Jewelry insurance - How much deductible?

[jmarshall]

Any opinions on the matter? Looking into insurance for my ring I'm in the process of ordering.

Looking to get a quote from Jewelers Mutual and from my local company that I have my home and auto through, as an inland marine policy.

 

[SB621]

Honestly I would pick a deductible that is as close to what you actually paid for the ring. Most store appraisals are inflated so just go with the dollar amount that you paid.

 

[jmarshall]

Honestly I would pick a deductible that is as close to what you actually paid for the ring. Most store appraisals are inflated so just go with the dollar amount that you paid.

I was talking about the deductible I would need to pay out of pocket in the event of a loss.

 

[WillyDiamond]

$100 is pretty common, but ask the agent between the different deductibles and the premium.

 

[Dreamer_D]

I have a $1000 deductible through JM. Saved me about $50 per annum so well worth it for me. Its a fair balance of risk and safety for me that way.

 

[heididdl]

can't you just get a rider on your home owners that's what i have. A jewelery rider and only my best pieces are listed the others are covered over a general pollicy with a deductible. I just lost a $2,000 bracelet that was not individually listed and they still cut me a check for $1,000

 

[diamondseeker2006]

You'll need to compare the rates for different deductibles first. You will do better if your homeowners will accept the sales receipt along with the diamond lab report. JM requires an appraisal and the one from GOG will have a value that is too inflated to use. My insurance lets me use sales receipts which is the true replacement value.

 

[SB621]

You'll need to compare the rates for different deductibles first. You will do better if your homeowners will accept the sales receipt along with the diamond lab report. JM requires an appraisal and the one from GOG will have a value that is too inflated to use. My insurance lets me use sales receipts which is the true replacement value.

Sorry this is what I meant when I said the sales price! Thanks DS!

 

[diamondseeker2006]

You'll need to compare the rates for different deductibles first. You will do better if your homeowners will accept the sales receipt along with the diamond lab report. JM requires an appraisal and the one from GOG will have a value that is too inflated to use. My insurance lets me use sales receipts which is the true replacement value.

Sorry this is what I meant when I said the sales price! Thanks DS!

 

[WillyDiamond]

Well, if you go with JM be aware that they do not increase the value each year, they do not increase each year with an inflation rider. This means, for example, if you paid $5000 for the ring today, and JM accepted the receipt and insured it for $5000, in 5 years it will still be listed on the policy for $5000. Is this what you want? It has been reported on this forum that diamond price have increased 40% in the last year and a half. So if you want a JM policy, and want to keep abreast of the true replacement value, then the burden will be on you to get periodic appraisals and send them to JM. That's you call.

My wife's jewelry is insured under our State Farm policy with a personal articles policy. SF requires the appraisal or receipt for the jewelry. SF does increase the value each year automatically. I am not sure what algorithm they use, but it does go up each year. In the past year however, I did not think it was enough so I had most of her jewelry re-appraised and sent that to the insurance co to up the amount.

Its your call. Best of luck

 

[WillyDiamond]

I have a $1000 deductible through JM. Saved me about $50 per annum so well worth it for me. Its a fair balance of risk and safety for me that way.

Just a little confused, what did the $50 savings do for you comparing 2 deductibles? You have a $1000 deductible, what was the other deductible you compared it to save the $50?

 

[jmarshall]

can't you just get a rider on your home owners that's what i have. A jewelery rider and only my best pieces are listed the others are covered over a general pollicy with a deductible. I just lost a $2,000 bracelet that was not individually listed and they still cut me a check for $1,000

I could, but the premium is no different, and my girlfriend and I are living together and have our insurance together. I will have the ring for ~ 1 month before I propose, and she might get suspicious when our premium goes up because of an engagement ring

 

[jmarshall]

My agent suggested that I insure for the inflated amount on my appraisal, and then that way when inflation drives the price up, there is a cushion before I need to pay for a new appraisal. I think I am going to have my local person write the policy as opposed to JM.

 

[diamondseeker2006]

Diamond prices increased dramatically in 2011. Some prices have softened since then. So if you bought in mid to late 2011, the diamond's replacement value might be less now than when purchased. so it is always wise to follow diamond prices by checking once a year before the annual renewal. But a huge increase in one year is a rare event. I would not over insure for more than 10%.

Jim, your agent is making more money if you over insure. It's great for him but not for you!!!

 

[jmarshall]

He also said we could insure for less than the appraisal, he doesn't want the appraisal for the $$$$, he wants it for the description. I guess I will have to see what the price is vs what it appraises at.

 

[LibbyLA]

Well, if you go with JM be aware that they do not increase the value each year, they do not increase each year with an inflation rider. This means, for example, if you paid $5000 for the ring today, and JM accepted the receipt and insured it for $5000, in 5 years it will still be listed on the policy for $5000. Is this what you want? It has been reported on this forum that diamond price have increased 40% in the last year and a half. So if you want a JM policy, and want to keep abreast of the true replacement value, then the burden will be on you to get periodic appraisals and send them to JM. That's you call.

Not true! I just got my new JM policy and they increased the value on all my stuff even though I told them not to! I called and complained and explained that the value they have is from appraisals that were done within the last year so the values are current. The person with whom I spoke looked at my file and said that he saw that I'd requested that they not increase the value and I'd be getting a new bill.

liz

 

[WillyDiamond]

Well, if you go with JM be aware that they do not increase the value each year, they do not increase each year with an inflation rider. This means, for example, if you paid $5000 for the ring today, and JM accepted the receipt and insured it for $5000, in 5 years it will still be listed on the policy for $5000. Is this what you want? It has been reported on this forum that diamond price have increased 40% in the last year and a half. So if you want a JM policy, and want to keep abreast of the true replacement value, then the burden will be on you to get periodic appraisals and send them to JM. That's you call.

Not true! I just got my new JM policy and they increased the value on all my stuff even though I told them not to! I called and complained and explained that the value they have is from appraisals that were done within the last year so the values are current. The person with whom I spoke looked at my file and said that he saw that I'd requested that they not increase the value and I'd be getting a new bill.

liz

This must be a new thing at JM.

 

[LibbyLA]

I think that it is. They used to require you to go to your jeweler every two years and have the values updated but they've dropped that.

 

[Niel]

Diamond prices increased dramatically in 2011. Some prices have softened since then. So if you bought in mid to late 2011, the diamond's replacement value might be less now than when purchased. so it is always wise to follow diamond prices by checking once a year before the annual renewal. But a huge increase in one year is a rare event. I would not over insure for more than 10%.

Jim, your agent is making more money if you over insure. It's great for him but not for you!!!

Unless hes kind of a crummy agent, i do not think he is telling you to inflate it just for the commission. Even inflated this will be, what, 10k pol? That is not a very large insurance policy for an agent. I dont think he would jeopardize losing your more substantial policies by trying to screw you on a jewelry pol.

 

[diamondseeker2006]

There is zero advantage to the customer to over insure. If he loses the ring a week or 6 months after it arrives, it will cost very close to what he paid to replace it. Even if it is insured for double, they are not going to pay more than what that ring is really worth to replace it. And if JM is now automatically increasing value, there is all the more reason to insure for exactly what one paid for the item. Only the insurance company benefits from premiums that are too high. And yes, agents have quotas and get bonuses, etc. based on the total amount of $$$ coverage they write. One policy won't matter but the total amount they write for multiple policies may.

 

[Niel]

I'm not saying he should over insure but to claim there is no benefit isn't exactly true. Depending on how the company psys out claims for a total loss, it could benefit you. And I just mean insuring for the slightly inflated appraisal value. And the minimal premium increase for a 15% padding int going to bream the bank, nor pad the agts pockets.

For example. Say you buy a second hand LM setting. Insure it for the appraisal not the price you paid. Because the point of insurance is to get you back to where you were before the loss. So regardless of what YOU paid, you want to insure it foe the price it takes to replace.

I've read on here that they expect diamonds to increase 15% so I do not think a 15% buffer is the worst thing in the world if you plan on insuring it and forgetting for a little while.

But I do agree if you plan on keeping up with rising prices and increasing your insurance accordingly, or your insurance does this on its own, no reason to over insure.

 

[Luv-a-Good-Diamond]

Hello! Regarding the deductible, is it best to have a deductible for each item...or just one deductible amount overall (for example: if I have three items and deductible is $500, it is best to do $1500 or just the $500)?

Thanks!

 

[WinkHPD]

Any opinions on the matter? Looking into insurance for my ring I'm in the process of ordering.

Looking to get a quote from Jewelers Mutual and from my local company that I have my home and auto through, as an inland marine policy.

I find the savings on the deductible to be minimal in most cases. You may save a bit on larger policies with a bigger deductible, but even then it will often take fifteen to twenty years to save enough to cover the savings by having a higher deductible.

I make the options known to my clients if they are having me file the insurance through JM for them, but I do not remember actually having anyone choose a higher deductible for the lower policy charge.

Just my thoughts...

Wink

 

[liaerfbv]

I would slightly overinsure (just slightly) since JM is a replacement policy. Even though apparently JM is now accounting for inflation annually, the face amount of the policy is the CAP of the policy no matter the replacement value of the piece.

For example, my e-ring was appraised at 14,500. At the time I didn't understand appraisal/replacement values so that's what I insured it for. When I lost my ring, the jeweler I chose had to value my ring based on the appraisal info. I want to say that number was ~12k. So that's what my policy covered. Now since I only had the policy for a few years before I lost my ring, I lost money on the over valued premiums I paid. But if it had been 5-10 years later, inflation would have likely caught up to the appraised value of my ring.

ETA: to clarify, if at 10 years I had lost the ring and the replacement value was calculated at 16k, the policy would have only covered up to 14.5. That's what I mean about the cap.

 

[BLC]

There is zero advantage to the customer to over insure. If he loses the ring a week or 6 months after it arrives, it will cost very close to what he paid to replace it. Even if it is insured for double, they are not going to pay more than what that ring is really worth to replace it. And if JM is now automatically increasing value, there is all the more reason to insure for exactly what one paid for the item. Only the insurance company benefits from premiums that are too high. And yes, agents have quotas and get bonuses, etc. based on the total amount of $$$ coverage they write. One policy won't matter but the total amount they write for multiple policies may.

Not necessarily true.

There are essentially three ways to schedule jewelry:

1. Agreed Value - the carrier owes the amount it is scheduled for regardless of replacement cost (best choice)
2. Lesser of the cost to repair or replace - this allows the insured to increase the special limit given to jewelry and up the limit on specific items (would not recommend)
3. Blanket - specific to certain carriers and raises special limit without having to specify individual items, generally limited to $5,000 max per item even if you have a $30K or $50K schedule. (Good when you have quantity of lower dollar items)

This information is all relative to standard market carriers and you should always understand what your specific form says. I'm a P&C Underwriter so I deal with this type of stuff on a daily basis.

 

[WinkHPD]

I would slightly overinsure (just slightly) since JM is a replacement policy. Even though apparently JM is now accounting for inflation annually, the face amount of the policy is the CAP of the policy no matter the replacement value of the piece.

For example, my e-ring was appraised at 14,500. At the time I didn't understand appraisal/replacement values so that's what I insured it for. When I lost my ring, the jeweler I chose had to value my ring based on the appraisal info. I want to say that number was ~12k. So that's what my policy covered. Now since I only had the policy for a few years before I lost my ring, I lost money on the over valued premiums I paid. But if it had been 5-10 years later, inflation would have likely caught up to the appraised value of my ring.

ETA: to clarify, if at 10 years I had lost the ring and the replacement value was calculated at 16k, the policy would have only covered up to 14.5. That's what I mean about the cap.

I think perhaps you are misunderstanding the ramifications slightly.

While it may only have cost your jeweler ~12k to replace your ring, he could have spent up to the entire $14,500 had it been necessary to do so. If your appraisal was properly done with the brand of the diamond (assuming there was one) and the brand of the ring (same assumption) then your jeweler was obligated to replace with a diamond of the same brand and quality or better if one exactly the same was not available.

I do not know what the rate is in your area, but in my State of Idaho the rate is 1.5%. So, assuming that your ring was in fact over appraised by $2,500 that would have cost you, in Idaho, $37.50 per annum. Pretty cheap protection should there have been a spike in prices such as there was just a few years ago.

Here is what happened with a client of mine a few months ago. I am not going to use exact numbers, but numbers that will illustrate the problems with being penny wise and pound foolish with insurance. (Not implying that you were, actually, in my opinion you were properly covered.)

He bought the ring, shall we say in May. Paid 9k for everything, including the mounting. Took it to a local jeweler, it was appraised for $12,500 and insured for that higher value. It was an oval, well cut with virtually no bow tie, I looked a long time for it and it was a BARGAIN that I found for him with a long ago vendor who just happened to have this one in stock for some time. I passed on the price break to my client as is my practice.

She chipped it in August, a nasty stair step cleavage at its widest point going down nearly to the culet. No way to recut it and have it fit into his custom made ring, nor did she want to settle for a tiny version of the glory she once had.

I went back into the market. Oh OH!!! Nothing even close to the measurements and weight that he "lost" that was not at least once color and one clarity grade higher than what he was insured for. I talked with three different vendors about their listed diamonds until finding one that sounded like it would not have a disruptive bow tie, and naturally, it was the most expensive of the three that were candidates for this replacement. It's cost was over the 9k that he had paid for EVERYTHING.

I called and talked to the JM rep that was handling the replacement. She said, "Oh, no problem, he is covered up to $12,500 by his policy and we are quite used to having to go up one color and/or clarity grade if we have to in order to make our clients whole." When I first talked with her I even offered to lower my commission, which is set by JM in order to make this diamond work for my client. She told me that would not be necessary provided my total bill came to less than $12,500. All I had to do was send them copies of my invoices, add my commission, collect the $100 deductible and have my client sign the "I am happy" release.

Oh, and provide them with a new appraisal so they could offer to reinsure him at the new higher value of his now worth more ring.

Had he insisted on a policy at or near what he paid for the ring, he would have been out over $2,000 to make the replacement he got.

You tell me, which was the better deal for him. A potential overpayment of 1.5% x 3,500 (in Idaho) which would have been $52.50 per annum or a loss of over $2,000 when the diamond was damaged?

But, you say, "We did not know the diamond would be damaged or that oval prices would have increased during such a short time frame."

Absolutely true I reply, but that is why we, as a nation, "invest" billions of dollars a year in insurance for things that never happen. It is the possibility that they could happen and the fact that we can afford the $52.50 per year but not the 2,000 that makes us buy insurance in the first place.

My professional appraiser friends all tell me that an appraisal is a snapshot in time of the value at that time and many will try to tell me that an internet sale should be appraised at the internet price and all of them tell me that we are not fortune tellers and should not build a cushion into our appraisals. Balderdash say I. My "Valuations for Insurance purposes" are exactly that. They start out with a reasonable cushion because most people will NOT update their appraisal every year or every two years or every six months if they read that prices have just gone up. We/they are just too busy with work and life.

I am often told that it is unethical of me to offer an evaluation for insurance purposes on things that I sell. I say balderdash to that too. Who knows better than me what it cost to custom make that ring, or what the value of a Crafted by Infinity diamond is? (Denver Appraiser is one of the few I know of who has taken the time to become familiar with such things as the Crafted by Infinity and other branded diamonds, but that is only because he is one of the best "Professional Appraisers" I have ever had the pleasure of meeting.)

I am glad you had sufficient coverage to protect your diamond. I do not think there is any way you could have known exactly how much it would cost your jeweler to replace your ring at the time it would be lost and I think it was good that you had what turned out to be a small extra cushion to protect you against future price increases.

Wink

 

[ame]

ZERO DOLLARS. I would pay more in premiums to avoid any such deductible.

 

[MarionC]

Just got JM for the first time and I'm thrilled to have the piece-of-mind to really enjoy my ring without worries. From now on I will insure diamonds with them. I didn't look at the policy closely, so I don't if or what the deductible is. I can look at diamonds with a loupe all day, but somehow can't seem to read fine print.
I was totally unaware until this past month that my homeowners' policy does not cover chips or breakage - and they were charging a lot to insure my rings!