Insurance

[ringplease]

Ok, so the time has almost come to actually get and insure my e-ring! My bf who lives in California is in the midst of the ordering process and we are trying to figure out the timeline of insurance as well as some logistical issues. A little history....

The center stone is an old family diamond 1.5 ct RB VVS1 J that was previously in a safe deposit box for 10+ years before my parents gave it to him. The setting is going to be a Jack Kelege that I adore!! Anyway, my BF lives in CA and will be moving to MA where I live in about a month. I don''t know the "details" on the progress of the ring but we were discussing insurance policies and although I am not supposed to know, I don''t think he repeated the appraisal that was done in the 90''s. However, it was an official appraisal and we still have all of the paperwork.

Anyway, here is the question- I know places like CHUBB don''t need an appraisal per se but would they need current info on the stone un-set? Also, what is the time line-Is it possible to get the ring insured before he say, gets in the car and drives away with it? And finally, is it going to be a problem to get the initial policy in CA if he is moving to MA?

Thanks. I apologize if this is repetitive but I couldn''t find any info about this particular issue with a search on here!



Thanks so much in advance!

 

[denverappraiser]

You should get it appraised anyway as a beginning benchmark for what you have although it’s not usually required for a Chubb policy below certain declared value limits. Ask your Chubb agent. Meeting the minimum documentation requirements for the various insurance companies is usually pretty but it's not the insurer that should be picky about the appraisal and appraisal process, it's you. Especially for replacement type policies, your policy is much more valuable if it's been properly appraised.

Logistically you can do it pretty much any time you want. Assuming that you will be the one wearing it, the insured party should probably be you and the location should be MA. Your boyfriend can arrange it all and still keep the 'surprise' intact. Most of the agents who do this sort of thing are national firms but the policy rules and prices vary somewhat from state to state and even from city to city so it’s important to be clear about it with the agent.

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

 

[ringplease]

Thanks for the info. I am pretty sure my BF is planning to do a full appraisal even though it is not required. I think it is smart to just have one anyway. I will pass this info. along to him. Thanks again.

 

[diamondseeker2006]

Right, with a Jack Kelege setting and a 1.5 ct. stone, you need an appraisal on the whole ring in order to insure it for an appropriate value. I would emphasize to the appraiser that you do NOT want an inflated appraisal which will run up your insurance premium.

 

[ringplease]

Thanks, that is good to know. I wouldn''t think that an appraiser would inflate the ring value but I guess you never know.... However, I would rather have the highest realistic appraisal such that if the time ever came to replace it, we could get the same quality and an appropriate replacement.

 

[denverappraiser]

Most appraisers are connected to or even own jewelry stores, auction houses, antique stores and similar businesses where the primary activity is selling things. The result is that they will often put inflated values on their ‘appraisals’ because it makes the items they’re selling look like bargains. This is doubly true if they are actually selling the item at the time. Think about it. It does feel good to be told that you bought something for far less than it’s ‘worth’ but in reality it’s doing you no favors. Here’s why.

The quality of the replacement is based on the description and the photographs, not the budget. With most insurance companies, the way replacement happens is that they will contract with specific jewelers in your area to provide the replacements. They beat them up in advance so that they sell for a pre-agreed markup schedule so the insurer doesn’t need to pay attention to things like sales. With expensive items, like many diamonds, they will get the stones directly from their own suppliers and pay your local store to assemble the piece, rather like a lot of the shoppers here do and largely for the same reasons. Some, like USAA, actually own their own jewelry store and will have their store supply the replacement and some, like Chubb, will simply cut you a check and let you do spend the money as you see fit. Buy a new set of tires if you like.

In the replacement type policies (which is most), the description in your appraisal will become the purchase order for the new piece. They are going to instruct the store to provide you with the cheapest thing they can that meets this description. The only time the budget comes into play is if it’s too low. The store will then try to sell you an upgrade. There’s nothing wrong with this and it gives the store the opportunity to actually make some money in the deal and consumers get the opportunity to get a better piece than the one they lost. They may not have wanted to upgrade for sentimental reasons but, since it’s going to be a brand new piece anyway …

Most insurers will allow you to shop pretty much wherever you like with the exception of places that are obviously inappropriate or that show a conflict of interest but this doesn’t mean that the store gets to charge whatever they want. The insurer has a staff of full time professional shoppers and they know what stuff costs. Really. The CEO of Jewelers Mutual is a highly regarded appraiser. If the adjuster reads the description of your XYZ and decide that they can replace it for $1000, that’s how much they will budget for it. If you choose a store that wants $2000 for it, that’s your choice but they still only pay $1000. Either you must make up the difference yourself, the store needs to lower their price, you need to convince them that their logic is faulty and that matching the description will cost more or you need to shop elsewhere. This is true even if you submitted an appraisal that said it was ‘worth’ $3000 and even if you’ve been paying premiums based on that $3000 valuation for years. It’s the DESCRIPTION that drives the replacement.

Where the policy limit comes in is that this is used to set the premiums. Most policies charge between 1% - 3%/year of the declared value depending on things like your zip code, claims history, type of policy and coverage, deductible and other non-gemological details. It sets the maximum, not the expected, liability. In the above example, where you have a ring that they can replace for $1000, it’s nothing but good news to them for you to submit a $3k appraisal. They get to triple their prices and they have no increased risk at all. How cool is that? Of course they accept it, wouldn’t you?

A weak description is even worse. “Ladies yellow gold diamond ring with 1 carat total weight --- $7,000”. I really did see this written on an appraisal for a cluster ring of I1 I/J sort of diamonds. The customer paid $1000 for it and it would probably cost $700 to replace. Imagine that you are the insurance adjuster when there’s a loss and this comes across your desk. How many stones? What grades? What does the thing even look like? What’s the cheapest ring you can find that will meet that description? Subtract the $500 deductible and you’re looking at a $200 liability. The customer is expecting a $7000 paycheck. It sounds like we’re heading for an unhappy customer, doesn’t it?

That’s why I said above that it’s easy to meet the insurance companies minimum appraisal standards. They set the bar incredibly low. It’s consumers who should be demanding better of service from their appraisers. A pre-loss insurance appraisal should spell out everything about the piece that’s important to you. Weight and grade on the center stone is just the beginning. Manufacturers warranties and grades on other stones, photographs of the mounting details and even the ownership history can all important. If you bought a Tiffany or Mark Morell piece, it’s not a fair replacement unless they replace with a Tiff or an MM and they only way they can know this is if it’s included in the appraisal. Paper is cheap and pixels are even cheaper. Give them the whole skinny. It helps you, it saves you money in wasted premiums and, in the end, it even helps them because it makes the claims process faster and less confrontational.

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

 

[Modified Brilliant]

Ladies and Gentlemen,

This appraiser (Neil) has just told you the truth, the whole truth and nothing but the truth.

Seriously, this is an explanation for all consumers to read and understand.

Good work, Neil

Jeff Averbook, G.G. Graduate Gemologist/Appraiser

www.metrojewelryappraisers.com

 

[stebbo]

Date: 10/7/2007 5:09:33 PM
Author: denverappraiser

like Chubb, will simply cut you a check and let you do spend the money as you see fit. Buy a new set of tires if you like.

"Honey, instead of replacing your ring, how about we buy a new set of tires for the pickup, oh, and a bull bar, GPS nav, fishing rod holders...?"

Seriously though, a full-cash payout might present an awkward situation for the couple who urgently need money for an immediate expense deemed more important.

 

[ringplease]

Date: 10/7/2007 5:09:33 PM
Author: denverappraiser
Most appraisers are connected to or even own jewelry stores, auction houses, antique stores and similar businesses where the primary activity is selling things. The result is that they will often put inflated values on their ‘appraisals’ because it makes the items they’re selling look like bargains. This is doubly true if they are actually selling the item at the time. Think about it. It does feel good to be told that you bought something for far less than it’s ‘worth’ but in reality it’s doing you no favors. Here’s why.

The quality of the replacement is based on the description and the photographs, not the budget. With most insurance companies, the way replacement happens is that they will contract with specific jewelers in your area to provide the replacements. They beat them up in advance so that they sell for a pre-agreed markup schedule so the insurer doesn’t need to pay attention to things like sales. With expensive items, like many diamonds, they will get the stones directly from their own suppliers and pay your local store to assemble the piece, rather like a lot of the shoppers here do and largely for the same reasons. Some, like USAA, actually own their own jewelry store and will have their store supply the replacement and some, like Chubb, will simply cut you a check and let you do spend the money as you see fit. Buy a new set of tires if you like.

In the replacement type policies (which is most), the description in your appraisal will become the purchase order for the new piece. They are going to instruct the store to provide you with the cheapest thing they can that meets this description. The only time the budget comes into play is if it’s too low. The store will then try to sell you an upgrade. There’s nothing wrong with this and it gives the store the opportunity to actually make some money in the deal and consumers get the opportunity to get a better piece than the one they lost. They may not have wanted to upgrade for sentimental reasons but, since it’s going to be a brand new piece anyway …

Most insurers will allow you to shop pretty much wherever you like with the exception of places that are obviously inappropriate or that show a conflict of interest but this doesn’t mean that the store gets to charge whatever they want. The insurer has a staff of full time professional shoppers and they know what stuff costs. Really. The CEO of Jewelers Mutual is a highly regarded appraiser. If the adjuster reads the description of your XYZ and decide that they can replace it for $1000, that’s how much they will budget for it. If you choose a store that wants $2000 for it, that’s your choice but they still only pay $1000. Either you must make up the difference yourself, the store needs to lower their price, you need to convince them that their logic is faulty and that matching the description will cost more or you need to shop elsewhere. This is true even if you submitted an appraisal that said it was ‘worth’ $3000 and even if you’ve been paying premiums based on that $3000 valuation for years. It’s the DESCRIPTION that drives the replacement.

Where the policy limit comes in is that this is used to set the premiums. Most policies charge between 1% - 3%/year of the declared value depending on things like your zip code, claims history, type of policy and coverage, deductible and other non-gemological details. It sets the maximum, not the expected, liability. In the above example, where you have a ring that they can replace for $1000, it’s nothing but good news to them for you to submit a $3k appraisal. They get to triple their prices and they have no increased risk at all. How cool is that? Of course they accept it, wouldn’t you?

A weak description is even worse. “Ladies yellow gold diamond ring with 1 carat total weight --- $7,000”. I really did see this written on an appraisal for a cluster ring of I1 I/J sort of diamonds. The customer paid $1000 for it and it would probably cost $700 to replace. Imagine that you are the insurance adjuster when there’s a loss and this comes across your desk. How many stones? What grades? What does the thing even look like? What’s the cheapest ring you can find that will meet that description? Subtract the $500 deductible and you’re looking at a $200 liability. The customer is expecting a $7000 paycheck. It sounds like we’re heading for an unhappy customer, doesn’t it?

That’s why I said above that it’s easy to meet the insurance companies minimum appraisal standards. They set the bar incredibly low. It’s consumers who should be demanding better of service from their appraisers. A pre-loss insurance appraisal should spell out everything about the piece that’s important to you. Weight and grade on the center stone is just the beginning. Manufacturers warranties and grades on other stones, photographs of the mounting details and even the ownership history can all important. If you bought a Tiffany or Mark Morell piece, it’s not a fair replacement unless they replace with a Tiff or an MM and they only way they can know this is if it’s included in the appraisal. Paper is cheap and pixels are even cheaper. Give them the whole skinny. It helps you, it saves you money in wasted premiums and, in the end, it even helps them because it makes the claims process faster and less confrontational.

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

Thanks so much Neil. This is information I never would have thought of... I guess it makes sense that the appraiser would want to inflate the value but it really does affect us as consumers if we ever needed to replace something so important. I will make sure we have an appraisal that adequately addresses the details of my future e-ring. I am now starting to re-think some of the other pieces I have insured and the way their valuations are written... Thanks again!

 

[MoonWater]

Yay Neil! I just bookmarked this page!

 

[JohnQuixote]

Date: 10/7/2007 5:09:33 PM
Author: denverappraiser

Most appraisers are connected to or even own jewelry stores, auction houses, antique stores and similar businesses where the primary activity is selling things. The result is that they will often put inflated values on their ‘appraisals’ because it makes the items they’re selling look like bargains. This is doubly true if they are actually selling the item at the time. Think about it. It does feel good to be told that you bought something for far less than it’s ‘worth’ but in reality it’s doing you no favors. Here’s why.

The quality of the replacement is based on the description and the photographs, not the budget. With most insurance companies, the way replacement happens is that they will contract with specific jewelers in your area to provide the replacements. They beat them up in advance so that they sell for a pre-agreed markup schedule so the insurer doesn’t need to pay attention to things like sales. With expensive items, like many diamonds, they will get the stones directly from their own suppliers and pay your local store to assemble the piece, rather like a lot of the shoppers here do and largely for the same reasons. Some, like USAA, actually own their own jewelry store and will have their store supply the replacement and some, like Chubb, will simply cut you a check and let you do spend the money as you see fit. Buy a new set of tires if you like.

In the replacement type policies (which is most), the description in your appraisal will become the purchase order for the new piece. They are going to instruct the store to provide you with the cheapest thing they can that meets this description. The only time the budget comes into play is if it’s too low. The store will then try to sell you an upgrade. There’s nothing wrong with this and it gives the store the opportunity to actually make some money in the deal and consumers get the opportunity to get a better piece than the one they lost. They may not have wanted to upgrade for sentimental reasons but, since it’s going to be a brand new piece anyway …

Most insurers will allow you to shop pretty much wherever you like with the exception of places that are obviously inappropriate or that show a conflict of interest but this doesn’t mean that the store gets to charge whatever they want. The insurer has a staff of full time professional shoppers and they know what stuff costs. Really. The CEO of Jewelers Mutual is a highly regarded appraiser. If the adjuster reads the description of your XYZ and decide that they can replace it for $1000, that’s how much they will budget for it. If you choose a store that wants $2000 for it, that’s your choice but they still only pay $1000. Either you must make up the difference yourself, the store needs to lower their price, you need to convince them that their logic is faulty and that matching the description will cost more or you need to shop elsewhere. This is true even if you submitted an appraisal that said it was ‘worth’ $3000 and even if you’ve been paying premiums based on that $3000 valuation for years. It’s the DESCRIPTION that drives the replacement.

Where the policy limit comes in is that this is used to set the premiums. Most policies charge between 1% - 3%/year of the declared value depending on things like your zip code, claims history, type of policy and coverage, deductible and other non-gemological details. It sets the maximum, not the expected, liability. In the above example, where you have a ring that they can replace for $1000, it’s nothing but good news to them for you to submit a $3k appraisal. They get to triple their prices and they have no increased risk at all. How cool is that? Of course they accept it, wouldn’t you?

A weak description is even worse. “Ladies yellow gold diamond ring with 1 carat total weight --- $7,000”. I really did see this written on an appraisal for a cluster ring of I1 I/J sort of diamonds. The customer paid $1000 for it and it would probably cost $700 to replace. Imagine that you are the insurance adjuster when there’s a loss and this comes across your desk. How many stones? What grades? What does the thing even look like? What’s the cheapest ring you can find that will meet that description? Subtract the $500 deductible and you’re looking at a $200 liability. The customer is expecting a $7000 paycheck. It sounds like we’re heading for an unhappy customer, doesn’t it?

That’s why I said above that it’s easy to meet the insurance companies minimum appraisal standards. They set the bar incredibly low. It’s consumers who should be demanding better of service from their appraisers. A pre-loss insurance appraisal should spell out everything about the piece that’s important to you. Weight and grade on the center stone is just the beginning. Manufacturers warranties and grades on other stones, photographs of the mounting details and even the ownership history can all important. If you bought a Tiffany or Mark Morell piece, it’s not a fair replacement unless they replace with a Tiff or an MM and they only way they can know this is if it’s included in the appraisal. Paper is cheap and pixels are even cheaper. Give them the whole skinny. It helps you, it saves you money in wasted premiums and, in the end, it even helps them because it makes the claims process faster and less confrontational.

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

Excellent information Neil. Do you have this published on your site?

 

[BELLA9280]

thanks niel i just called an insurance company today they are calling me with a quote tomorrow this came at a great time!!