Insured value of a ring.

[kbolt]

If anyone could help me out, that would be great.

I purchased an engagement ring for my now wife in July 2008. With all the help from everyone here, I bought the stone from GOG and the setting from Mark Morrell. We recently purchased a home, and are reorganizing our insurance.
My question is about insurance on the ring, since I don’t want to over-pay for insurance. I''m still wrapping my head around it, and if I''m getting it right, the premium is based on the scheduled value, while the payout is based on the ACV, which can be much less than the scheduled value. The ring and setting were bought for around $14,000. The appraisal from GOG came in at $21,390. What should I insure it for?


Thanks,
Ken

 

[denverappraiser]

Not every insurance company does things the same way so the short answer (and really the only correct answer) is to talk to your agent about how YOUR policy will work. The other thing to watch out for is that ACV is an acronym for ‘Actual Cash Value’, which is an insurance industry term that doesn’t mean what you think it does. That’s the replacement cost new less depreciation. This usually applies to things like furniture or electronics but it’s rarely used for jewelry. They typical jewelry policy is agreeing to replace a lost item with another of ‘like kind and quality’. They will shop their sources for the cheapest price using the appraisal you submit as the purchase order. As long as their cost is less than the face value of the policy they buy you a ring and if it’s more they cash out the policy.

How much to insure for? Talk to your appraiser about it. That''s part of what you''re paying them for.

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

 

[kbolt]

Neil, thank you for the reply. My worry is that the price I paid for the ring and the replacement value are quite different. Should I be wary of a high appraisal? From what I have read on this forum and looking at the appraisal, it seems that the appraisals from Jonathan at GOG are extremely thorough and fair in price. Since the premium collected for insurance is based on the scheduled value, I don''t want to insure for an amount that is too high (basically paying for nothing). In the event of a claim, insurance companies are going to do the same thing regardless, try to find the cheapest way to pay out and still hold up their end of the contract.

Currently I am working with my Allstate agent (who handles my auto and home insurance). They have told me that their jewelry is insured through JIBNA (http://insure-jewelry.com/), whom I have not heard a lot about. Maybe I should look elsewhere?

 

[ct-appr]

Here are some questions to ask your agent (from AGS). They may help clarify some of the issues:

Questions You Should Ask Your Insurance Agent

•Is an appraisal necessary for full coverage?
•Will I have an easier time and more equitable replacement if the appraisal has been preformed by an American Gem Society jeweler?
•What is the difference between scheduled and non-scheduled coverage?
•Is there a deductible? If so, how much? May I ask for a larger deductible for a premium savings?
•Is my policy all-risk (covering damage, robbery, mysterious disappearance, etc.)?
•Am I still covered if there is negligence or carelessness involved?
•Is it covered if lost, stolen or damaged while in someone else''s possession?
•What if only a part is lost, e.g., diamond out of ring?
•If there is a loss, do I have a choice of cash or replacement?
•Can I go to whomever I choose for the replacement or repair?
•If a loss has been replaced or repaired through an insurance company source, will I be allowed to verify proper replacement by a reputable firm?
•If I ask for a cash settlement, will I get the full amount?
•Is there a difference in limitation between jewelry and silverware?
•Are their any geographical limitations to my coverage, outside my home or business, internationally?
•How much will it cost per thousand for full coverage? Partial? What do I sacrifice for the limitation?
•Is depreciation ever imposed?
•How often should I have an appraisal update?
•Am I limited to appraised replacement cost should there be a size¬able increase in the value of my jewelry?
•If there is damage to a piece, can I replace it or must I be limited to repair? If adjustment is limited to repair, am I renumerated for the loss of value?
•What if the lost item is irreplaceable?
•Are there any security precautions required? If not, would it affect the premium if there was?
•What proof is needed to justify a claim?
•What kinds of jewelry insurance are available?
•Are there any exclusions?
•What is the "pair & set" clause?
•What types of property are not covered?

 

[denverappraiser]

Date: 10/23/2009 2:57:35 PM
Author: kbolt
Neil, thank you for the reply. My worry is that the price I paid for the ring and the replacement value are quite different. Should I be wary of a high appraisal? From what I have read on this forum and looking at the appraisal, it seems that the appraisals from Jonathan at GOG are extremely thorough and fair in price. Since the premium collected for insurance is based on the scheduled value, I don''t want to insure for an amount that is too high (basically paying for nothing). In the event of a claim, insurance companies are going to do the same thing regardless, try to find the cheapest way to pay out and still hold up their end of the contract.



Currently I am working with my Allstate agent (who handles my auto and home insurance). They have told me that their jewelry is insured through JIBNA (http://insure-jewelry.com/), whom I have not heard a lot about. Maybe I should look elsewhere?

The purpose of submitting the appraisal report to the insurance company at the beginning of the policy is to serve as the purchase order for the replacement and to provide them a basis for funding. If you believe that the piece can be replaced for less than your appraiser recommended then talk to them about it. The insurance companies hire some savvy shoppers who are at least as skilled at this as you are. Good appraising is an exercise in research and report writing, not in psychic powers and an awful lot of it comes from you, the client, from selling dealers and similar sources. I agree, it does you no benefit at all to insure a piece beyond the cost to replace. A peculiar change in the world is that the classic place people buy jewelry is in jewelry stores and the insurer replaces at lower cost providers but for people who are buying things from the discount online sources, the sources used by the insurers are often actually MORE expensive than what you’ve paid. Your appraiser is supposed to be an expert at this and this is what you’re hiring them for.

At the same time, make sure that the documentation is sufficient to serve as a purchase order. If it was important to you as a shopper, it should be mentioned. Particular items to include are the branding issues on the designer, a copy of the grading lab report on the stone(s), photographs showing the detail of the piece, manufacturers style numbers if they exist, etc. Basically, you should be able to replace the piece using nothing other than the contents of the report and the report should be sufficiently detailed that the cheapest piece they can find that complies with the description given will be satisfactory.

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