Insurance claims?

[Dazed and Confused]

Has anyone ever made an insurance claim on their e-ring (or any other jewelry)? Do you know anyone who has made a claim? I''m contemplating getting insurance for the 2.4+ ct. diamond I''m about to purchase, but was told by my jeweler insurance it sort of a waste of money because if you regularly have your diamond inspected, most people (99%) never have any trouble. Of those that have insurance and have had trouble, the insurance didn''t cover their claims (e.g. the replacements were of lesser value, low cash out values, etc.). The premiums are going to be $500-700/yr depending on the type of coverage I select. Is it worth it???

 

[Diachi]

Date: 6/21/2005 5:21:28 PM
Author:Dazed and Confused
Has anyone ever made an insurance claim on their e-ring (or any other jewelry)? Do you know anyone who has made a claim? I'm contemplating getting insurance for the 2.4+ ct. diamond I'm about to purchase, but was told by my jeweler insurance it sort of a waste of money because if you regularly have your diamond inspected, most people (99%) never have any trouble. Of those that have insurance and have had trouble, the insurance didn't cover their claims (e.g. the replacements were of lesser value, low cash out values, etc.). The premiums are going to be $500-700/yr depending on the type of coverage I select. Is it worth it???

There are great insurance options out there now that take appreciation and appraised value into consideration. Try searching insurance, there is a ton of info on there...FYI-I have my 1.3 ct. diamond ER insured and the premiums are less than $200 a year-mine also guarantees a cash settlement instead of replacement up to 150% of the value no matter what the reason (theft, loss, etc.) if I'd like that instead of a replacement, covers international travel, and there is no deductable.

I don't know why your jeweler wouldn't recommend it? Its worth the peace of mind to me since we couldn't necessarily afford to replace it right away...

Most people say the more information (FULL appraisal of the stone from an independent appraiser) is the best way to be sure you will get the true replacement value/claim from an insurance company.

 

[denverappraiser]

Insurance policies are not all the same although there is some logic to describing all insurance as a waste of money since you’re basically betting against yourself and giving the house a cut. People do it more for reasons of peace of mind than for financial efficiency. The specific policies will vary considerably depending on what company you choose, where you live, your claims history and similar variables. It’s a very competitive business.

Inspections: You should do this anyway. Actually, you should probably especially do it if you don’t decide to buy insurance since you are taking the risk yourself. I’ve never heard of a claim from a real insurance company being denied for lack of an inspection log but they do require periodic inspections at renewal time. This is the primary complaint about store warranties, which are fundamentally insurance, but I suspect that this is not what you mean.

Replacements of lesser value: Most replacement type insurance policies are agreeing to replace your lost item with another of ‘like kind and quality’. For the definition of ‘like kind and quality’, they use the appraisal that YOU submit. This is the reason that they ask you to get an appraisal instead of doing it themselves. If you give them a report that has an inadequate or incomplete description then you are defining what will be an acceptable replacement. The primary beneficiary of a competent appraisal is the consumer, not the insurance company. Good appraisals at the time you bind the policy will solve most of this issue.

Low cash out values: For clients that prefer a cash settlement, every company I know of offers this as a choice. They offer to pay the amount that it would cost them to replace with ‘like kind and quality’ as discussed in the above paragraph. Note that this is not the same as the value that may have been put on your appraisal. A ring that can be replaced for $1000 will produce a settlement for $1000, less any deductible that you have. Providing an appraisal that says it’s ‘worth’ $3,000 won’t change this. The bottom line number on the appraisal is there as the upper limit for the payout in the case of a loss and for purposes of setting the premium. It is not a promise to pay this amount in the case of a loss. This leads to tremendous misunderstandings on the part of consumers because they get unrealistic appraisals from the sellers and present them to the insurance company. They think it’s good news to have an appraisal for many times the purchase price and never think to question it. The insurance companies accept them because the big numbers at the bottom produce big premiums and the weak descriptions make the replacement easy. As with the above, properly done appraisals will solve most of this problem.

If your looking at spending $700/year on an insurance policy, I would think it to be worth your time and money to both get proper documentation and to talk to the companies about their claims procedures on their various products.

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

 

[dib]

I just had to put in a claim for a lost ring. I never thought i would lose my ring because i NEVER take it off, but of course the rare time that i did, i lost it. Anyway, thankfully i had insurance and although my insurance agent told me i had replacement value, the insurance company sent me a check for the full appraisal value.

 

[Dazed and Confused]

Diachi and bbb - could you please let me which insurance company you went with and how satisfied you are with the company?

Also - bbb, could you please tell me about your claims process? Did you find it to be easy? Did the claims processing go smoothly? When you say you had "replacement value" but were paid the "full appraisal value," do you mean that your diamond was insured for a lower value than the appraisal, but the insurance company paid you the value listed on the appraisal?

Thanks for all your imput! I''m still new at all this. I will likely get insurance on the diamond I''m about to purchase and need to decide company to go with (since both Chubb and JM have their supporters). Thanks again!

 

[dib]

dazed and confused - i just sent you a private message