Insurance Question - before repair or after or....

[Daisyheart]

Hello everyone, I''m getting ready to send my heart diamond ring this week to GOG for repolishing. First I want to get it insured this time...

Now, how much should I insure it for????

1. First appraisal is from GOG which I guess is retail

2. Second appraisal is from the loser jewlery store who appraised it at retail for $40,000 more than I paid

3. Third appraisal is from the independant appraiser that saw the ring last week, and if I go with this appraisal, she broke it down in several ways...

a. The price of the diamond wholesale before it was chipped
1. the price of the diamond retail before it was chipped

b. The price of the diamond wholesale AFTER it was chipped
2. the price of the diamond retail AFTER it was chipped

4. OR....just the amount I paid for the stone (which since I got such a good deal this amount is less than the wholesale amount)...

5. ..... or something that is inbetween what I paid for the diamond, and what retail would be?



Also, I shouldn''t tell my insurance company about the chip and the whole process about it being shipped somewhere and the recutting process, should I?

Thanks so much
trishy

 

[denverappraiser]

What it is at the moment the policy starts is usually the important issue for insurance purposes, not what it used to be or even what it might become. The GIA lab report, the initial paperwork from GoG and the report from the jeweler who failed to notice the damage are not applicable at this point.

For most policies, the value declared should be at appropriate funding for the insurance company to provide replacement with an alternative diamond of like kind and quality in the case of a loss in the most appropriate marketplace and given a reasonable amount of time. Your appraiser should be able to assist you in choosing the most appropriate marketplace for replacement and in assigning a value for you to be properly insured. Perhaps this is what they have already done but you might want to call them up and ask what they mean by the values they''ve provided.

Many insurance policies do not cover a ''loss'' from unexpected results during recutting. Ask your agent if what you are planning would be a covered activity under the policy you are considering.

It’s worth pointing out that withholding of critical information from the company at the time the policy is written is a contractual violation with ALL of the companies and would be grounds for a claim denial.

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

 

[diamondseeker2006]

I wouldn''t overinsure it by a large amount. I''d insure it for a value that was closest to what you paid, but not less than what you paid. I''d probably get a policy like Chubb and explain that the value may change after you have it polished and see if you''d need to change the amount.

 

[Daisyheart]

Gosh, I just wanted to clarify I didn''t want to sound decitful in my post. If something happened to my stone in the cutting process or anything like that I would DEFINATLEY disclose what happened (you know from my prior posts I''m big on disclosure

), I never intended to be dishonest. BUT, I do want to insure it before I send it, lets say it gets stolen or something while this is all happening and it falls under what the policy covers, I want to be covered this time....

Again, do I have to tell them that I''m sending it somewhere to get recut because of the chip, etc. etc. etc.... What does that matter? I''m not withholding anything critical really because they are going to cover what they are going to cover.????? Am I missing something?

Neil you said...."For most policies, the value declared should be at appropriate funding for the insurance company to provide replacement with an alternative diamond of like kind and quality in the case of a loss in the most appropriate marketplace and given a reasonable amount of time"

Is what my appraiser chooses for the "most appropriate marketplace for replacement" what they are going to use (she searched the internet for comparible stones) or are they going to search for themselves? (sorry I know nothing about this stuff) I got a very fair price when I purchased the stone and I probably couldn''t get the stone for the same price I paid for it, therefore, to insure it for what I paid for it really wouldn''t be enough to get the same quality stone, and to insure it for what the retail appraisals say is so excessive. Do I have to have an appraisal to match the amount I want to insure it at because mine is a mix of reports?

Also, to throw another loop in it all, my appraiser downgraded the stone to an SI2. I talked with the GIA today and they told me that the small chip I described, where I described it (they pulled up the reports on their computer) would probably NOT be and SI2. My appraiser was very thorough and gave me values of the stone before chip and after chip, but she downgraded it to an SI2 and that may be a little harsh, so the "as for the moment" price of my diamond is rather unknown.

So all these factors make it confusing for me to come up with a number to appraise it for...

My current policy for all the rest of my jewlery is with Chubb so I''ll be talking with them tomorrow when I add this, I just thought I''d ask the question first before I talked with them...

Thanks for the comments....

 

[RockDoc]

Trishy - READ BELOW AS THINGS MAYBE HAVE CHANGED!!!!!

You mentioned something VERY IMPORTANT here that potentially MAY change things drastically. You mentioned that the rest of your jewelry is already covered with Chubb.


Part of Chubb''s policy is that you are covered for 30 days on any new purchases "automatically". If you purchased the stone and the chip occured less than 30 days after ( you have to establish a definitive time frame ) then possilby you have a valid claim with Chubb.

The new purchases benefit is pretty much standard with Chubb policies, but you need to check yours.


I''d hold up shipping it til you get things arranged with Chubb. If the damage occured before 30 days, after your purchase, then things could be totally different. The option to get it repaired or replaced is now on the table, and the option with Chubb is that it IS your choice. ( if you chose to get a new stone, then they get the old one).

As for disclosure of the chip, you should discuss any subsequent claim, with the Chubb agent or with Chubb Co, itself. I am not sure if there would be coverage for any happening related to the chip, if the damage happened after the 30days after you purchased the item. Note : I am thinking the purchase was made for the stone first and the ring later. But I''d still advise talking to CHUBB and sorting out the above first.

Hope this is good news.

Rockdoc

 

[denverappraiser]

That''s a great point Doc! It hadn''t occured to me that this was so soon after the original purchase. Many credit cards also offer a certain amount of coverage on new items purchased using their card and this situation may apply.

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

 

[denverappraiser]

Trishy,

The risk I was referring to in the last post is the risk of damage by the cutter on the wheel. You have been told to expect minimal weight loss during the repair process and I think this is a reasonable expectation but it is not guaranteed. Loss, theft and similar issues are covered under most standard policies but these are also covered under most jewelers policies. If GoG is brokering the recut, they almost certainly have a policy in place that covers these perils.

I can’t speak for your appraiser but it should say in her report what they she is using as a definition of value and what marketplace she is describing. The most appropriate marketplace will depend on the item being discussed, the policies of the insurance company involved and even the temperament of the client. 4 carat heart shapes are not the easiest thing in the world to find as you well know, and the appropriate marketplace is likely to be different than it would be for, say, for a half carat round. Chubb is not a replacement policy but it’s still necessary to define value and the marketplace that it relates to for the value conclusion in the appraisal to have any real meaning so really the issue is the same. An item is not worth $xxx just because some appraiser says so, it must relate to some market reality somewhere. If it turns out you are covered under your existing policy, the value definition used is likely to be the transaction cost in the marketplace and on the date where you bought it. This would be a fine turn of events.

Jewelers, clients and even appraisers tend throw around terms like ‘retail value’, ‘appraised value’, ‘replacement value’, ‘market value’ and the like without putting them into any meaningful context and the results can be extremely confusing. Value is not a concept that can stand on it’s own and that applies to all situations. It sounds to me like you’ve got a capable appraiser and it’s just a matter of making sure that she understands what questions you are asking of her and that you understand her answers. Sometimes this is easy and sometimes it’s difficult but the first step is to ring her up and discuss it.

The questions of whether or not it’s damaged, when the damage occurred and whether it is now a different clarity grade are likely to be critical to any insurance claim but the minutia of this would be up to your insuror. If you have a claim, use your appraisers report as evidence of the damage and if they want further inspection by another expert or by GIA, they will pay for it. If you are starting a new policy, call it an SI2, which is the grade provided by the ONLY expert who has seen it in it’s present condition. The person on the phone at GIA should have known better than to speculate on the post-damage clarity of a stone over the phone. If you want GIA’s opinion, send it to GIA.

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