Question about insuring an ACA diamond

[mrsctobe]

Hi all, was hoping you could help me understand how I should insure my new diamond, which is currently being set into a ring? I want to keep my monthly premium down, so I plan to have a $500 deductible. My questions are:

1. Should I insure the diamond at the price I paid (say, $20K) which was discounted, OR the original price of the diamond itself (say $23K)? I got a discount for paying wire and for being a new customer. I'm assuming I insure it at the discounted price i actually paid?

2. Does it make sense to keep the premium down by insuring the cost of the stone only, and not taking into account the setting? The setting itself will only cost me about $900 and I dont expect to lose it - only fear is losing or chipping the diamond. So I'd rather just have the appraiser create the appraisal for the diamond itself and insure that. Is that okay, or does it have to be the whole ring?

ANY insight here is helpful!

Thank you!

 

[mrsctobe]

Adding a note that I called Jewelers Mutual and my point #2 above is not possible - if the stone is set in a ring, it must be insured for the cost of the stone plus the cost of the setting, ugh.

If anyone else has any thoughts about point #1 let me know! I am leaning towards getitng it insured for the amount I actually paid (the wire-discount price) plus the cost of the setting (pre-tax)

 

[headlight]

You should submit the actual invoice you receive from WF to JM. And don’t go through the link you get sent… that is inflated. Simply apply and submit the invoice. ALSO: Be sure to reference and scan the AGS report and submit. You want replacement of like for like so you want to make sure your coverage notes the fact that it is a branded super ideal diamond!

 

[mrsctobe]

You should submit the actual invoice you receive from WF to JM. And don’t go through the link you get sent… that is inflated. Simply apply and submit the invoice. ALSO: Be sure to reference and scan the AGS report and submit. You want replacement of like for like so you want to make sure your coverage notes the fact that it is a branded super ideal diamond!

Thank you very much! Yes I have it noted that the jeweler whos writing the appraisal should note that its branded. When you mention "the link you get sent" what do you mean?

JM mentioned today that they wont ensure a diamond on it's own if its put in a setting which is why I probably cant just submit my receipt and the whiteflash cert. Unless I can add a receipt for the setting separately to it. I figured it would be easier to just have the appraiser get a total cost of the ring, adding up diamond cost plus setting cost that I paid (not inflated). Just wasnt sure if it's okay that I'm having him use for the paid-for price rather than the full price without wire discount.

 

[headlight]

Did you purchase the mounting from somewhere other than WF?

 

[mrsctobe]

Did you purchase the mounting from somewhere other than WF?

Yes david klass is making it!

 

[headlight]

In that case I would ask JM if you should submit receipts for the stone and for the mounting. I do not think you need an appraiser given these are new items so you have receipts for current market value. Do contact JM to explain your situation and inquire as to what they require. No need to pay for an appraiser if not necessary. Additionally, no need to come up with some arbitrary amount given they are new goods.

 

[Karl_K]

Make sure if you get an appraisal the diamond is described as a Whiteflash A CUT ABOVE® branded round diamond with ags report #xxxxxxxxx weighting blah, color blah and clarity blah

The part in bold is absolutely required on any appraisal.

 

[mrsctobe]

In that case I would ask JM if you should submit receipts for the stone and for the mounting. I do not think you need an appraiser given these are new items so you have receipts for current market value. Do contact JM to explain your situation and inquire as to what they require. No need to pay for an appraiser if not necessary. Additionally, no need to come up with some arbitrary amount given they are new goods.

Thank you! So if it's the receipt then its the price I paid with wire discount?

Make sure if you get an appraisal the diamond is described as a Whiteflash A CUT ABOVE® branded round diamond with ags report #xxxxxxxxx weighting blah, color blah and clarity blah

The part in bold is absolutely required on any appraisal.

Thank you will definitely do that. How often do you need to get reappraised? I'm not even interested in cash back I would just want the same cut size and color etc back

 

[Karl_K]

Why its important is that the min standard replacement diamond is one that meets the description.
The only diamond that meets the description is another WF ACA diamond you can argue and win.
If its not mentioned they could make a case that a run of the wheel steep/deep gia EX stone is like kind.
Having the proper description helps you counter that it is not like kind.

 

[mrsctobe]

Why its important is that the min standard replacement diamond is one that meets the description.
The only diamond that meets the description is another WF ACA diamond you can argue and win.
If its not mentioned they could make a case that a run of the wheel steep/deep gia EX stone is like kind.
Having the proper description helps you counter that it is not like kind.

Yes for sure will have them mention. If it's like kind/quality then, does the exact cost I get it insured for matter? I am going back and forth on whether I should ensure on exact price I paid which included wire discount, or full price which I did not pay.

 

[Karl_K]

Thank you will definitely do that. How often do you need to get reappraised? I'm not even interested in cash back I would just want the same cut size and color etc back

I would look at like kind diamond prices once a year and once it gets past the point that you feel its under covered you can reappraise.
Also some insurance companies require that the appraisal be redone ever 3 or 5 years.
Ask you're insurance company.

 

[Karl_K]

Yes for sure will have them mention. If it's like kind/quality then, does the exact cost I get it insured for matter? I am going back and forth on whether I should ensure on exact price I paid which included wire discount, or full price which I did not pay.

The insured amount is in many cases the most they will pay, some insurance companies give you a buffer where they will go over a certain % of insured value but I would not count on that.

 

[Karl_K]

past performance is not indicative of the future so use this wisely.
Also there are some weights/color/clarity/cut that do not track the overall averages precisely.
Looking at this chart depending on what size you bought insuring using purchase price you would be both over and under insured at times since 2017.

Natural Diamond Prices - October 2021

Interested in the state of diamond prices? This blog post is a report on the average price of round diamonds for the month of October 2021.

www.pricescope.com

 

[crbl999]

Thank you very much! Yes I have it noted that the jeweler whos writing the appraisal should note that its branded. When you mention "the link you get sent" what do you mean?

JM mentioned today that they wont ensure a diamond on it's own if its put in a setting which is why I probably cant just submit my receipt and the whiteflash cert. Unless I can add a receipt for the setting separately to it. I figured it would be easier to just have the appraiser get a total cost of the ring, adding up diamond cost plus setting cost that I paid (not inflated). Just wasnt sure if it's okay that I'm having him use for the paid-for price rather than the full price without wire discount.

I purchased an ACA last week. One of the follow up emails inquired about insuring your WF jewelry and it included a link for a JM quote. Your purchase information is automatically sent to JM for the quote. Insured amount that was populated was 30-35% higher than the purchase price (wire transfer pricing + new customer discount + sales tax vs. price + sales tax + no discounts). You will find people who insure there items for the amount paid or slightly higher to offset inflation. There is no right or wrong choice here. Do what you are comfortable with.

 

[denverappraiser]

Insurance is usually based on an estimate of the cost to replace new, which may or may not be the transaction price. The company is agreeing to replace a lost or destroyed item with another of 'like kind and quality', or words to that effect. The appraisal you submit with the application will be used as the purchase order for that replacement.

Insurance companies generally insure jewelry, not components. That's why they want to do the whole ring and why they want it inspected as a completed item rather than just adding up the parts. That said, the bulk of the money in your description is in the diamond. A typical JM policy will price out at about 1%/year of your declared value so a $900 mounting will increase you're premium by $9/year. It's good to minimize costs but there's a risk here. If, for example, the diamond falls out and is lost because of a defect in the mounting or craftsmanship or even damage to the mounting. Is that a covered loss? It would be if you insured the entire ring, it probably wouldn't be if you just insured the stone. Spring for the $9.

The JM link that WF supplies is just for your convenience. If you don't want to use it you can still insure with them. Just go in through their website directly.

 

[mrsctobe]

I purchased an ACA last week. One of the follow up emails inquired about insuring your WF jewelry and it included a link for a JM quote. Your purchase information is automatically sent to JM for the quote. Insured amount that was populated was 30-35% higher than the purchase price (wire transfer pricing + new customer discount + sales tax vs. price + sales tax + no discounts). You will find people who insure there items for the amount paid or slightly higher to offset inflation. There is no right or wrong choice here. Do what you are comfortable with.

Thanks so much! I purchased an ACA about a month ago but never received that email about insuring it. Your comment was super helpful though, I think i'd rather go directly to the source and insure it for the amount I paid rather than the non-discounted cost. Im actually still on the fence about whether I want to just "self insure" it...

 

[mrsctobe]

Insurance is usually based on an estimate of the cost to replace new, which may or may not be the transaction price. The company is agreeing to replace a lost or destroyed item with another of 'like kind and quality', or words to that effect. The appraisal you submit with the application will be used as the purchase order for that replacement.

Insurance companies generally insure jewelry, not components. That's why they want to do the whole ring and why they want it inspected as a completed item rather than just adding up the parts. That said, the bulk of the money in your description is in the diamond. A typical JM policy will price out at about 1%/year of your declared value so a $900 mounting will increase you're premium by $9/year. It's good to minimize costs but there's a risk here. If, for example, the diamond falls out and is lost because of a defect in the mounting or craftsmanship or even damage to the mounting. Is that a covered loss? It would be if you insured the entire ring, it probably wouldn't be if you just insured the stone. Spring for the $9.

The JM link that WF supplies is just for your convenience. If you don't want to use it you can still insure with them. Just go in through their website directly.

Thanks so much Neil. This was incredibly helpful, particularly the piece about why its important that I get the whole ring (plus setting) insured - I didnt realize that if I had lost the diamond because of a broken prong, that may not be covered if I only insured the stone itself. Losing the diamond from the setting due to prong damage is actually my #1 fear! What are your thoughts in insuring versus not insuring aka self insuring?

 

[mrsctobe]

I would look at like kind diamond prices once a year and once it gets past the point that you feel its under covered you can reappraise.
Also some insurance companies require that the appraisal be redone ever 3 or 5 years.
Ask you're insurance company.

Great advice, thank you so much!

past performance is not indicative of the future so use this wisely.
Also there are some weights/color/clarity/cut that do not track the overall averages precisely.
Looking at this chart depending on what size you bought insuring using purchase price you would be both over and under insured at times since 2017.

Natural Diamond Prices - October 2021

Interested in the state of diamond prices? This blog post is a report on the average price of round diamonds for the month of October 2021.

www.pricescope.com

Thank you! Diamonds seem to be the one thing that don't fluctuate, or continue to grow upwards in price, as much as other things.. I'll consider that to be a good thing. Plus I purchased last month, when diamond prices were higher!

 

[adlgel]

If the coverage costs 1% of declared value and for example's sake your declared value is $10,000 then annual coverage cost is $100. If you self-insure and lose the ring 10 years in, you are paying out of pocket approx $10,000 to get a like for like ring but you've paid $0 in coverage costs over those 10 years. Total outlay = $10,000

If you buy the coverage and lose the diamond 10 years in, you have paid $1000 in total coverage costs over those 10 years plus your $500 deductible to get a brand new ring. Total outlay = $1,500

In fact at that coverage rate it would take almost 100 years before you would have paid out more in coverage than the cost of replacing the ring outright. Seems like a no brainer to me.

 

[denverappraiser]

Insurance is, by its nature, a losing deal. The companies are betting that you won’t lose it and, based on their ability to build large buildings and hire tons of people with the proceeds, they’re winning that bet. The problem is psychology. For most people, a $20,000 bill isn’t chump change. Losing it is a significant event. Self-insurance means you write a check to replace it. A lot of us, like me, for example, don’t have the finances to do that. ‘Self-insurance’ means I’m willing to take the risk and do without it if I lose it. ‘Risk acceptance’ is a more appropriate term. If I lose it, I’m SOL. That’s the way ALL insurance other than life insurance works, by the way (It’s guaranteed you will die, the bet is over the date. That’s a slightly different sort of bet than what you buy for your car or your jewelry). I ensure expensive things, not cheap ones. In my zip code, it’s about 1% of the declared value per year. In some, it’s as high as 2.5 or 3. (Downtown LA, Manhattan NY). In others, it’s as low as 0.8% or so. I prefer to have it be someone else’s problem.

I tell people this. If you look at the ring and it causes you stress because you fear losing it, buy the insurance. It’s even worse if the fear causes you not to wear it. It’s not very expensive, and that worry undermines the whole point of having it in the first place. If it’s just another bauble that you would rather not lose, but you’ll be fine if you do, don’t do it. Financially speaking, the odds are not in your favor.

Your mileage may vary.

 

[mrsctobe]

If the coverage costs 1% of declared value and for example's sake your declared value is $10,000 then annual coverage cost is $100. If you self-insure and lose the ring 10 years in, you are paying out of pocket approx $10,000 to get a like for like ring but you've paid $0 in coverage costs over those 10 years. Total outlay = $10,000

If you buy the coverage and lose the diamond 10 years in, you have paid $1000 in total coverage costs over those 10 years plus your $500 deductible to get a brand new ring. Total outlay = $1,500

In fact at that coverage rate it would take almost 100 years before you would have paid out more in coverage than the cost of replacing the ring outright. Seems like a no brainer to me.

Thank you! Yes if it was 10k, i wouldnt get insurance. The ring in entirety is about $28500 - $29000, and since im in a city it would cost about $600 per year to insure. Still worth it? Im going back and forth..

 

[Karl_K]

Insurance for a ring is more than anything peace of mind.
Which is why no one else can answer it but you.
Are you 100% comfortable wearing ~$30k on your finger with no protection for the ring/diamond?
If no, get insurance.

 

[foxinsox]

Thank you! Yes if it was 10k, i wouldnt get insurance. The ring in entirety is about $28500 - $29000, and since im in a city it would cost about $600 per year to insure. Still worth it? Im going back and forth..

Sorry but you’re spending $29k and dithering over whether you should spend $600 annually to have replacement value on that $29k should you lose or damage it beyond repair?
It seems like a no brainer to me that yes you insure it. Why do you think it might not be worth it?

 

[mrsctobe]

Sorry but you’re spending $29k and dithering over whether you should spend $600 annually to have replacement value on that $29k should you lose or damage it beyond repair?
It seems like a no brainer to me that yes you insure it. Why do you think it might not be worth it?

Thank you! My thoughts are because I plan to be careful about it (remove it when hiking or swimming in ocean) which lowers risk, plus the fact that insurance companies seem to do whatever they can to not give you a fair deal/short change you to the best of their ability when you do lose it, I'm not sure if it makes more sense to just create an "insurance fund"
I'd pay thousands of dollars over a lifetime and possibly receive a cutrate insurance payout is also what I'd be concerned about

 

[diamondseeker2006]

I only insure my engagement ring and my diamond studs. I insure for purchase price only. Like you, I don't care if I get the exact amount back to replace it. I just don't want to take a hit for $30k+ for my ring. So I'd take the maximum deductible they offer. Can't you insure with the setting receipt and diamond receipt (with copy of the AGS report)? That way the fact that the stone is a WF ACA is established. I basically self-insure the rest of my jewelry. These I wear most often and studs especially seem more at risk of being lost. I have never made a jewelry claim, so all that money has gone to enrich the insurance company! The only difference for me is that I pay closer to 1% of value for my premiums. Yours is really high.

 

[Diamond_Enthusiast]

I plan to be careful about it (remove it when hiking or swimming in ocean) which lowers risk

I'm sorry but from what you've referred to as 'careful', I really recommend you insure your ring if you plan to wear it daily, unless you can afford to lose or have it stolen and not worry about it or just buy a new one. Personally I wouldn't even dream of hiking or swimming in the ocean (not even in a swimming pool) with my engagement ring. I insure my ring even though I won't cook/clean with it or do wear it when I think there is a good chance it can get damaged or lost. IMO if you are wearing something on your finger that is the price of a nice car, it just makes sense to insure it.

 

[lala646]

OP, If the stone were an inherited heirloom, I'd be more flexible on the insurance. But if I were $30K out of pocket, you bet your sweet britches I'd insure the heck out of that ring. Mine was a fraction of that, and I have it insured for 2 reason. First, the style is a bit delicate and I do have concerns about prong damage causing a stone to fall out, and second, you're never as careful as you think you'll be.

I went to the grocery store yesterday, and when opening the shop door, the grab handle slipped and bashed into my hand. HARD. To the point where I now have a visible bruise and swelling on one finger. That door hit my hand so hard, if I had been wearing a ring on that finger, it could easily have damaged the ring. I was not engaging in risky behavior. Just everyday life. Accidents happen. Get the insurance.