Insurance

[ThompsonTOT]

Hello everyone,

I am close to buying an expensive diamond, and I have a few questions about insurance:

1. Is it worth it? (the stone is 3.11 carats)
2. Who do you recommend?
3. What is typical cost?
4. What type of appraisal do I need?
5. Can an insurance appraisal be done after the diamond is set?

Thanks to everyone for replying,
Tony

 

[hoorray]

Only you can decide if insurance is worth it. For a stone that size, if it is stolen or lost, that is a big loss. Depending on the insured value you will probably pay several hundred $$/year to cover it. If you have homeowner's insurance, I'd start with them. If not, try Chubb.

Stones can be appraised after they are set, but if you are looking for a full, detailed analysis of the stone, it is better to do when loose. If you are looking for an insurance appraisal, I think it has to be set in most cases, and you insure the whole piece.

There is a good list of appraisers here on the Pricescope menu above. Rockdoc, Rich Sherwood, and Dave Atlas all participate here and are quite well respected.

 

[pqcollectibles]

Ditto's to Lop's comment. That would be a chunk of change down the drain if it got lost or stolen.

You can check your Homeowner's or Renter's insurance.

Chubb, as Lop mentioned, or Jeweler's Mutual come to mind. You can search past threads for more info. Insurance has been a heavily discussed topic on the Forum.

You might also consider chip and damage coverage as well.

Just curious,.... But how did you get from wanting help via email to deciding on the diamond so quickly??

 

[oldminer]

Jewelry insurance makes money for insurance companies. So, if you take reasonable measures to safeguard the jewelry such as a home alarm system, a floor or wall safe, a good neighborhood, and thinking before you travel with lots of jewelry exposed to be snatched, then you can beat the odds and save money on insurance by taking the reduced risk on yourself. This won't work for a lot of people. I have seen many very careless folks when it comes to safety and security of their jewelry. These people need insurance. The careful ones can make a decision that they need it or that they can accept the risk.

I have also seen people buy insurance on jewelry that have little or no medical coverage. Where are their priorities?
You can obtain income disability protection coverage, nursing home coverage and other essential insurance when you are young with VERY low rates that will remain nearly the same for life. Once you really get into the age where you might need the coverage, the rates are truly unaffordable.

If you follow my advice make sure you have the very best medical, disability, life and nursing home insurance in place BEFORE you decide about jewelry coverage. Get a floor vault or a wall safe. Buy it from a source who does not get your address. Pay cash!. Install it yourself or hire a very honest and reputable person to install it privately. Do not hire your alarm company to wire it because their installers are notorious. Simply be sure the room or area it is hidden in is well covered. You do NOT want the alarm company employees to know more then necessary. TRUST NO ONE as they say.

With rates in metropolitan areas running 2% to 3% a year for jewelry insurance, if you make it past the first few years you always will be well ahead. If you suffer a loss after taking all this advice, please don't be angry with me or send me your bill. You do need to be lucky, too and I can't help you with that.

 

[sumi]

I would get the insurance. It's only a few hundred dollars per year. To me, that small price is well worth the peace of mind you will get.

 

[Rand_alThor]

I'm working on the following formula. Assuming I bought a $15000 diamond with a 3% premium for protection, I would be paying $450 annually. In 10 years I would have paid the insurance company around $5K (taking into account inflation and any increases in premium). Thats 33% of the value of my asset. At this point I'm going to stop insurance coverage on the diamond and assume any risks thereafter.




That leaves me with having paid $20K over a period of 10 years with insurance protection. In a nutshell I am paying $5000 over a course of 10 years to insure $15000. You have decide what your appepitite for risk is and what time frame you are willing to get coverage for.




My strategy after year 10 will be to pay myself that insurance premium of $450 a year for protection. If at any point she loses the diamond, I'll step in and get her another stone.




Year 20: I have earned $5k from protection by paying myself


Year 30: I have earned $10k from protection by paying myself


Year 40: I have earned $15k from protection by paying myself




At anypoint during this Year20+ timeframe, (assuming no losses on the diamond), I can then use my additional funds + part savings to trade up and get the mrs a bigger stone.




Hope it helps!!!

 

[PlatinumDiamond]

I keep my items that I do not have on me at any given time in these safes and they are also insured as an add on with my home owners insurance policy. I have my non replaceable items tucked away in a safety deposit box at a bank and they too are also insured.

One thing I don't do though, is over insure the items. I try to keep them at the price I paid for them originally. I wouldn't be out to make a profit if I ever had to make an insurance claim.

With my insurance policy, I can either have the items replaced (as long as they do not cost more to replace then what I have them insured for) or opt for a cash payout. The only way I would receive the full amount of the insured value in a cash payout from my insurance company on the insured items is if it would cost my insurance company more to replace the items or the same as the insured amount. IF the items cost my insurance company less to replace them then what I have them insured for and I decided to take a cash payout instead, I would then only get the amount that it would cost my insurance company to replace the insured items.

I would be happy with either a replacement of equal or greater quality or at least the amount of money back to me that I originally paid.

 

[carottop]

I must agree with oldminer's very sound advice. Like most things in life, this is a lesson that is usually learned the hard way. Young, healthy people often find it difficult to imagine that time in their life when they will need something like long-term care insurance.

IMO my jewelry is a luxury and so insurance on it is also a luxury that I have only purchased after insuring that my family has adequate health, life, disability and long-term care insurance.