Is our insurance company being fair?

[Mikeeb123]

My wife lost her engagement ring. Our insurers have offered us a replacement which is 0.09ct larger, but has a medium blue fluorescence compared to our original that had none. When I questioned it they said that the uplift in size would compensate for the fluorescence. Are the correct, or are they supplying an inferior diamond? Are we better insisting on a diamond the same size as our original with no fluorescence? Both for quality, and as an investment which is the better diamond?

I've attached the details of both below. Our original is the one without a picture, the proposed replacement is the one with the diamond diagram.

Many thanks in advance!

 

[BlingDreams]

They’re giving you a dog. Tell them you want a diamond with the proportions below. Or, if they’ll let you choose the diamond, we can help find one if you give the criteria it needs to meet.

 

[whitewave]

They’re giving you Fluor, plus a Stone that is ridiculously too deep

 

[sledge]

Barf!

Do NOT accept that diamond as a replacement. The replacement diamond is horrible cut quality and should sell for less money. Additionally it has fluor which will devalue the stone more. Some people love and seek fluor (I bought my girl one w/ medium fluor) but the reality is they trade for LESS MONEY, so it's not an equal comparison.

Not to mention -- look at the depth...64.7%.

FYI, your lost stone depth = 3.38mm / 5.50mm (average of 5.45 & 5.55mm L & W dimensions) = 0.614545, or 61.5%

Piss poor crown & pavilion angle (38/40.4) combo, plus 64.7% depth! One of the worst stones I've seen posted here. Again, DO NOT ACCEPT THIS AS A REPLACEMENT!!! Do not even allow them to use as an equal to assess value.


Your diamond that was lost:



The diamond they are trying to replace it with:

 

[lovedogs]

DO NOT accept this as a replacement! It's not even close. Very poorly cut, and will be inferior in performance vs the one you had.

 

[yssie]

What lab is the report for your original stone from? The format and content combination looks like IGI - but which? Some (outside the US) are very highly regarded.

Your insurance company agreed to replace with “like kind and quality”. In this case they’re replacing a 0.62ct D, IF, VG cut from a possibly-reputable authority with a universally-well-reputed 0.71 D, IF, VG cut. You could certainly argue that the fact that the replacement has fluorescence makes it not of “like kind”, especially as fluor is considered a stronger detriment in the higher colours... However, strictly in terms of cut quality, I think you’ll have a difficult time convincing them to upgrade to GIA EX, which those cheat sheet proportions posted earlier will require, unless you find the oddball that gets dinged for an overly-thick/thin girdle, polish/symmetry, or brillianteering.

 

[the_mother_thing]

Agree with all of the above comments.

Who is the insurance company, if you don’t mind sharing? It might be helpful for others to know if they are considering insurers.

 

[Dancing Fire]

DO NOT accept this as a replacement! It's not even close. Very poorly cut, and will be inferior in performance vs the one you had.

TBH, so was her original stone and was graded by IGI?

 

[sledge]

A few more questions:

• Who did you purchase the original stone from?
• Who is the insurance company?
• What was the original value? What is the current insured value?
• Does the insurance company limit whom you can work with?

Maybe these could be used as comparables? If so, the 0.62ct is the one to buy.

0.61ct D IF, $3,163 (58 table, 61.0 depth, 34/40.8 )
https://www.b2cjewels.com/dd/11805445/round-diamond-D-color-IF-Clarity?sku=11805445

0.61ct D IF, $3,147 (58 table, 60.6 depth, 34/40.8 )
http://diamonddealfinder.com/enquiry.php?id_field=274320
http://s3.amazonaws.com/rap.certs/Gia/Certificates/2018/6/18/5293358719.pdf

0.62ct D IF $4,096 (55 table, 61.4 depth, 34.5/40.8, H&A and 75 LGF<fat arrows>)
http://diamonddealfinder.com/enquiry.php?id_field=169715
https://www.gia.edu/report-check?reportno=2185456328&s=1534521204011

0.60ct D IF $4,463 (56 table, 60.1 depth, 31.5/41.0) - Angles bad. Don't buy. But might be useful for comparison because of high value.
https://www.bluenile.com/diamond-details/LD10795355

0.60ct D IF $3,890 (57 table, 61.7 depth, 35/40.6)
https://www.jamesallen.com/loose-di...-d-color-if-clarity-excellent-cut-sku-3637891

 

[rockysalamander]

If you can look for diamonds with better proportions, please do. You can run the numbers through the HCA tool and look for 1-1.9.

James Allen has two 0.62 D IF VG diamonds without flour - $3590 and $5270 (which seems high)
They have three .71 D IF VG with medium flour - $3470, $3560, $3340

So, in sheer dollars, they are equivalent in value. Can you get a payout and buy your own diamond?

 

[Wewechew]

Edited- was wrong about the formatting on the old GIA reports I was thinking of.

 

[diamondseeker2006]

Try to get them to make a cash offer so you can choose your own replacement. GIA Excellent cut is a broad category and only a percentage of those are truly excellent cut. Very good will usually have some decrease in light performance and most here would not buy a very good graded stone after learning about cut quality. I hate to see you replace it with a very good cut, but as Yssie said, that is all they are obligated to do. Whatever you do, do not agree to a stone you cannot see and approve first.

 

[flyingpig]

I like DS2006's advice. Get a cash offer if you can.
If you really have to pick between the two, I would pick the new GIA stone. It is more than a reasonable replacement for OP's original IGI stone.

 

[HappyNewLife]

oh wow. barf is right. I'd just want the $ so I could buy a good diamond.

 

[OoohShiny]

Ask the company for a copy of the Terms and Conditions of your policy, if you do not have a copy already.

You could post up the relevant passages so we could see if you can opt for cash or specify a vendor.

 

[diamondseeker2006]

We have heard of people who were not satisfied with the replacement offer and the insurance company finally offered a cash settlement. It probably won't say it in the policy.

 

[scoutfinch]

I hope your insurance company will give you cash so that you can pick your own diamond.. This is a very personal decision and they aren't qualified to pick a similar diamond based on what they are offering you. What is the replacement value of your original diamond? I'm not expert but others here can give you great advice. Good luck!!

 

[doberman]

Frankly your original diamond wasn't so great from a cut perspective and polish, symmetry were only good. They're not obligated to find you a well cut diamond but to replace like for like. Maybe they'll do a cash payout and you can find a stone with excellent optics.

 

[Mikeeb123]

What lab is the report for your original stone from? The format and content combination looks like IGI - but which? Some (outside the US) are very highly regarded.

Your insurance company agreed to replace with “like kind and quality”. In this case they’re replacing a 0.62ct D, IF, VG cut from a possibly-reputable authority with a universally-well-reputed 0.71 D, IF, VG cut. You could certainly argue that the fact that the replacement has fluorescence makes it not of “like kind”, especially as fluor is considered a stronger detriment in the higher colours... However, strictly in terms of cut quality, I think you’ll have a difficult time convincing them to upgrade to GIA EX, which those cheat sheet proportions posted earlier will require, unless you find the oddball that gets dinged for an overly-thick/thin girdle, polish/symmetry, or brillianteering.

Yes, it was IGI

 

[sledge]

Yes, it was IGI

Inside or outside the USA? If outside, where?

Also, have you heard back from your insurance company yet? Are they willing to offer you a cash settlement? If so, I think that would be the preferable method. Some of the stones I posted earlier are gorgeous if you are thinking of replacements. We might be able to find more once we know how to proceed.

 

[Bron357]

This is why it’s so important to understand the terms and conditions in your insurance policy.
Is it their definition of “like for like”, your choice of vendor / gem or cash up to the value of the sum insured?
Insurance companies usually have preferred vendors, who they love to “screw down on” for a less than wholesale price so “like for like” is their preference.
Check what your policy wording actually is and if you can, get the $$$$ and come back here for further advice.

 

[MollyMalone]

There's a really good reason why the standard, personal jewelry policies issued by, e.g., Jewelers Mutual are not "hand you a check" policies: to reduce the potential for fraudulent claims. (Some personal jewelry polices don't even cover a "mysterious loss", i.e., a loss not due to a robbery/home burglary that was reported to the police).

So don't take umbrage if the insurer adheres to the "replace like with like" term of the policy you purchased & declines to write you a check. If you view this as an opportunity to get a diamond with a better cut, ask how you can get an upgrade using some additional money of your own.

P.S. The GIA-graded diamond they're proposing is .2 mm deeper than the original diamond; have you been been able to confirm with whatever bench would be setting the new stone that it can be "seated" into the current head of the ring with no problem?

 

[the_mother_thing]

P.S. The GIA-graded diamond they're proposing is .2 mm deeper than the original diamond; have you been been able to confirm with whatever bench would be setting the new stone that it can be "seated" into the current head of the ring with no problem?

OP’s wife lost the ring so I don’t imagine this to be an issue.

 

[MollyMalone]

OP’s wife lost the ring so I don’t imagine this to be an issue.

Oops thanks for catching the fact that didn't register with me.

 

[sledge]

There's a really good reason why the standard, personal jewelry policies issued by, e.g., Jewelers Mutual are not "hand you a check" policies: to reduce the potential for fraudulent claims. (Some personal jewelry polices don't even cover a "mysterious loss", i.e., a loss not due to a robbery/home burglary that was reported to the police).

So don't take umbrage if the insurer adheres to the "replace like with like" term of the policy you purchased & declines to write you a check. If you view this as an opportunity to get a diamond with a better cut, ask how you can get an upgrade using some additional money of your own.

Not sure I fully agree with this. At the end of the day, each of us that have policies pay a premium for the insurance company to take the risk of replacement. By offering the policy, the insurance company proclaims it understands the risk, has the expertise to manage the potential risk and then uses some very smart nerds, called statisticians, to develop complex formulas that accounts for a wide array of risk factors.

Here's what bothers me. Let's just pretend the customer pays for a $5,000 policy. The insurance company bases the premium on $5,000 of loss risk. An event occurs. All parties are aware that a payout of some magnitude will be paid. To be clear, the insurance company has/will collect premiums based on a $5,000 loss. And we know the basic formula for the insurance company's profit margin is: premiums - expenses - losses = gross profit margin.

Paying out only $3,500 for a $5,000 policy reduces losses, which has a net effect of increasing the insurance company's profit margin. That's a good deal for them. But what happens if a "like equivalent" would cost $7,500? Then the insurance company then states there is a $5,000 cap on the policy limit and that is all they are responsible to insure and they offer a cash payout.

So when the payout favors the customer, they cut losses to policy limits. And when that doesn't happen, they get the luxury of playing jeweler (in this scenario) and offer a $3,500 replacement so they can minimize loss and boost profit margins.

Imagine a world where at the WORST case scenario the most risk you have to take is to do exactly what you said for the exact dollars you promised. Best case scenario is you don't have to pay out the maximum dollars you promised, and instead can negotiate a lower payout rate; therefore, increasing your profit margins.

And we wonder why there are so many insurance companies.

As far as fraudulent cases. Yes, they occur. But also, insurance companies can and do drop insureds who show a high risk potential because of claim quantity, high dollar risk, location sensitive areas, etc. Or they charged higher premiums for the higher risk.

 

[the_mother_thing]

Not sure I fully agree with this. At the end of the day, each of us that have policies pay a premium for the insurance company to take the risk of replacement. By offering the policy, the insurance company proclaims it understands the risk, has the expertise to manage the potential risk and then uses some very smart nerds, called statisticians, to develop complex formulas that accounts for a wide array of risk factors.

Here's what bothers me. Let's just pretend the customer pays for a $5,000 policy. The insurance company bases the premium on $5,000 of loss risk. An event occurs. All parties are aware that a payout of some magnitude will be paid. To be clear, the insurance company has/will collect premiums based on a $5,000 loss. And we know the basic formula for the insurance company's profit margin is: premiums - expenses - losses = gross profit margin.

Paying out only $3,500 for a $5,000 policy reduces losses, which has a net effect of increasing the insurance company's profit margin. That's a good deal for them. But what happens if a "like equivalent" would cost $7,500? Then the insurance company then states there is a $5,000 cap on the policy limit and that is all they are responsible to insure and they offer a cash payout.

So when the payout favors the customer, they cut losses to policy limits. And when that doesn't happen, they get the luxury of playing jeweler (in this scenario) and offer a $3,500 replacement so they can minimize loss and boost profit margins.

Imagine a world where at the WORST case scenario the most risk you have to take is to do exactly what you said for the exact dollars you promised. Best case scenario is you don't have to pay out the maximum dollars you promised, and instead can negotiate a lower payout rate; therefore, increasing your profit margins.

And we wonder why there are so many insurance companies.

As far as fraudulent cases. Yes, they occur. But also, insurance companies can and do drop insureds who show a high risk potential because of claim quantity, high dollar risk, location sensitive areas, etc. Or they charged higher premiums for the higher risk.

I agree it can suck for the customer, but let's be real - insurance companies don't go into nor remain in business to 'break even', and they have overhead to cover as well. So in the big picture, the current model doesn't entirely seem unfair to me.

 

[Niel]

They’re giving you a dog. Tell them you want a diamond with the proportions below. Or, if they’ll let you choose the diamond, we can help find one if you give the criteria it needs to meet.

Insurance is not there to give you better than what you had. If I understand correctly the cert on the right is the insureds which was only a good cut. An insurance company is going to replace with comparable- not give you a better diamond.

 

[TreeScientist]

Not sure I fully agree with this. At the end of the day, each of us that have policies pay a premium for the insurance company to take the risk of replacement. By offering the policy, the insurance company proclaims it understands the risk, has the expertise to manage the potential risk and then uses some very smart nerds, called statisticians, to develop complex formulas that accounts for a wide array of risk factors.

Here's what bothers me. Let's just pretend the customer pays for a $5,000 policy. The insurance company bases the premium on $5,000 of loss risk. An event occurs. All parties are aware that a payout of some magnitude will be paid. To be clear, the insurance company has/will collect premiums based on a $5,000 loss. And we know the basic formula for the insurance company's profit margin is: premiums - expenses - losses = gross profit margin.

Paying out only $3,500 for a $5,000 policy reduces losses, which has a net effect of increasing the insurance company's profit margin. That's a good deal for them. But what happens if a "like equivalent" would cost $7,500? Then the insurance company then states there is a $5,000 cap on the policy limit and that is all they are responsible to insure and they offer a cash payout.

So when the payout favors the customer, they cut losses to policy limits. And when that doesn't happen, they get the luxury of playing jeweler (in this scenario) and offer a $3,500 replacement so they can minimize loss and boost profit margins.

Imagine a world where at the WORST case scenario the most risk you have to take is to do exactly what you said for the exact dollars you promised. Best case scenario is you don't have to pay out the maximum dollars you promised, and instead can negotiate a lower payout rate; therefore, increasing your profit margins.

And we wonder why there are so many insurance companies.

As far as fraudulent cases. Yes, they occur. But also, insurance companies can and do drop insureds who show a high risk potential because of claim quantity, high dollar risk, location sensitive areas, etc. Or they charged higher premiums for the higher risk.

Well, this is true in a cash payout policy, but it seems like the OPs policy is a "replace with like kind" policy. These policies are usually cheaper than the cash payout policies for the very reason that the insurance company knows that they won't be paying $5000 to replace a diamond that is appraised for $5000. Let's say you're one of the few who doesn't have an overly-inflated appraisal, and were smart enough to have the ring appraised for close to what you paid for it. Even in this case, the insurance company would still be able to get a replacement for much less than the amount you paid, because they have deals with the distributors to give them diamonds at close to wholesale. So in reality, they're never paying out $5000 in a "replace with like kind" policy.

Really, the OP has no right to request a better cut diamond if their original diamond was also poorly cut. In this case, the insurance company is only obligated to replace with like kind, which would be an IGI very good cut. In this case, if I was the OP, I would ask them if I could chip in some money to upgrade the cut to a GIA XXX.

Or, another option would be to ask if it would be possible to downgrade the clarity to upgrade the cut, as I imagine that a well-cut D VS1 would cost about the same as a badly cut D IF on the wholesale market. And I'm sure that everyone here will agree with me that a well-cut D VS1 will look 1000X better than a poorly cut D IF, since no-one can tell the difference in appearance between a VS1 and IF anyway. Personally, this would be the path I would go with re: asking if they could replace if with a well-cut 0.6 carat D VS1.

 

[sledge]

I agree it can suck for the customer, but let's be real - insurance companies don't go into nor remain in business to 'break even', and they have overhead to cover as well. So in the big picture, the current model doesn't entirely seem unfair to me.

I wasn't implying anyone was breaking even, as in zero profit. If I agree to perform a job for a 20% profit and if I manage per the target then I did as projected and still made 20%. If I managed better than planned then perhaps I make 30% profit. If I didn't manage as well, maybe I only make 10%.

Using this fictitious model, the insurance company based its premium on a 20% profit. If they do a cash payout they get 20% profit. If they pay $3,500 on a $5,000 premium they make 30% because they managed risk better.

Insurance is a very profitable business model or it wouldn't exist. None of the companies are offering protection for the greater good of consumers. I certainly feel it's fair they make their theoretical 20% just as I feel its borderline shady pushing people to preferred vendors or insurance companies playing experts in fields they don't know about.

Another more debatable topic is diminished value. This is the value that is lost when a vehicle is wrecked and repaired but sells/trades for less than other vehicles that were not wrecked and repaired. Most insurance companies consider a claim "whole" by paying for the repairs but NOT taking into consideration diminished value.

 

[denverappraiser]

They need to meet or exceed the specs on your policy. Trading fluorescence vs. size is only a valid trade if YOU agree it is. Fluorescence isn’t a defect, per se, but it makes them hard to sell, especially in high colors. That brings down prices.

Here’s a search in the PS database for 0.70-0.73/D/IF/GIA. It has 124 stones and prices range by nearly a factor of 3. You’ll notice that the fluorescent ones are generally concentrated at the bottom. Also, notice that the good/good polish and symmetry on your lost stone is not a good sign. I’m a little surprised they didn’t bring that up.


https://www.pricescope.com/diamonds...1&pageview=24&adv=false&days=100&cert_number=


Here's a search for 062-0.62 with everything else the same. There’s a considerable overlap in the prices, again with the non-fluorescent ones towards the top and the fluoros at the bottom. Does that mean they’re comparable? Not really. They’re similar in price. That’s not the same thing.


https://www.pricescope.com/diamonds...e=1&pageview=24&adv=true&days=100&cert_number=


I second the suggestion above that you find out what they think the face value of the claim is. How much CASH will they pay. That’s what they expect the replacement to cost. That’s very useful information for shopping, even if you don’t end up going that direction.