Inflated appraisals for insurance...good or bad?

[skypie]

I just bought a ring from WhiteFlash and Jeweler's Mutual offers you coverage without need for an appraisal. However they are valuing the ring about $5,000 more than what I paid for it.

Of course this increases my premium which seems to be a bad thing. But is there any upside to having an inflated valuation for insurance purposes?

 

[Gussie]

When I bought studs from whiteflash I just sent jm a copy of the receipt so I was insured for exactly what I paid. I am interested in the answer to this. I also know that jm will pay for the replacement of the specs on the diamonds. So if you have a loss of a 1 ct, I , Vs2, ACA, that is what it will replaced with. So I guess I don't understand the extra $5k in this case. I don't think there is a good reason for an inflation unless there is a bulit in anticipation of diamond prices rising.

 

[ChristineRose]

That's...iffy. It's pretty obvious how much it will cost to replace your stone, because you just bought it.

I wonder if they are doing this math--the stone is a superideal (is it?) and can only be replaced by a branded stone like Hearts on Fire. But HoF would charge $6,000 more at retail for your stone. They have an agreement with HoF to give them that stone at a big discount, so they get more insurance premium (based on retail price) but pay less once the discount is taken into account.

In which case your appraisal and policy should specify that it has to be replaced by a WhiteFlash, and in that case the price of a WhiteFlash is obvious.

 

[poshmommy]

No...no upside at all. Insure for what you paid only. May need to increase a few percentage points later as the market fluctuates. But paying over is just throwing your money away. You will not get a $5000 more expensive ring if you make a claim. It just doesn't work that way.

 

[yssie]

What percentage of your total cost is $5000?

I could easily see a $5k sway being reasonable on a $50k+ stone.

 

[cherij0411]

I work in insurance if purchased within a year they should go by value on bil of sale. You should get all jewelry reappraised every 5-7 years. Loss settlement depends on how you have it scheduled. If you do agreed amount the most you are going to get is what you have it scheduled for even if it’s now worth higher to replace. Otherwise If you insure at replacement cost basis they will replace with like kind and quality, if it was a H and A diamond you will get exactly that.

 

[motownmama]

I’ve got Chubb and I echo the comments that say what you paid is what you’d need to replace it today. They increase the amount every year and you can agree to that or pull it back. When I lost my diamond bracelet last year they called and said I’d have my check for the scheduled amount in 3 days, but if I couldn’t find a comparable replacement I could get 15% more