if stone is insured, do you need USPS insurance?

[stebbo]

Date: 10/1/2007 9:47:21 PM
Author: WorkingHardforSmallRewards

but if it fell out because the prongs had been worn down and messed up because of daily wear and tear then wouldn't the loss of the diamond be indirectly caused by the daily wear and tear of the prongs, meaning that it would fit under the definition of non-covered damages?


Edit: I just read stebbos post...it makes sense, but I think I will check out chubbs site later and see if I can find a definition of wear and tear, as that seems somewhat dangerously broad, especially when you include it could be the indirect cause of some greater loss.

Especially the word 'tear' - is it tear when you catch a prong on some fabric and it breaks off?

The majority of times they seem to be pretty fair when making claims however. Hard to believe after watching "Sicko" last night.

Maybe 'wear and tear' means you're not covered if you shed tears when wearing it? (good message to future proposers - get her opinion on the ring first, and don't marry someone too romantic).

 

[stebbo]

Here's a good page on how to mail jewelry securely:

http://www.jewelersmutual.com/commercial/securitySafety/safeShipping.htm

It's meant more for businesses, but a lot is applicable to the consumer as well.

Another thing to note is when sending by USPS, the declared value isn't written on the parcel--it's just kept electronically.

 

[diamondseeker2006]

I always us the Priority Mail box from the PO (about 12 x 14") for the outer box, because I figure there are millions just like it going through the mail everyday. And that is the same size box the vendors have sent things to me as well.

 

[elmo]

Date: 10/1/2007 10:14:24 PM
Author: stebbo
Here''s a good page on how to mail jewelry securely:


http://www.jewelersmutual.com/commercial/securitySafety/safeShipping.htm


It''s meant more for businesses, but a lot is applicable to the consumer as well.


Another thing to note is when sending by USPS, the declared value isn''t written on the parcel--it''s just kept electronically.

At the JM site, this is my favorite:

7. Avoid shipping packages to/from ZIP codes 10036

Unfortunately even though registered mail declared value isn''t on the box, it''s calculated into the postage. So with a 1lb box you can estimate a value. Something else to remember is that if you plan to use the USPS insurance, you must declare the actual value, not something else. Again they base postage on that, and I think will reject a claim if your declared actual value is too low.

 

[belle]

Date: 10/2/2007 7:58:11 AM
Author: elmo


At the JM site, this is my favorite:

7. Avoid shipping packages to/from ZIP codes 10036

why is that?

Date: 10/2/2007 7:58:11 AM
Author: elmo


Unfortunately even though registered mail declared value isn''t on the box, it''s calculated into the postage. So with a 1lb box you can estimate a value. Something else to remember is that if you plan to use the USPS insurance, you must declare the actual value, not something else. Again they base postage on that, and I think will reject a claim if your declared actual value is too low.

good point!

 

[oldminer]

In the beginning of this thread is some misinformation that ought to be corrected.

Registered Mail does not automatically insure an item. Your are required to state the value being shipped in order for proper security to be taken. Understating the value voids all liability and is illegal.
Any shipper can insure up to $25K with Registered Mail. Jewelers can purchase additional coverage not available to the general public. If a package has a value of over $25K you are required to state the value, pay a handling surcharge, but only still have $25K of insured coverage. I didn''t make the rules, but I have lived with them for a long time.

In case of a loss, which is very rare, be very prepared to prove the value of the shipment. If you hgave no evidence of the value, you will have one heck of a time getting paid. You are likely to get only whatever your cost was, not any inflated value you assumed was present. Proof of cost is the best evidence you can supply. An appraisal based on a major lab document, in the case of a diamond, may work okay too, but you will be asked to prove ownership and the purchase date, etc. If you inherited the item, be prepared to say from whom, when and when the inheritance tax, if any, was paid.

Registered Mail is very safe, but there are rules. (And it is slow in delivery)

 

[stebbo]

Date: 10/2/2007 8:44:25 AM
Author: oldminer
In the beginning of this thread is some misinformation that ought to be corrected.

Registered Mail does not automatically insure an item. Your are required to state the value being shipped in order for proper security to be taken. Understating the value voids all liability and is illegal.

I'm sure ericad was assuming that one was legally mailing the item (ie. declaring its value and having no choice but to pay the extra fee) when he said it was automatic.

 

[denverappraiser]

For clients with 3rd party insurance like a JM personal jewelry policy or a scheduled rider with most homeowners policies, FedEx may be a better approach than USPS. FedEx requires that a ‘declared value’ be supplied on the package and they provide the following definition of ‘declared value’.

“The declared value of any package represents our maximum liability in connection with a shipment of that package, including, but not limited to, any loss, damage, delay, misdelivery, nondelivery, misinformation, any failure to provide information, or misdelivery of information relating to the shipment. It is the shipper's responsibility to prove actual damages. Exposure to and risk of any loss in excess of the declared value is assumed by the shipper. You may transfer this risk to an insurance carrier of your choice through the purchase of an insurance policy. Contact an insurance agent or broker if you desire insurance coverage. WE DO NOT PROVIDE INSURANCE COVERAGE OF ANY KIND.”

Copied from the FedEx terms and conditions here.

They are quite specific that they don’t offer insurance of any kind for the property but rather are agreeing to assume some limited liability related to the handling of the package while in their care. This means that the declared value to FedEx can be lower than the insurance value of the property as long as you are willing to assume the risk yourself. If you can sell that risk to someone else, for example an insurance company, FedEx has no issue with it. They in fact flat out recommend it. Once again, the details about what is covered and what is not are listed in your specific policy. These details are important and will not be the same for every company or even for every policy offered by the same company.

For people who don’t have 3rd party insurance or who simply don’t know and don’t want to take the trouble to learn the details of their policy, I still recommend USPS registered mail and buying the Post Office offered insurance. In most cases it's not very expensive. If you’ve got a policy that you are going to rely on and need advice on the details about what is covered or how a claim should be expected to be handled, call your company or your agent.

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

 

[niceice]

Date: 10/1/2007 9:14:57 PM
Author: stebbo

Date: 10/1/2007 4:00:18 PM

Author: niceice

Date: 10/1/2007 3:42:38 PM

Author: ericad

FYI, registered mail automatically includes insurance for the first $25k.

Actually insurance for registered mail packages is an Option with insurance coverage available Up To $25K - the cost of which is about $38.00 according to the rate calculator on USPS.com

Sure on this Todd? You legally have to declare the value, then they charge the appropriate fee based on the value. I didn''t think it was optional.

Positive. My response here is two fold. First, the statement I was making was in response to the statement that "registered mail automatically includes insurance for the first $25K" the fact is that insurance is not included in the purchase price, it is an additional option. Second, the registered mail form has an area that asks the value of the contents and then to the right of that there are two boxes (1) says "with insurance" and (2) says "without insurance". I suppose that the reason is that many jewelry store insurance policies provide coverage for transport via registered mail. The USPS limits the amount of coverage that they are willing to offer to $25K, but our Jewelers Mutual block provides an additional $25K in coverage so we could either ship without USPS insurance and be covered up to $25K or ship up to $50K by purchasing the additional $25K in coverage from JM. Note that we added the shipping declaration to our policy, I don''t believe that it is standard issue.

 

[oldminer]

2.3 Fees and Liability
2.3.1 Full Value
Regardless of any insurance that may cover the article, the mailer must always declare its full value to the USPS when presenting it for registration and mailing (see chart below). The mailer must tell the USPS clerk (or enter on the firm sheet if a firm mailer) the full value of mail matter presented for registration. Private insurance carried on Registered Mail does not modify the requirements for declaring the full value. The accepting USPS employee may ask the mailer to show that the full value of the matter presented is declared, and may refuse to accept the matter as Registered Mail if a satisfactory declaration of value is not provided. Only articles of no value may be mailed as Registered Mail without insurance.
The above is a direct quote from the USPS regs. I have no idea who has gotten in trouble with the PO for not following the regulations, but a consumer with a single ring of great value would hate to find out the hard way. While some insurance companies may insure your shipment, you MUST declare full value, more than likely the provable replacement cost or the actual cost, when you ship Registered Mail. You won''t collect more from the USPO than a price you can prove with sufficient documentation.

Other methods of shipment may be easier for consumers or more insurance company reliant. USPS has regulations which are clearly stated.

 

[stebbo]

Date: 10/2/2007 1:46:16 PM
Author: niceice


Positive. My response here is two fold. First, the statement I was making was in response to the statement that 'registered mail automatically includes insurance for the first $25K' the fact is that insurance is not included in the purchase price, it is an additional option. Second, the registered mail form has an area that asks the value of the contents and then to the right of that there are two boxes (1) says 'with insurance' and (2) says 'without insurance'. I suppose that the reason is that many jewelry store insurance policies provide coverage for transport via registered mail. The USPS limits the amount of coverage that they are willing to offer to $25K, but our Jewelers Mutual block provides an additional $25K in coverage so we could either ship without USPS insurance and be covered up to $25K or ship up to $50K by purchasing the additional $25K in coverage from JM. Note that we added the shipping declaration to our policy, I don't believe that it is standard issue.

This insurance stuff is harder to work out than cut!

So where the excerpt Dave posted above from USPS's site says "Only articles of no value may be mailed as Registered Mail without insurance.", they must mean "any insurance, doesn't have to be ours". I wonder why they care... There's some funny subrogation business going on here.

So the question is, if you are covered by a personal policy and you tick the "without insurance" box, do you have to pay the extra fee based on the value that you still legally have to declare? And why do you still legally have to declare it? Anti-smuggling maybe? Now I'm visualizing the letter from the IRS 30 years down the track: "We know there's a $20000 diamond in the estate under probate, pay up".

(btw Todd, was there a happy ending to your Fedex/OGI saga?)

 

[denverappraiser]

The position of the Post Office is that the fee is a handling charge that results from making a ‘declared value’. The insurance is ‘free’ with every handling fee purchase up to $25k. Over $25k, you are still expected to declare the value and to pay an ever increasing fee but the insurance doesn’t improve. It could be argued that this is a theft of service. This in turn opens up the opportunity for the ‘loss that occurred while in the commission of a crime’ exclusion for the insurance company. It’s definitely a can of worms. The fact that they’re Feds may make it a patriot act problem as well although I don’t pretend to understand that law.

USPS has other services, like express mail, priority mail and even first class mail where they don’t ask this question. With those services, the fee is optional and is for ‘insurance’. With these the coverage is up to the limit of the value of the contents or the amount of insurance you purchase, whichever is lower. Don’t ask – don’t tell would apply here and you could buy $100 worth of insurance on a $10k item if you wanted as long as you or someone else is willing to take the risk for the remaining $9900 if it doesn''t safely arrive.

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

 

[oldminer]

While you are "required" to provide the value in the shipment for Registered Mail, you can opt out of insurance coverage provided by the post office. The "Handling Fee" for non-insured value is less than for when you want government insurance.

The reason for give by the Post Office to customers for paying the Handling fees all is that it covers the requisite security and care necessary to safely deliver fragile, valuable or irreplacemable packaged items. It has to do with the degree of risk taken to make the delivery and to make sure that each postal employee takes care of each package properly. I know this sounds like hot air, but very few packages are damaged or lost compared to other methods. Since I am in no position to question the authority of the Post Office and their regulations, I simply abide by them.

If you feel you have insurance on items being shipped and use Registered Mail, declare the replacement value, decide if you want Postal insurance or to opt out of Postal coverage knowing the facts. Its all petty cash when compared to suffering a tragic loss.

 

[Lorelei]

Date: 10/1/2007 9:15:03 PM
Author: Ellen
Um, what's 'inherent vice'?


*feeling stupid*

El I am fairly sure with a diamond that an inherent vice could mean pre - exisiting damage to a diamond, such as a chip or crack, or something else that might make damage or loss more likely. Maybe one of our expert chaps can clarify?

 

[denverappraiser]

‘Inherent vice’ is a clause that appears in pretty much every insurance contract. It means that sometimes the damage is the result of something that’s simply inherent to the item. If, for example, we were talking about a piece of furniture that a mover breaks and there was undetected dry rot in the piece, this would be an inherent vice and a claim would likely be denied. In the case of jewelry this comes up if you have pre-existing damage that you know about and refuse to fix. For example if a prong is broken off and you know about it, you can’t later file a claim about the stone falling out later when you refused to fix it. Occasionally the insurer can use the inherent vice clause if the damage is clearly the result of a manufacturing defect but more likely in this case, they’ll pay the claim to keep the client happy and go against the manufacturer for restitution.

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

 

[Lorelei]

Thanks Neil

 

[niceice]

Date: 10/2/2007 9:44:52 PM
Author: stebbo

Date: 10/2/2007 1:46:16 PM

This insurance stuff is harder to work out than cut!

So the question is, if you are covered by a personal policy and you tick the ''without insurance'' box, do you have to pay the extra fee based on the value that you still legally have to declare? And why do you still legally have to declare it? Anti-smuggling maybe? Now I''m visualizing the letter from the IRS 30 years down the track: ''We know there''s a $20000 diamond in the estate under probate, pay up''.

btw Todd, was there a happy ending to your Fedex/OGI saga?)

No extra fee is collected based upon the declared value of the package if USPS insurance is not purchased. Playing with the online rate calculator provided for shipping insured domestic packages on
USPS.com provides excellent insight into how the system works and the cost of insurance.

Regarding our Fed Ex / OGI saga from a few years back, for those of you not familiar with the event we shipped an OGI inscription machine back to OGI for calibration via Fed Ex Ground packed quite carefully. OGI received the package mangled to the extent that they believed the box was dropped off the back of a moving truck. The impact was enough to severely dent the 1/8 thick metal casing that is the outer shell of the unit. All of the internal components were free floating and broken. We had used two inch thick corregated cardboard and foam to protect the unit (inside and out). We had purchased "insurance" at the Fed Ex counter and Fed Ex had the opportunity to inspect the package and contents at the station. The Fed Ex counter representative had asked us whether we wanted to insure the package - which we did for $50K - she specifically used the word "insurance". Fed Ex Ground Claims (a separate division that Fed Ex Air) denied the claim and said something to the effect that we had not purchased "insurance" but rather the right to have them "consider" the stated value of the contents in the event of loss or damage. The "we do not sell insurance" part of their disclaimer did not actually appear on their declarations page until my brother who worked for a California State Senator at the time sunk his teeth into their posterior quite deeply! We tried to approach the challenge of getting Fed Ex to take responsibility for their mishandling of the package from several directions including the insurance commissioners office, highway safety department (they handle truck licensing and truck related insurance issues) to no avail, it seemed that pursuing the matter in court would cost more than the expected outcome.

I have to say that this is when most of the "professional trade associations" that we belong to confirmed themselves as more or less useless in our eyes because they didn''t want to get involved beyond accepting our initial letter of complaint - one of them is the trade association which provides us with member discounts through the Fed Ex DVX (declared value exception) program and was in the process of negotiating a contract with Fed Ex Ground at the time - I spoke with the person in charge of the program and offered our experience as what they might expect from Fed Ex Ground in terms of claims resolution in the event of a claim - they proceeded with the program anyway. I''m guessing that it''s all about the service kick back, right?

Darn, was that out loud?

Yes, we still ship via Fed Ex Air - DVX. I have to say that the service we''ve received from the kids on that side of the fence has been excellent! But when it comes to ground service, we ship USPS.

 

[oldminer]

The USPS site is misleading in that it does not explain you MUST declare a VALUE on things of VALUE to ship registered mail. It is a simplified website and not the way the postal system actually works. You can send documents of no value Certified Mail or Registered Mail. Registered Mail is far more likely to be carefull handled and delivered versus Certified Mail. It costs a lot more, too. For years I have sent my Federal and State tax returns via Registered Mail.

Once you get past items of no value, Registered Mail is one of three ways to ship USPS with insurance coverage. You have Express mail up to $5,000 which does not require you to declare any value or the full value, Insured mail which has a rather low insurance limit, and Registered Mail which will cover the first $25K of declared value, provided you can prove it. Any value above $25K is the responsibility of the shipper, but USPS charges a handling fee over $25K. Commercial shippers with private insurance can pay less on the first $25K by declaring the full value and opting not to buy government insurance coverage. There still is a fee involved based on the value, but no insurance. You are required to state a correct value for Registered Mail. I know insurance salesmen have told many jewelers "don''t declare the value and we''ll cover you". No problem for the trade if you don''t mind having a potential, needless problem. I want a problem with the Post office about as much as I want a tax audit. It is just going to waste valuable time. For consumers, there is no way to ship registered mail with too low or no reported value when there is a value. The amount of a "value" may be questioned after a loss, but a reasonable approach goes in the right direction.

There are real misconceptions about this situation in the jewelry trade. Since we used to ship in excess of 10 million a year in valuable goods around the USA by Registered Mail, I made it my business to look into the details. Thankfully, in over 35 years, there were only two losses and both were paid after about 8 months and many pages of paperwork.

 

[Pandora II]

Personally, I don''t understand why anyone would send something through the post without insuring it to the hilt.

I recently sent my e-ring to Wink. I took out insurance before it ever left his office in the first place. I waited to send it to him till I was in the US as I don''t trust the international post, and then I shipped it with UPS with the Registered Post option and insurance.

The bill came to $20, which is nothing compared with the cost of my other policy. For a price like that why not have added peace of mind?

 

[Ellen]

Neil, thanks for the explanation.