Insurance Value - Go low or go high?

[CharmyPoo]

We had our diamond appraised by David Wolf who was very fast and responsive. David told us that the stone is very rare and would be extremely difficult to replace. He could easily value it at $1500 to $2000 over what my darling BF paid and it would be upwards of $5000 if purchased from a retailer. We are not sure what value to use in our report for insurance and potential replacement purposes.

My boyfriend is thinking of going as low as possible so we don''t have to carry the insurance premium. However, I am thinking why wouldn''t we put it at the high end to make sure we can replace it if something happens for whatever reason.

Any thoughts would be appreciated.

 

[strmrdr]

My rule of thumb cost + 30% and review every year and reappraise every 3 years or as needed based on the review.

 

[neatfreak]

Don''t go lower than it''s worth, but also don''t go crazy high or else you are paying for something you will never be able to collect on without a cashout policy...

And I second Storm''s advice of getting it reappraised regularly.

 

[elle_chris]

Date: 9/11/2008 12:40:01 PM
Author:CharmyPoo

We had our diamond appraised by David Wolf who was very fast and responsive. David told us that the stone is very rare and would be extremely difficult to replace. He could easily value it at $1500 to $2000 over what my darling BF paid and it would be upwards of $5000 if purchased from a retailer. We are not sure what value to use in our report for insurance and potential replacement purposes.

My boyfriend is thinking of going as low as possible so we don''t have to carry the insurance premium. However, I am thinking why wouldn''t we put it at the high end to make sure we can replace it if something happens for whatever reason.

Any thoughts would be appreciated.

CharmyPoo- With all due respect to David (and I''ve used him twice before), you got a cushion if I''m not mistaken. While it "may" take a while to replace since you probably want a particular cut and cushions have so many looks, it''s not impossible or even close to impossible
Also, getting the higher appraisal doesn''t mean that in case of loss, the insurance company will replace it for what it''s insured for. They''ll still only replace it with what it''s worth. When David did my last stone, I asked for the middle mark. Not the lowest or the highest.

 

[CharmyPoo]

Thank you for everyone''s advice. I will see if my boyfriend can get him to put a price in between high and low on the report. I hope he doesn''t mind the change. We still have to get an appraisal after it is set so I am not sure when this original report will be used.

 

[CharmyPoo]

I was going through the archives and came across a post that got me thinking. Since we are Canadians and the e-ring will be insured by a Canadian insurance company, do I need the appraisal to be completed in Canada with a Canadian market value? It feels like we just spent money on an appraisal that we might not be able to use other than for our own information and satisfaction.

Anyways ... I guess we just need to call the insurance company and find out.

 

[corgan]

Being a Canadian myself I honestly would get it appraised here. Are you getting a seperate insurance policy or are you adding it to your home insurance?

 

[MAFreeze]

I''m sort of in the same spot as Charm--and I don''t want to hijack the thread--but can I ask what the differences are between insuring the diamond as a separate policy as opposed to attaching it to homeowner''s or renter''s insurance? Does is matter?

 

[CharmyPoo]

I don''t have any answers but hopefully one of the experts will chime in.

For us, we already had it appraised in NYC. I was thinking it would be easier for the vendor to coordinate and get the diamond to the setter afterwards. Plus, there are few recommendations for Canadian appraisers. It just doned on me that we probably need a Canadian appraised value. Hopefully, it wouldn''t be as costly.

 

[denverappraiser]

Value it at what your reasonably can expect to replace it for, erring on the too expensive. Bear in mind that the process for replacement is to go into the marketplace with a rather specific list of specs and find whatever the least expensive item is that can meet these specs. This is not the usual way people shop, especially when it’s unusual sorts of things. They go into the marketplace with a vague idea of what they want and then adjust their requirements based on what the merchants actually have, what’s on sale today, etc. The more exotic the item is, the more likely it is that this is going to be the case and the more difficult (read expensive) it’s going to be for your insurer to replace it. This tends to drive up the ‘replacement’ cost when compared to the transaction price. How much different these are will depend on what you have and it’s a question to ask Mr. Wolf.

The usual reason people choose to insure with their homeowners companies is because it’s easier. They have a pre-existing relationship with the company and the agent, they only get one bill instead of 2 and often the bill is hidden in their mortgage payment so there’s not a lot of thought that goes into it. Most are pretty good companies.

The usual reason to avoid your homeowners company is because a claim becomes a claim against your homeowners policy and can have repercussions that go beyond jewelry. With a standalone jewelry policy, the worst they can do is cancel your policy where with a homeowners company, they are canceling the policy on your home as well. In some cases, people also choose standalone policies because the settlement procedures and rates are different for different companies and different policies and they may want one approach for their home and contents and a different approach for their jewelry.

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

 

[dbsdiamonds]

Some homeowner policies offer up to a certain amount of insurance on personal goods, right? I don''t think $4k to $5k is going to hurt that ceiling, I''d do it there. And i concur on the 30% over with evaluations every couple of years.

it doesn''t matter how much higher you insure it, it''s not like any insurance company would hand over more than what it would cost them to replace...

Marty
CEO/Pres
Diamond Brokerage Service, Inc
www.dbsdiamonds.com

 

[denverappraiser]

Date: 9/11/2008 4:08:11 PM
Author: dbsdiamonds
Some homeowner policies offer up to a certain amount of insurance on personal goods, right? I don''t think $4k to $5k is going to hurt that ceiling, I''d do it there. And i concur on the 30% over with evaluations every couple of years.

it doesn''t matter how much higher you insure it, it''s not like any insurance company would hand over more than what it would cost them to replace...

Marty

CEO/Pres

Diamond Brokerage Service, Inc

www.dbsdiamonds.com

Homeowners policies have a component to cover personal property or household contents, including jewelry, and there is a limit on the amount for specific categories. Jewelry is usually about $2500 for the total value of all included jewelry but some are as low as $1000. Amounts above this are uninsured regardless of the total limits on the policy.

The policyholder, at the time of application can either pay extra to raise this limit for jewelry, fine art or whatever category they have that’s of interest to them or they can add a special policy for certain items. The later is the usual case for jewelry where they use the $2500 aggregate to cover small and incidental pieces and the pieces of substantial value they will appraise and buy a special endorsement to the policy that covers these up to whatever limit is appropriate. This is the coverage I’m discussing. As far as I know, all of the homeowners companies will offer this as a choice. Part of the job of the agent is to explain the options and help the policyholders choose the insurance products that are right for them and their situation although some agents are definitely better than others at this.

30% over what? Cost? That depends on what was paid, doesn''t it?

Talk to your appraiser and follow his/her advice. Expertise at this sort of thing is part of what you''re paying them for.

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

 

[CharmyPoo]

Thanks for everyone''s help.

I have another question - what is typically included in the report? Is it normal to just have one diagram with measurements, one with inclusions, couple paragraphs of text, replacement value and then a lot of standard text?

I don''t know what I was expecting but I was thinking more along the lines of what GoG provides for free on their website.

 

[arjunajane]

hey Charmypoo,
I recently faced the same issues as yourself, and although I''m in Australia I think our situations are similiar. here is my thread, there may be some info that helps your decision https://www.pricescope.com/community/threads/insurance-confusion-please-advise.90204/
As far as the appraisal, even though I had two included from WF and GOG, my Ins Co wanted to take the appraisal value done locally (in Australian $) as the sum insured for my ring. As far as I''m aware, they will not accept and International one for claims - you may want to clarify this with your Co.

As to your description above, this sounds pretty much like what I have - a photo of the ring taken by the appraiser, with a couple of lines of description and the appraisal value. If I ever need to claim, this is all my Ins Co wants, but I will probably insist on giving them my AGS cert etc.
Of course, I have all the reports and images from GOG, but from my understanding that is not the usual to expect from an appraiser, and its not required for insurances purposes (although they are fun to have, lol).

HTH,

 

[LostSapphire]

Date: 9/11/2008 1:55:12 PM
Author: CharmyPoo
I was going through the archives and came across a post that got me thinking. Since we are Canadians and the e-ring will be insured by a Canadian insurance company, do I need the appraisal to be completed in Canada with a Canadian market value? It feels like we just spent money on an appraisal that we might not be able to use other than for our own information and satisfaction.

Anyways ... I guess we just need to call the insurance company and find out.

Hello CharmyPoo

I am in this exact situation: my custom ring arrived from WF 2 weeks ago. Complete with appraisal.

I have to get a CDN appraisal for my insurer. So that''s what I''m doing this afternoon.....

LS

 

[CharmyPoo]

Thank you for your input. I called a couple companies and it sounds like I will have to get it appraised in Canada. I looked through the archives and really only saw one appraiser recommended.

 

[LostSapphire]

Date: 9/13/2008 1:18:02 PM
Author: CharmyPoo
Thank you for your input. I called a couple companies and it sounds like I will have to get it appraised in Canada. I looked through the archives and really only saw one appraiser recommended.

Not a lot on this forum for CDN appraisers. You have to go the old fashioned route: yellow pages. But they are out there!

LS

 

[Richard Sherwood]

Whenever I have an international client, I appraise it in their currency under the heading "Sarasota Gem Lab International".

All my clients have told me their companies have accepted this.

Perhaps you can get your appraiser to do something similar.