Jewelers Mutual - How Does it Work?

[Klaus]

Hi all. I'm relatively new to posting here (not to lurking though!). So please forgive me if this isn't the right spot to post this. I tried searching around but didn't see an exact answer to my question, so here we go.

Jewelers Mutual confuses me. I am anxiously awaiting a diamond ring from James Allen, and they make it super easy to click a button to apply for JM coverage. I clicked the link, and JM values my ring at about 3k more than I paid for it. Fine, I get it, insurance appraisals are inflated. And JM seems to be popular around here. This is what I don't understand:

1) Will I need to get an independent appraisal also, or is this agreement between James Allen and JM sufficient that JM knows the value of the ring?
2) JM makes a big deal about how you can work with your jeweler to create an equivalent replacement in the event that it is lost. I'd be okay with paying monthly rates based an inflated insurance if I got that actual dollar value in the event the ring was lost or stolen. But it does not make sense to me to pay based on an inflated value if JM is going to pay the actual market value (3k less than the inflated value) to pay for an exact replacement, e.g. I pay based on a value of 15k but then JM gets to pay 12k to replace the ring. Why don't they pay 15k, if that is what my premiums are based on? Honestly, if I'm understanding this correctly, it seems like JM is just another shady merchant in the diamond business taking advantage of the fact that a lot of non-experts buy diamond engagement rings.
3) If I'm going to pay on an inflated rate, it makes sense to me to just add the ring to my homeowner's policy. Then I get the dollar amount that I paid on right?

In sum, how does JM get away with basing your payments on an inflated appraisal value, but then only pay for an exact replacement which is likely much less than that value, if a claim is actually filed? What are my alternatives here? Can I get an independent (lower) appraisal that is closer to the market cost of my ring, so at least I'm paying a lower rate to JM? I downloaded JM's guide and they just make a big deal out of allowing you to work with your jeweler and how great that is, and how with them you don't have to worry about finding an equivalent ring at the same price since they'll just pay for it regardless, but it seems like a big scam to me to blow up the value that much and then not actually pay it. Am I missing something here? Is this how other jewelry insurers work?

For the record, while I love my ring, it is fairly simple in design and relatively moderately priced, for a diamond ring. I really don't give two hoots who replaces it if it is lost, as long as the replacement is similar quality. I would not mind at all just having my insurance cut me a check for the value I've been paying on so I can replace it myself.

Any additional info. is greatly appreciated!

 

[Lookinagain]

3) If I'm going to pay on an inflated rate, it makes sense to me to just add the ring to my homeowner's policy. Then I get the dollar amount that I paid on right?

Not usually, even when you schedule a piece of jewelry on your homeowner's they will generally only pay for replacement value for a ring of similar quality and if that is less than what you insured it for (and paid premiums on) that is still all you will get. At least that's my experience. I can't comment on JM as I've never insured through them. I always ask my jeweler to give me an appraisal that shows what it would cost to replace the ring and not some inflated, retail dollar amount. I wouldn't mind paying a bit more for a replacement value that was a bit higher if I wasn't the type to have my jewelry re-evaluated every few years. That way I would probably be covered if the value went up a bit.

 

[SimoneDi]

JM doesn’t estimate the value, it is what JA communicates to be the value and in this case JA is inflating the appraisal. You can simply use your receipts along with the GIA/AGS info to apply for coverage. I have JM insurance and so far I have not had to file a claim, but they have been super easy to work with when I had wanted to modify the value of my jewelry, add or remove new items.

 

[WinkHPD]

Hi all. I'm relatively new to posting here (not to lurking though!). So please forgive me if this isn't the right spot to post this. I tried searching around but didn't see an exact answer to my question, so here we go.

Jewelers Mutual confuses me. I am anxiously awaiting a diamond ring from James Allen, and they make it super easy to click a button to apply for JM coverage. I clicked the link, and JM values my ring at about 3k more than I paid for it. Fine, I get it, insurance appraisals are inflated. And JM seems to be popular around here. This is what I don't understand:

1) Will I need to get an independent appraisal also, or is this agreement between James Allen and JM sufficient that JM knows the value of the ring?
2) JM makes a big deal about how you can work with your jeweler to create an equivalent replacement in the event that it is lost. I'd be okay with paying monthly rates based an inflated insurance if I got that actual dollar value in the event the ring was lost or stolen. But it does not make sense to me to pay based on an inflated value if JM is going to pay the actual market value (3k less than the inflated value) to pay for an exact replacement, e.g. I pay based on a value of 15k but then JM gets to pay 12k to replace the ring. Why don't they pay 15k, if that is what my premiums are based on? Honestly, if I'm understanding this correctly, it seems like JM is just another shady merchant in the diamond business taking advantage of the fact that a lot of non-experts buy diamond engagement rings.
3) If I'm going to pay on an inflated rate, it makes sense to me to just add the ring to my homeowner's policy. Then I get the dollar amount that I paid on right?

In sum, how does JM get away with basing your payments on an inflated appraisal value, but then only pay for an exact replacement which is likely much less than that value, if a claim is actually filed? What are my alternatives here? Can I get an independent (lower) appraisal that is closer to the market cost of my ring, so at least I'm paying a lower rate to JM? I downloaded JM's guide and they just make a big deal out of allowing you to work with your jeweler and how great that is, and how with them you don't have to worry about finding an equivalent ring at the same price since they'll just pay for it regardless, but it seems like a big scam to me to blow up the value that much and then not actually pay it. Am I missing something here? Is this how other jewelry insurers work?

For the record, while I love my ring, it is fairly simple in design and relatively moderately priced, for a diamond ring. I really don't give two hoots who replaces it if it is lost, as long as the replacement is similar quality. I would not mind at all just having my insurance cut me a check for the value I've been paying on so I can replace it myself.

Any additional info. is greatly appreciated!

I will attempt to answer some of your questions. I am a jeweler, and I have often used Jewelers Mutual. For most, but not all of my clients, JM was less expensive than their homeowner's insurance.

My Evaluation for Insurance Purposes is normally at the value that my diamonds and jewelry are priced for on my site. In cases where I have something that is priced significantly lower than the appraised value, I address that in my limiting conditions. These would be cases, for example, where I made a sample ring and sold it to someone for what it cost me to make it after the sample photos have been taken. Since the item will cost more to replace, I need to appraise it at the retail value of the replacement. To be correct and transparent with the insurance companies or others that will rely upon my Evaluation for any reason, I must also reveal any pertinent information.

As far as you paying a premium for one price and the insurance company being able to replace it at a lower price, that is why the premiums are not higher. If you want a cash value policy, you can get them from some companies, but the premiums are always higher than for a replacement value policy. I used to do a lot of insurance replacement work for several different insurance companies. When someone comes to you several times per year and buys expensive items, they get a price break. In fact most of the insurance companies tell me what the markup is that I am allowed and I have to send them copies of my invoices from my suppliers when doing replacement work for them. I always used to love it, as their permissible markups were higher than what I was charging my clients.

Also, as has been mentioned already, if you get the value assigned this year and three or four years from now you have a loss, chances are very high that the value of the ring will have gone up. If you had an insurance value at exactly what you paid, you are now going to have to come out of pocket to get your ring replaced.

As for your question about getting a lower appraisal. Yes, of course you can. You would be able to do that and send the appraisal to JM and they will modify your agreement.

The cost for your insurance will depend on where you live. In Boise, Idaho, the rate I would pay on an $8,000 ring is $80 or 1%. That means if you were charged for a value of 3,000 less, you will save $30.

If you live in Beverly Hills, CA, your rate on that same ring is $160.00 or 2%. That means you would save $60 on that $3,000.

By all means, contact your homeowner's policy agent and get a quote from him/her. There are other insurance companies out there that may be cheaper than JM and you can contact them also. You will also pay a higher percentage for items over a certain limit. So, for example, you will pay a higher premium percentage for something that costs more than $15,000 than you do for an item under $15,000. You would need to talk to the various companies to see where those breaks are.

In sum, JM charges a premium that allows them to make a profit after all claims are paid. Their rates used to be higher in Idaho (1.3%) than they are now, and they used to be over 4% in the LA area some years ago. I was pleasantly surprised to see the rates now only at 2%.

If JM does not make a profit, they will not be here to pay you when and if you need to file a claim.

Hope this clears it up a little for you.

Wink

 

[MarionC]

My homeowners' only covers theft.
JM covers breakage or loss.

 

[Klaus]

Thanks everyone for your responses! Especially you Wink, that was a nice thorough explanation and I feel like I understand the nuances much better. Ultimately, I could not understand what the benefit of a higher appraisal was to me if they were not going to pay that out, but it's reassuring to know that 1) the lower replacement cost is already baked into the premium, and 2) if the market value goes up I'd be covered. I don't begrudge JM needing to make a profit and stay in business, certainly. Maybe I am defensive having learned a lot about the diamond trade in a short period and basically coming to understand how much consumers are exploited. I tried on rings in a couple mall jewelry stores for size, and the diamonds were so incredibly low quality I could not decide if the sales people hocking them were really that ignorant or knowingly full of sh*t. It was disconcerting, to say the least. And that's not even getting into bait and switch and other frauds perpetuated by shady jewelers.

 

[Bron357]

After working in insurance (and they ARE about making money- they are a business after all) is READ THE FINE PRINT.
For example - theft. Some policies say there must be signs of break in and you must have anti theft deterrents in place ie alarm. So if your ring is stolen from your house and your back door was wide open, you mightn’t be covered.
Travel - some policies only cover domestic ie not while traveling internationally.
Damage - some policies have definitions and % loss payments might have an excess, so if minor damage ie bent prong it might be better to pay it out of your own pocket. And see what they term “wear and tear”, these aren’t normally covered anyway. And as with all policies you should review them every year anyway to ensure sum insured is up to date.
Make sure your policy specifies exactly what you have including diamond specs, weight and manufacture. This is what the insurance gives you when there is total loss.
Check whether you can choose your own replacement diamond and manufacturing jeweller or if they will give you the $$$$ sum insured. Some insurers have preferred vendors who you must deal with.
The most important thing is to be clear exactly what is insured and how it is insured.

 

[WinkHPD]

Thanks everyone for your responses! Especially you Wink, that was a nice thorough explanation and I feel like I understand the nuances much better. Ultimately, I could not understand what the benefit of a higher appraisal was to me if they were not going to pay that out, but it's reassuring to know that 1) the lower replacement cost is already baked into the premium, and 2) if the market value goes up I'd be covered. I don't begrudge JM needing to make a profit and stay in business, certainly. Maybe I am defensive having learned a lot about the diamond trade in a short period and basically coming to understand how much consumers are exploited. I tried on rings in a couple mall jewelry stores for size, and the diamonds were so incredibly low quality I could not decide if the sales people hocking them were really that ignorant or knowingly full of sh*t. It was disconcerting, to say the least. And that's not even getting into bait and switch and other frauds perpetuated by shady jewelers.

Unfortunately, the average sales rep you meet in a mall store is rarely well educated about diamonds and gems. When you start dealing with independent jewelers, you are much more likely to meet highly educated jewelers who can give you better service, better quality, and much better value.

Wink

 

[Miki Moto]

Hi! I can share my experience. I have a jewelry rider with State Farm. I insure my higher end pieces. I went with State Farm as they cut you a check. Other insurance companies will ask you to get the replacement item and the insurance will pay the store, not you. Some only allow you to go to the insurance company's "approved vendor". In addition to theft, State Farm also reimburses you if you partially damage your piece or just flat out lose it (no questions asked).

I have had some insurance claims, and I can share them with you.

- I had a ruby ring and it got chipped (yes, rubies can chip!). I called my agent and told him my ruby chipped. He said bring the ring in, let us see it to assess the damage. I brought it in, they said they would pay for a full replacement, not just the ruby. They took the ruby ring, I got my check. I even asked them if they cared if I purchased a bigger ruby ring, and they said no.

- I had a pair of diamond earrings. I lost one of them but I had the second. I called my agent, told him I lost one earring. My agent cuts me a check for 1/2 the insured amount as I only lost one earring. A few weeks later I receive a second check for the same amount. I call my agent and tell him he double paid me as I already received the check. He told me the second check is also mine. He told me he made a mistake, and since I insured a "pair of earrings" full replacement dictates reimbursing me for both earrings. This incident alone made me a loyal fan of State Farm.

For JM, I would to be specific and ask questions on how exactly to they reimburse. In your case, do you have to go back to JA? Do they pay you or JA? What if you prefer to go elsewhere instead of JA? State Farm does not care as they cut you a check. And what about travel... will they reimburse if you lose your ring while traveling out of the country, etc?

On the JA inflated appraisal... did JA want to make you think you got a good deal and your ring is worth $3K more? Kind of cheesy if they are trying to do that. This is for insurance. The whole goal of insurance is get your lost item replaced. It it not to make a profit. You are paying extra to insure your ring at the inflated $3K price. I would not insure your piece for anymore than what you paid. Chances are, you will not lose your piece, yet you are paying monthly for insurance.

Jewelry insurance is a tough decision and the monthly costs can add up. I went crazy insuring many items thinking "wow, I get my money back if I lose it". But those odds are very low, and my insurance philosophy now is I only insure high end pieces that I would not purchase again without much anguish. Think about it... if you insure something for $100 a month, in 10 years, that's $12,000. I could buy a new piece of jewelry for that amount and odds are very low you will lose it. For that reason, I pulled a lot of stuff off insurance. Something to think about in case you decide to go insurance crazy like I once did. Quite frankly, "under insuring" to me is better than over insuring.

Oh... don't forget to ask if your amount is adjusted for inflation. State Farm adjusts for inflation.

Good luck! I hope this helped.

 

[Bron357]

And I’ll add, none of my jeweller is insured. Never has been.
I worked in insurance, I saw so many jewellery claims get turned down on “technicalities” and here the premium was 5% of value for a comprehensive policy.
In 50 years of owning jewellery I’ve had none stolen and have lost 1 gold hoop earring and 1 gold bracelet. I’ve damaged nothing.
One example, I’ve had my engagement ring nearly 20 years. It’s insurance value would be circa $70,000. So basically I would have by now almost paid $70,000 to insure that ring - that’s another ring!
Because we have good security, because I check my jewellery before wearing (loose stones etc) and I’m careful, nothing lost or damaged - touch wood!
It’s my personal choice.
We have full car insurance, house and contents insurance, health insurance, if we travel we always get the best cover travel insurance and life insurance so I’m not anti insurance, it’s just that I figure I can buy more jewellery every year with the insurance premiums I didn’t pay.
Works for me!

 

[flyingpig]

I will share my story

I got this for 3.4k
https://www.jamesallen.com/loose-di...-color-vs1-clarity-true-hearts-cut-sku-722706

A similar stone at WF was about 4.5k (AGS Expert Selection, not even ACA) back then.

If I lose the stone, the replacement should be something like below at 4.2k. It is only VS2 and GIA.
https://www.jamesallen.com/loose-di...j-color-vs2-clarity-excellent-cut-sku-4558117

At the time, I knew my stone would be difficult to be replaced at 3.4k, so I bought the insurance from JM thru JA with JA's inflated appraisal.

Everyone' case is different. My stone was only 3.5k. So the annual premium is not that significant even with the inflated apparisal. But if we are talking 10k+ stone, things do change.

Lastly, diamond prices have increased a bit for certain carat and color ranges. For an example, I was able to easily find a well cut 1.0c I VS2 for 5k and 1.0c H VS2 for under 6k from JA two or three years ago. Try that today. You pay 10% more, at least for JA. The same thing can be said for 2.0 H VS2; you ain't going to find anything under 20k, which was possible couple years ago.

 

[Yimmers]

Ok, as I have used JM to both replace a damaged ring as well as a lost one, I will relate my experience.

I initially paid an inflated value on my original e-ring in its original setting to insure it through my renter's policy. It was insanely expensive. $500 per year.

I ended up changing the setting (Brian Gavin Novela) and got an independent appraisal on the ring and my wedding band. The revised value was closer to what we had paid (as my appraiser uses the diamond rapapport (sp ) and the current prices of metal. It made me realize that my jeweler had way overcharged on my wedding band... At this time, I switched to JM, and paid less than half of what I paid through my insurance policy.

My wedding band got mangled by that jeweler's bench and I ended up having Brian Gavin create a band that matched my Novela. I simply shipped my band to BGD, who assessed it as a total loss and not fixable. After I had paid my deductible and BGD created my new band. I paid a little out of pocket for extra diamonds for the band. I didn't bother to get the new band appraised, but was fine with my coverage.

Flash forward a couple of years...I lost my wedding set. In order to make a claim, you have to submit a police report stating that it was lost, your signed affidavit attesting to the loss, as well as a signed affidavit from someone else. You are attesting under penalty of perjury that your jewelry was lost, stolen, etc. I also picked a vendor to work with - GOG. They are familiar with JM and after calling them, they knew to be on the look out for communication from JM. You work with GOG to draft a proposed replacement ring of comparable value to your old one, and JM cuts the check to them. Afterwards, I had the amount of the check to come up with my replacement ring. I was allowed to use the check to choose the diamond and setting of my choice, and chose to simply get a larger stone.

Since then, I've had the new setting and stone appraised, and I have insured my new e-ring based on that.

Both times, the process was pretty painless, other than dealing with my damaged or lost jewelry. Since I chose to upgrade, I did pay a little out of pocket (my choice) to get what I wanted. But, I would stick to getting it appraised closer to cost of replacement or what you paid, depending on preference.

As for whether to get insurance? I guess in my case, it was well worth it. My SIL rarely wears her engagement ring out, so she has little chance of losing it. Of course...I lost my wedding set IN MY HOUSE, so I must have some incredibly crappy luck.

 

[TweetyBird23]

I just want to chime in on my very current experience with JM. I have-- well, HAD-- this rose gold eternity band.

https://www.bluenile.com/riviera-pa...old_63042?elem=img&track=product&vtype=sample

I've turned the house inside out and filed a claim for loss. The response time was quick. JM asked for a personal statement describing the loss and another statement from a friend or family member who may have witnessed the loss. I just submitted both statements. The ring is currently priced at $1200 but it was on sale for approximately $920 at the time of purchase. I do not know if JM will simply replace the ring despite the price difference.

My toddler loves to play with my jewelry box. I literally just vacuumed a string of costume (thank goodness) pearls that she annihilated. Insurance in this house is a must. Since BN works with JM, it was just easier to get insurance through them. I hope they come through and that my premium doesn't up go.

 

[TreeScientist]

To echo the sentiments of @Wink, most jewelers will appraise the ring for what they believe it would cost to replace at a local (meaning B&M) jeweler. If you bought the ring online, this appraisal value would typically be higher than the cost that you paid, because B&M stores are typically more expensive than purchasing online. From what others on this site have posted, it seems that James Allen is fair when it comes to appraising their jewelry. Meaning that they don't grossly over-appraise their goods. In my own case, my girlfriend's E-ring cost just shy of $4300 and was appraised for $5800 by JA, so about $1500 over the amount I paid. So, depending on the cost of your ring from them, $3k over cost seems about right. I would be more concerned with the "feel-good" appraisals done by a lot of chain B&M stores. i.e. where their "in-house appraiser" puts a value of $12K on a ring that they sold you for $6K, and that is really only worth about $6K.

I would just go with the appraisal from them unless you think it is vastly over-appraised (like, you paid $3K and it was appraised for $6k). Again, this covers their costs should you choose to go with a local jeweler for replacement. Like Wink said, if the business wasn't profitable for them, then they wouldn't be in business.

 

[Klaus]

And I’ll add, none of my jeweller is insured. Never has been.
I worked in insurance, I saw so many jewellery claims get turned down on “technicalities” and here the premium was 5% of value for a comprehensive policy.
In 50 years of owning jewellery I’ve had none stolen and have lost 1 gold hoop earring and 1 gold bracelet. I’ve damaged nothing.
One example, I’ve had my engagement ring nearly 20 years. It’s insurance value would be circa $70,000. So basically I would have by now almost paid $70,000 to insure that ring - that’s another ring!
Because we have good security, because I check my jewellery before wearing (loose stones etc) and I’m careful, nothing lost or damaged - touch wood!
It’s my personal choice.
We have full car insurance, house and contents insurance, health insurance, if we travel we always get the best cover travel insurance and life insurance so I’m not anti insurance, it’s just that I figure I can buy more jewellery every year with the insurance premiums I didn’t pay.
Works for me!

You make some excellent points! I know what you mean about "technicalities," ugh. I'm pretty good at fine print though. I think since my ring is much less expensive than 70k (wow by the way, it must be amazing!), the cost benefit analysis plays out a bit more in favor of insurance for me. For me I think the relatively negligible annual cost is worth the peace of mind. Anyway, we'll see how I feel once the ring arrives. If I like it I think I'll go ahead and insure through JM. I just don't want to feel like I'm being scammed!

 

[Titan7]

I have been with JM for 23 years, had a claim two years ago, my wife chipped her diamond on the girdle, options were recut or replace, I went with replacement, they work with White Flash so it was a Win! We upsized her diamond at the time also.

No complaints.