Newbie Insurance Questions

[hoofbeats95]

Can someone give me a brief summary of insurance options? I''ve searched but I''m a bit overwhelmed.

My diamond from WF is being mounted. I will get it on Sat. At that time I will get a paper for the mounting for insurance. I just got my LOV emailed from WF for the diamond and of course I have the AGS cert.

WF recommends Touchstone. Within Touchstone there are two options and I''m not sure I understand the difference. One is GemShield I believe and the other is Chubb. I''ve also looked at Jewelers Mutual. Not sure how they compare to Touchstone. We could get it insured on my Fiance''s homeowners policy. But to me a company that specializes in Jewlery seems safer in regards of getting the correct outcome if something should happen. We haven''t checked into the homeowners policy. But I''m concerned that there would be a problem if the stone would crack or something. Will they cover that without any issue?

From my understanding I need coverage for stone damage, loss stone and loss of the entire ring. Is that correct? Anything else?

I''m also unclear for what price I insure the stone? My LOV places the retail value of the stone at $1350 more than we paid for it. Is that price I should get it insured for?

Also I would want to be allowed to work with any jeweler in case of damage or loss. Ideally I''d go back to WF. Do some companies lock you into certain jewelers?

Any advice is greatly appreciated. I want to go the best route and am nervous because I''ve never had to insure jewlery before.

Thanks!

 

[BriBee]

Touchstone is an insurance broker that will set you up with a policy either through GemShield or Chubb, whichever you choose. I went through Touchstone to get my ring insured through Chubb, it was very simple and easy. Your best bet is to use the link on WF''s website to go through Touchstone, and you can call over there and have an agent go through everything with you and answer your questions. I worked with Dave and he was great.

And you should have the stone and the setting insured. You can get an appraisal of the whole thing mounted together, or as two separate pieces. I personally recommend Chubb because of the cash payout. If anything happens they simply cut you a check and you do what you want with the money. No hassles of replacements with "like kind" and all that.

 

[elle_chris]

I have Jewelers Mutual. They don''t give a cash payout, they replace the ring/stone.

The way the explained it to me in case of a loss is- if you went through two different companies to purchase the ring, as in store #1 sold you the stone, and store #2 sold you the setting, they go to store number #2 for the replacement.

I was also told that I don''t have to accept what they offer and they would be willing to go to a different vendor if need be.

 

[bgray]

chubb -hands down

 

[hoofbeats95]

How does it usually work when the ring is insured through your home owner''s policy? Do they cash out?

 

[bgray]

yes-we have chubb homeowners. we have single rider for the ring and one other item and then a lump for all other valuables

 

[Regular Guy]

Date: 12/2/2008 10:20:20 AM
Author: hoofbeats95
How does it usually work when the ring is insured through your home owner''s policy? Do they cash out?

We have the rider this way through Nationwide. I''m pretty sure it''s replacement, and not dirt cheap...but I can pay automatically with my other insurance, minimizing paperwork...and I value this.

 

[hoofbeats95]

Hmm. . . I guess I''m going to have to have him call the insurance co. He farms. So he has a LOT of stuff insured. A lot of high dollar equipment. Not sure how a ring plays into that. I was just going to go through a separate company and do it myself. But it may just be easier and pretty painless to add it on to what he already has. I don''t know. I''d probably just prefer payout if it was damaged or lost. I''m not overlooking any other problem that could occur am I?

 

[denverappraiser]

There are two general flavors of insurance as relates to jeweler. The first is an agreement to replace a lost item with another of ‘like kind and quality’ in the case of a covered loss. With these, the description in the appraisal becomes the purchase order for a replacement and they will beat up their suppliers to give them the best deal they can within those confines. As long as the final cost to replace is less than the policy limit, they do it. If the cost to replace is greater than the policy limit they cash out for the limit. Some will allow you quite a bit of input into choosing the replacement provider and others are very narrow about where they get things.

The second is a ‘declared value’ policy where the company agrees to pay a prearranged amount in the case of a covered loss. You can then spend your money however you wish.

In both cases, the source of the value and the description of the property comes directly from the appraisal or other paperwork you submit at the time you bind the policy.

Most homeowners and renters policies offer a certain amount of jewelry coverage as part of their standard bundle but a lot of people find that they need either a separate policy or a special addendum called a ‘rider’ in order to increase the limits for high value items. With jewelry the policy limit is usually $1000 - $5000 or so and it’s pretty easy to get beyond it. This varies quite a bit from company to company and from state to state along with the deductible associated with it. Your agent should be able to explain what their rules are as well as quote you for the premium. To the best of my knowledge, all of these are of the replacement type.

In addition to the familiar homeowners companies who offer coverage to their existing customers there are several companies that will offer standalone jewelry policies that have nothing to do with your homeowners or renters policy. Some of these offers are replacement and some are declared value type. As with the above, the selling agent should be able to explain to you the rules and your options. Insurance is a complicated product and helping you to end up with the right coverage is what the agent gets paid to do so don’t be shy about asking questions.

Premiums are usually based as a percentage of the policy limit and can vary considerably based on where you live, what company you choose, your deductible (if any), your security measures in place and the claims handling procedure. In general the replacement type are less expensive, often by quite a bit. Premiums seem to range from about 1%/year to about 3%/year.

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

 

[denverappraiser]

Date: 12/2/2008 10:28:15 AM
Author: hoofbeats95
Hmm. . . I guess I''m going to have to have him call the insurance co. He farms. So he has a LOT of stuff insured. A lot of high dollar equipment. Not sure how a ring plays into that. I was just going to go through a separate company and do it myself. But it may just be easier and pretty painless to add it on to what he already has. I don''t know. I''d probably just prefer payout if it was damaged or lost. I''m not overlooking any other problem that could occur am I?

Other kinds of personal property (this means everything physical other than real estate) are usually insured very differently. They will usually pay cash in the case of a loss rather than try to go shopping on your behalf but the value of the property is calculated in some arcane ways involving the current cost less a depreciation schedule less your deductible or by a prior agreed upon amount (a declared value policy).

Business property like farm equipment is a completely different issue and will vary tremendously from one policy to the next. Different kinds of industries have specialty insurance companies and the big folks have specialty agents to help with these clients. There are coverage issues like loss-of-income, liabilities and others that complicate the whole process dramatically. Business assets are usually not covered by your homeowners or renters policy. I would be very surprised if you can add personal jewelry to a farm business policy.

In all cases, the rules are governed by the language in the policy itself and the local laws, which vary quite a bit from state to state. Read the policy and talk to your agent. That’s what they’re for.

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

 

[hoofbeats95]

Thanks denver guy for you summary. That helps quite a bit.

I have a question related to replacement vs. cash out. First of all the stone I bought from WF cost $2520. The LOV says retail value is $3850. So which value would the insurance company choose to insure it at? Or is that my choice. Now lets say 10 years later I lose the stone. I can''t see that the market will go down. . . in all likelihood the diamond I bought today will cost somewhat more. So would I be screwed in a cash out policy? Would I not get enough to go buy a replacement?

 

[hoofbeats95]

We can put the ring on the homeowner''s/ farm policy. It was be a separate rider (I guess is the right word). An example she gave is a 5K ring cost about $60/year to insure. But my fiance didn''t ask if it was cash out or replacement. MEN! I sent him a list of questions to ask and he didn''t even ask 1/2 of them. I will have to call next week. Geesh.

 

[neatfreak]

Date: 12/2/2008 11:42:13 AM
Author: hoofbeats95
We can put the ring on the homeowner''s/ farm policy. It was be a separate rider (I guess is the right word). An example she gave is a 5K ring cost about $60/year to insure. But my fiance didn''t ask if it was cash out or replacement. MEN! I sent him a list of questions to ask and he didn''t even ask 1/2 of them. I will have to call next week. Geesh.

You also want to make SURE (as in, have it put IN WRITING) that you can work with whatever jeweler you want for replacement. A lot of homeowner''s riders require that you work with their jewelers which is NOT what a PSer wants because usually their jewelers are pretty bad.

 

[denverappraiser]

Who’s your company? What state are you in?

A ‘rider’ is an addendum to an existing policy that adds or changes coverage for special items. They will billed together and any claims activity will be bundled together. It’s the usual way the homeowners companies deal with fine art, furs, certain types of collections … and jewelry. This is as opposed to a separate policy that’s unrelated to your existing homeowners even though it may be issued by the same company.

I can’t tell you much of anything about what your particular policy is offering but your agent should be able to explain what they are offering.

Replacement with ‘like kind and quality’ can be a tricky negotiation and it’s one of the reasons to get a real appraisal instead of just using whatever the dealer gives you. Remember, the appraisal you submit is the purchase order for the replacement. It’s fair to expect them to buy the cheapest thing they can that meets the specs you provide so include everything you want to be considered at replacement. Examples are model numbers and manufactures of the mountings, scans of the lab documents, photographs showing all of the design elements and branding on both the diamond and mounting if you bought a particular brand (like WF’s ACA brand for example). As a general rule, the more detail the better.

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

 

[hoofbeats95]

I live in IL. His insurance company is Looking Glass Mutual. I am going to have to call them in order to get more details. I should have known better than to give him a list of questions.

I do have an ACA diamond. It says that on the invoice. I also have the AGS cert and the LOV. Do I still need to get more than that? My understanding from WF was that would all I need. Especially if I went with a company like Touchstone.

How has everyone else done this? I didn''t think it would be so complicated.

 

[bgray]

chubb wanted an appraisal with full description and the GIA certificate

 

[John P]

Touchstone and JM are both jewelry-specific insurers with many happy clients. Touchstone can write Chubb (cash out, which costs more) as well as another kind of policy that's in-line with JM's offerings. Both companies are very reputable.

It's wise to research specifics. People relying on homeowners’ policies may not realize ‘like kind’ replacement might be ‘like kind’ according to the insurer’s broker, not the consumer. All too often people believe an inflated value should protect them, and that can be a recipe for frustration and disagreement down the road. Not every situation is bad, but it's concerning enough that we have chosen to tackle the issue to a degree on behalf of our clients.

 

[Char D]

Here is some info on the Jewelers Mutual policy. Note that you can work with a jeweler of your choosing.

http://www.jewelersmutual.com/USAPersonalSubPage.aspx?id=154