Insurance, revisited, Again!!!!

[baltneu]

I am sorry in advance for so many Insurance threads but after reading and posting I am still not convinced that the "cash" policy in case of loss is better than "equal replacement", in other words a State Farm (SF) policy vs. Chubb.

Scenario (Which I believe is real and current):

We all know that wholesale prices have increased lately, infact for the 2nd time in just a few months, so therefore, if I own a 1.0 carat ring that is appraised at $7,000 today, which I bought 6 months ago, I know that with current pricing, it is going to cost a lot more money than $7,000 to replace the ring. Turn the clock ahead 5 years, and assume a loss in 5 years, the stone will cost alot more, again. (Assuming price increases, which will probably happen.) I guess I can get a ring reappraised each year but that cost money, and generally we might forget to do it.

So, if I own a SF policy, and in the declaration page which is the description of the ring, and it is detailed down to the "gnats eyelash", I think I am better off with this policy than Chubb. Chubb will give me $7,000 and walk away, but that will not buy the ring that was lost or stolen. SF will have to cough up more money and replace of equal value.

Any thoughts?

 

[abbeyld]

My two cents...for what it's worth....

A replacement policy is always better than a policy that reimburses what was paid. But it nearly always comes at a cost. If the 2 policies were to cost the same, go with State Farm. If State Farm was more expensive, then you have to weigh that cost into deciding if it's worth paying the extra money for something that, chances are, you won't need.

What's the cost difference?

 

[PreCiouSJeWeL920]

I do have a chubb policy on my ring. In case that you ever have a loss and you decide to replace it they will pay it up to 150% of insured value if the current market higher than it was before. But for SF, even if they have replacement policy they will not pay a penny more than what your insured value. I guess then you will get your money back. Hope this helps.

 

[wallace]

Hey - Abbeyld commented well. You have to keep up with your appraisals annually to get the current market value of your ring continually insured at the appropriate value.

Edited to clarify comment pertains to the earlier mentioned non-chubb policy. Of course, this point is moot with a chubb policy.

 

[eyesoftexas]

Chubb is awesome to work with. You do not have to get your ring re-appraised every year. That is why the have the 150% replacement built in. As long as you are being reasonable they will accept the value. How do you determine reasonable - go to your original apprasier and ask them what it is worth now. Chubb is the Rolls-Royce of insurance and customer service is what they are about. Do remember that the bulk of their Jewlery business is in insuring millions of dollars in jewels/artwork from individuals. So at least in my case it is only a drop in the bucket to Chubb.

 

[chowchow99]

Baltneu..Unless you are insuring a ring worth $30k or more I don't think
there will be much of a difference in the premium between SF and Chubb.
So every 4 or 5 years you get the ring appraised and insure it for the value of the appraisal. Just make sure you get a realistic appraisal. Go with Chubb and it's done and over with. No more hassles or worries. I don't understand the delay you have and why you keep questioning the PS board? Do you want to nickel and dime this to death or do you want to sleep worry free at night?
It's up to you!
BTW..Does SF give you worldwide coverage with zero deductable, because Chubb does?
Now go out and get Chubb Ins. and put it to sleep.

 

[dimonbob]

Baltneu,
Lets say you purchase a 1ct ideal cut round from an on-line vendor for $7000. You take it to an appraiser and it is appraised for $10,500. You give SF the appraisal and insure it for $10,500. For several years you pay the premium on your $10,500 diamond. One unlucky day the ring goes missing and is lost or stolen and you file a claim. SF will find you a replacement. Will the diamond be the same size, color and clarity? Probably. Will it have the same certificate (GIA or AGS) and be ideal? Maybe not. Will they pay $10,500 for your replacement diamond? Not even close! They send out a request to jewelers they deal with in your area and will replace your ring with mininum they they can get by with.

Let us now consider what happens when you insure with a cash replacement policy. You paid $7000 for the diamond but the appraisal says it is worth $10,500. It would not be wise to insure it for either of those numbers but for about $8500. You have to renew the policy every year so all you have to do is check pricescope every year to find out what it is selling for. If you have to you can up the insured value which will also increase your premiums. Several years later the rings goes missing and you file a claim. You get the amount you have it insured for. Now you can go out and replace it with whatever you want, bigger, better, D color...whatever. You can even buy a car! With SF you get what SF considers a replacement. Nothing more, nothing less.
Your choice!

You can insure it for

 

[verticalhorizon]

So you can insure it for less that what it says on the appraisal report that you submit to the insurance company?

 

[fire&ice]

I have to chime in here. It seems that all too many times people bow to Chubb as being the end all be all of insurers. Over many years, I had dealt with a variety of different claims. Including a theft case & damage to my elderly parents house. Chubbs was the insurer on both of these cases. They were the insurer from h*ll.

That said, I keep saying an insurer is only as good as the agent & your relationship w/ the agent. Mine made it clear that I could choose my own stone w/ the cash. He laughed that it would save quite a bit of time & expense on their part as he knows how picky I am.

Granted, a cash out no questions asked settlement gives one flexibility. One can choose to not replace the diamond at all. One can choose a D stone. But, ask yourself, is this why I have the insurance policy? No, I have the policy to be able to afford to replace my engagement ring.


All that said, if I recall correctly, Robin & Todd (niceice) works with an insurer to replace lost stones. I'd put my trust in them to find me a similar if not better stone.

 

[hoorray]

Baltneau,

Check specifically with your SF agent if "replacement" includes replacing it at a higher cost. Mine is insured with USAA (typically a very good insurance company), and they told me that "they would try to replace it with a similar diamond for the $$ amount it was insured for. If they cannot, they will give me the cash". They recommend that I reappraise and change my policy value periodically if I think the value has change substantially. They let me pick the amount I insured it for, with supporting docs. I insured it for slightly more than I paid online.

I don't know if this is the best way to go, but it seems rational. I'm not trying to get something for nothing with my insurance -- I'm simply trying to have peace of mind tht I can replace my ring if it is lost or stolen.

 

[fire&ice]

----------------
On 4/8/2004 10:51:33 AM lop wrote:

Baltneau,

I don't know if this is the best way to go, but it seems rational. I'm not trying to get something for nothing with my insurance -- I'm simply trying to have peace of mind tht I can replace my ring if it is lost or stolen. ----------------

Yes, this is rational. Geez, isn't that what insurance is all about.

I had a conversation w/ my insurer a few days ago regarding my re-fi. The conversation turned to talk about deductible as the rates have skyrocketed. He said that you & I pay for insurance wishful thinking. A small fire in a kitchen & the insured wants a whole kitchen remodel paid for. Most of the time it's not worth arguing. Just makes everyone else's rates go up.

 

[baltneu]

Responses to my original thread:

abbeyid- SF premium is much less than Chubb. In my case (NJ) the SF premium for our $8,000 appraised value ring is $86 vs. $142 for Chubb.

PreCiouSJeWeL920- That is good info about Chubb paying up to 150% of the insured value (I assume that is appraised value), but what if replacement cost at time of loss/theft is 200%? I guess you have to keep getting it reappraised so you don't take a hit. But most people do not reappraise on a regular basis, it cost money for this service.

Wallace- is it OK to keep paying appraisers to update your policy, you are already paying a "premium" for Chubb, and now on top of that you are going to pay for appraisers. To each his own!

Chowchow99- there is a big difference in the premiums between SF and Chubb, see above. SF gives worldwide coverage, and they do offer a $0 deductible. I also think it is not often done to reappaise every 4/5 yrs. given time and cost.

Dimonbob-If you saw my original note, the declaration page should be very detailed on the description so they cannot slip you a piece of coal.

Anyway, enough on this one, best to all.

 

[wallace]

Sorry - Baltneu - I did not make myself clear - with the stated SF policy you can get re-appraisals to insure current market value over the years. With Chubb, you would not need to do this becuase it is included in the policy. I am not trying to persuade anyone to Chubb - espceially becuase the NY rates are so much higher than everywhere else - I was merely responding to the question of how to, with non-chubb policy, make sure that the increased market value of the stone over time could be protected in a policy that soes not specifically state it automatically covers that value increase.

Between the price of less-expensive insurance but renewed appraisals and more expensive insurance without appraisals - I'd say it's a matter of taste. One thing to keep in mind- unless the stone is unworn ans kept in a safe, the value of the stone might change over time but the condition of the stone will, too. Subsequent re-appraisals may result in a lower value because of chipping, scratching, etc.

I just wanted to clear that up - and I'm done with insurance. My FI being in the industry does not make me an expert...

 

[baltneu]

Thanks Julia!!!!

 

[chowchow99]

Baltneu...
You say there's a big difference in the price of a policy to insure YOUR stone. $142 VS. $86....That's a BIG difference? It amounts to less than $5 a month. Don't you think that a puny $5 a month is worth the pieceof mind going with Chubb?
Do you work for SF or something? Maybe you own stock in the company
because you DO NOT see the rational behind it all. Your stone is probably
not going to increase in value 200% in 5 years so I don't get what your talking about there.
Like someone else said insure it for slightly more than you paid for it and check every year with Pricescope on comps and if you have to increase the policy accordingly then do so. But go with Chubb.
I have my homeowner's policy with Chubb and had some water damage in my family room. I had a check in less than 10 days to cmpletely cover the damage. No problems whatsoever. Absolutely, positively most enjoyable experience working with Chubb.

 

[baltneu]

I was hoping to end the conversation but some people think they know it all. I always thought this forum was a place to share ideas, and not tell people what to do. Some people do not understand that. If you look at the responses of people on this and other insurance threads, some people want a replacement policy others want the cash. They are free to do what they want. Some of us may not be as affluent as others in weighing premium differences.

 

[fire&ice]

----------------
ize="1" width="100%">
Baltneu...
You say there's a big difference in the price of a policy to insure YOUR stone. $142 VS. $86....That's a BIG difference? It amounts to less than $5 a month. Don't you think that a puny $5 a month is worth the pieceof mind going with Chubb?
Do you work for SF or something? Maybe you own stock in the company
because you DO NOT see the rational behind it all. Your stone is probably
not going to increase in value 200% in 5 years so I don't get what your talking about there.
Like someone else said insure it for slightly more than you paid for it and check every year with Pricescope on comps and if you have to increase the policy accordingly then do so. But go with Chubb.
I have my homeowner's policy with Chubb and had some water damage in my family room. I had a check in less than 10 days to cmpletely cover the damage. No problems whatsoever. Absolutely, positively most enjoyable experience working with Chubb. ----------------

Oh yeah, how much experience have you had w/ claims with Chubbs.. Do you work for them?

20 + years of experience. None in the insurance industry. Not good ex w/ chubbs.

 

[Nicrez]

----------------
On 4/8/2004 7:40:51 PM baltneu wrote:

I was hoping to end the conversation but some people think they know it all. I always thought this forum was a place to share ideas, and not tell people what to do. Some people do not understand that. If you look at the responses of people on this and other insurance threads, some people want a replacement policy others want the cash. They are free to do what they want. Some of us may not be as affluent as others in weighing premium differences. ----------------

Hee hee, there is contention in size, in quality, in name brads, and now insurance! Wonders never cease! We currently have Jeweler's Mutual. We insured it for About $2,000 more than we paid, as we were told that this stone was hard to find as it is, and it's a branded shaped stone, so the extra amount we insured it for under the appraisal gave us more leeway for a better replacement than mall store spit. We pay $255 for $15K on the stone in NJ (Hudson County), at a rate of $1.70 per. Sadly, they will replace the item to the best of their skill with the SAME retailer we bought from, or another authorized jeweler, subject to their approval. That's OK with us, as our jeweler is one of the three NYC jewelers who carries our branded stone, and he's been around for 20 years+.

As ChowChow explains, what's $5 a month? Depending on the person and the rate of their valuable, that could be a lot! Not in itself, but in aggregate. If that difference were the same for someone with a $25,000 ring, that $5 a month could be more like $15-20/month difference, and money adds up. Who can determine what's too much or negligible for another?

My fiance and I did the calculations and we will not retain this insurance on my ring for longer than 15 years. By that time we will have approximately paid $4K to insurance (if we have not LOST it), and maybe slightly more if we then have to update the value (for my new e-ring setting and wedding ring to come), so roughly $5K at least.

After 15 years, paying almost 1/3 the price of the value is more than enough, and we will continue to put that same $255 (or more) away into savings, so should we ever lose it, we are paying ourselves for the replacement, and not an insurance company reaping the rewards if we DON'T lose it. In that case, it just all goes towards the upgrade!

 

[closingthedeal]

To Fire&Ice. As I stated just previous to your response, I had a claim just a few weeks ago and got top service from Chubb. So that puts an end to your dispute over Chubb. I prefer to have my choice of a cash payout or a total replacement of the exact same stone. I don't like insurance companies telling me what I can and can't do when I'm the one shelling out the money for the premium. Then they tell you where you have to get the stone and what you can replace it with. I don't want to be told what to do by any insurance company.
Remember you get what you pay for!