurance company or the person writing the appraisal.

At 2% a year for the $14k written in excess of the selling price, the Blue Nile appraiser is going to result in an additional to cost you of approximately $ 280.00 per year ( assuming your premium rate is 2% per year). While there is some "common sense" basis to this ( i.e. price to buy at BN vs. price in a fine B&M jewelry store ) is factor that should be discussed with the client. I think when BN states that they would only accept the value of an amount in excess of the purchase price, they probably are unjustly enriching themselves, due to the fact that Chubb and BN have a relationship. This is probably more applicable to a replacement type policy instead of a stated value policy, as Chubb would pay the amount the item was insured for. However, in your instance, with Chubb REQUIRING coverage at the higher value, certainly mandates some closer and more intent consideration, because the amount of insurance be it more or less, should be your elected choice.

The outcome of this varies from state to state. In some states, if the insurance company gets premums for an insurance amount that is excessive, and 1) there is a claim and 2) they pay less than the insured amount - they are obligated to return the "unearned premiums". This however doesn''t apply in every state. Most states would hold the appraiser liable/ responsible for all the years of excessive premium charges. I''ve been an expert witness in such legal cases, where this was the issue, and the cost of an unjustifiable premium charge when caused by an inflated appraisal value is the issue at hand and generally the insured/appraisal client has won.


I love Chubb, but in this instance, I would suggest you take this matter up with a supervisor at Chubb and perhaps a supervisor in the appraisal department at Blue Nile. Blue Nile has a special relationship with "Chubb Direct". You could go to an independent Chubb agent, and probably the requirement would NOT be an issue, if you wanted to insure the item for its replacement cost on the internet. Perhaps you need to be more assertive in insisting the insurance amount be more "realistic".

My suggestion is to insure for an amount you could buy a comparable stone for on the internet, and be attentive to updating the insured value each year. That will save you in premium costs, and you''ll still be covered "properly".

Rockdoc

 

[Modified Brilliant]

RockDoc and Denver Appraiser...solid information, thanks! Jewelry appraisals, valuations, and replacement issues are
still very much a mystery to consumers. This is one area of our industry where communication with consumers has been
weak and confusing. Many consumers still believe that a "high" appraised value is a good thing....until they need to make a claim.
I always tell my appraisal clients to ask their agent "real world" questions regarding their item. "What will your company do if I lose my ring?"
"Break a prong?" "Damage a stone?" "What if my stone falls out of the mounting?"


www.metrojewelryappraisers.com

 

[Beacon]

I went through this exact thing. It's annoying. Chubb has a special arrangement w/ BN and they offer excellent insurance b/c they will give you the cash or replacement, your choice. Chubb normally will not issue a stand alone policy for a single piece of jewelry, so it's a good way to get in with them.

They know that BN gives an appraisal and they may demand it. Ask them if they will accept an appraisal from a different appraiser and instruct your new appraiser of your purchase price. If Chubb will accept the new, lower appraisal you will save money. I tried to get BN to give me a new, lower appraisal, but they flat out refused!

It is better than some places, like Jewelers Mutual, who will only give replacement of the stone. At least with Chubb you can get the money, which is what your premium is really paying for.

BTW, can you give the stats of your new stone? After all, we love new stuff to oogle!!