Insurance question

[diamondseeker2006]

Okay, I am deciding whether to move my diamond ring and studs to a better policy. And I need help deciding how much to insure them for. Would you insure them for the purchase price or the insurance appraisal amounts which are about 1/3 more than the items cost? ($14,000 vs. 20,000 and $6000 vs. $9000) This would be a policy where they would write me a check in the event of loss.

 

[belle]

what is the difference in premiums? deductibles?

 

[aljdewey]

That really depends on what you value, I guess. You can insure them straight for the purchase price if you''re comfortable with the notion that replacing them in two years might cost you a bit more out of pocket due to increases in pricing.

If you would rather make sure you can replace with no out-of-pocket costs from you, then you could insure for the sum of 1) the price you paid PLUS 2) some percentage of increase to account for how much the prices could feasibly rise within a 3-year period.

How much that percentage is really depends on your comfort level. I''d probably factor in 10-15% over purchase price myself if my goal was to make sure I could replace with no out-of-pocket costs.

By way of example: my two .31, H, SI1 e-ring sidestones cost $450 each in 2004. Today, the same stones from the online vendor would cost $550 each....22% more than original cost.

If I insured for only the $900 I paid, I''d have to chip up another $200 out of pocket to replace them. If I don''t mind some small out of pocket expense, that''s fine. If I wanted total replacement with no out of pocket costs, I''d have wanted to insure them for more than purchase price.

 

[diamondseeker2006]

You bring up a point that I hadn''t thought of. Do you think they''d let me choose an amount lower than the appraisals?

 

[diamondseeker2006]

Date: 2/1/2007 9:59:20 AM
Author: belle
what is the difference in premiums? deductibles?

I think it is pretty much so much per dollar amount, so it would cost about a third more to insure them for the inflated amount, which adds up over time. I think 0 deductible on a Chubb policy.

 

[denverappraiser]

Talk to your insurance agent. You are asking for a defined value type policy, which is where you and the company agree to what the insured property is, what will constitute a covered loss, what will be paid in the case of a loss and what premiums you will need to pay to get this coverage. None of this has much to do with the appraisal and the companies that offer this type of policy don’t generally require much beyond evidence that the piece actually exists, that you actually have it, etc.

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

 

[diamondseeker2006]

Thanks, Neil, alj, and belle. I''ll call and ask about insuring for an agreed amount between the purchase price and the appraised value.

 

[aljdewey]

Date: 2/1/2007 10:05:52 AM
Author: diamondseeker2006

Do you think they''d let me choose an amount lower than the appraisals?

Yes......they should have no problem.

Example: using arbitrary numbers..... if you paid $6000 and your appraisal is for $12K, let''s say........you might decide to insure for $8500. If the insurance carrier questions the amount, you can tell them you don''t want to overinsure and are comfortable bearing a bit of the risk of replacement yourself.

 

[Fly Girl]

I recently filed a claim for a lost diamond ring with SF. I bought the policy about six years ago and it had automatic inflation coverage. However, with the recent jump in platinum prices, I was somewhat underinsured.

Now, what is interesting is the way the claims process works. SF has authorized jewelers and you pick a local SF authorized jeweler to estimate the replacement cost of your lost article. If the cost is below your insured cost SF insists that the article be remade by their jeweler. If the cost is higher than your insured cost, you get a check for the insured amount and can pick who you want to remake the piece.

In my case, my ring was insured for about $18K with SF. I asked a couple of jewelers for appraisals before selecting one to remake the ring. One jeweler came in at $13 K. The other came in at $20 K! I selected the $20 K guy and got the check from SF for $18 K. Then I found the ring

and returned the check to SF. But, I wonder about the quality of the diamond and ring I would have gotten for $13 K.

Just more food for thought when it comes to selecting an insured amount. The insured amount is critical when it comes to how much control you will have as to who replaces your jewelry.

Policies will vary. Best advice is to discuss this with your insurance agent.

 

[diamondseeker2006]

Fly Girl, this is why I am changing from a homeowner rider to Chubb. I want an insured amount, and if there is a loss, they simply write the check for the insured amount. I don''t like the hassle of dealing with an insurance company''s jewelers, etc.

 

[Ellen]

Date: 2/1/2007 12:43:52 PM
Author: Fly Girl
I recently filed a claim for a lost diamond ring with SF. I bought the policy about six years ago and it had automatic inflation coverage. However, with the recent jump in platinum prices, I was somewhat underinsured.

Now, what is interesting is the way the claims process works. SF has authorized jewelers and you pick a local SF authorized jeweler to estimate the replacement cost of your lost article. If the cost is below your insured cost SF insists that the article be remade by their jeweler. If the cost is higher than your insured cost, you get a check for the insured amount and can pick who you want to remake the piece.

In my case, my ring was insured for about $18K with SF. I asked a couple of jewelers for appraisals before selecting one to remake the ring. One jeweler came in at $13 K. The other came in at $20 K! I selected the $20 K guy and got the check from SF for $18 K. Then I found the ring

and returned the check to SF. But, I wonder about the quality of the diamond and ring I would have gotten for $13 K.

Just more food for thought when it comes to selecting an insured amount. The insured amount is critical when it comes to how much control you will have as to who replaces your jewelry.

Policies will vary. Best advice is to discuss this with your insurance agent.

Evidently, from your post, AGENTS vary. I have SF also, and specifically asked my agent, in the event I lost my ring, what would happen. He said SF would try and get me a relacement with one of their jewelers, but if they couldn''t get the same quality, they''d cut me a check. I told him I seriously doubted they could find one (I have an EXTREMELY detailed appraisal), and that besides, I''d want my vendor to replace it, to which he replied, that''s the way most people are. And there was no mention of price, one way or the other. And no mention of remaking either...

 

[diamondseeker2006]

Ellen, what I have come to believe is that the sales people taking the orders really have very little knowledge of how claims work. I even called the Chubb agent in Nov. and they had NEVER even written a stand-alone jewelry policy before and had to call Chubb to see about it! Today I called and had to speak to a different person, and she had no idea at all about whether I could insure items for less than the appraisals. So people should beware of what they are told by an agent on the phone, because they may or may not know what they are talking about!!! (I never did get a clear answer from my current ins. as to exactly what would happen if I lost an item on my rider, which is why I am moving my best items over to Chubb...if we can get that figured out!!!)

 

[denverappraiser]

State Farm, and most other major insurers, have more than one policy offering available and the details of each will vary from state to state so it really is important to pay attention to what you are buying and how the coverage works on your particular policy.

In general, a homeowners policy will obligate the company to replace with like kind and quality in the case of a loss. The appraisal that you submit at the time the policy is bound will be used as the definition of what constitutes ‘like kind’. If there is an attribute that’s important to you, it should be included in the appraisal. The company then must replace with a comparable item, convince you to accept something different or pay the face value of the policy. They are usually happy to allow you to shop wherever you wish but if they can reasonably demonstrate that your chosen supplier is charging for something other than what is agreed to in the policy, they will only want to pay what it would cost them at a more sensible source. The details of this are part of your individual policy and, to an extent, regulated by your own state. That's why I always say to ask your agent or another company representative about how a particular policy will be handled. If the agent is insufficient, call the company's 800 number and talk to a manager there. They are not only fairly likely to know the answers, they are the bottom line for who is responsible for training those agents as well.

By all means, if the company and their representatives aren't able to explain their offerings to your satisfaction, ditch them for their competitors.

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