Quick insurance question/opinion

[alfdog]

I recently gotten an ering for my gf and I was considering getting insurance from jewelers mutual, because there were quite reasonable in my area. After I had the ring reset, the ring''s IRV increased to 16k, and I guess that 15k is some sort of magic number, because over that the premiums jump from 150 to 200. I''m also considering Chubb, and an agent gave me a quote of 248. Everyone here seems very informed, how many of you think that Chubb is worth the extra 50 bucks a year?

 

[dfm00]

The higher premium was worth it to me, I went with Chubb over JM. I put a great deal of time and effort into choosing our diamond, far beyond considering just carat, color, clarity, and even cut as most non-pricescopers think of it. So if anything were to happen to the ring I don''t want an insurance company to have any input as to what is an appropriate replacement stone.

I think a very detailed report (cut grade, angles, any branding, etc.) by an independent appraiser can go a long way in abrogating this disadvantage of replacement-type policies, but in the end I really wanted the final say on choosing a diamond that has not only the specs I''d look for on paper, but also just feels like the right one to replace the original.

Dave

 

[alfdog]

Thanks, that''s what I''m starting to think. I''d rather have the cash in hand, and maybe give her the chance to upgrade if she wants also.

 

[neatfreak]

To me, it wasn''t worth it because JM DOES let you choose your own jeweler to work with. So to me, that''s just as good as cash since it''s my jeweler saying what stone would be a good replacement...

But I completely understand why many people prefer to pay the difference for Chubb.

 

[kcoursolle]

Both are great companies and the premiums sound reasonable considering that Chubb lets you cash out. If cash out is important to you, then go for them. However, cash out wasn''t important to me since I would get to pick my own jeweler with jewelers mutual.

 

[Horse to Harley]

Date: 6/13/2007 5:34:36 PM
Author: dfm00
The higher premium was worth it to me, I went with Chubb over JM. I put a great deal of time and effort into choosing our diamond, far beyond considering just carat, color, clarity, and even cut as most non-pricescopers think of it. So if anything were to happen to the ring I don''t want an insurance company to have any input as to what is an appropriate replacement stone.

I think a very detailed report (cut grade, angles, any branding, etc.) by an independent appraiser can go a long way in abrogating this disadvantage of replacement-type policies, but in the end I really wanted the final say on choosing a diamond that has not only the specs I''d look for on paper, but also just feels like the right one to replace the original.

Dave

Thanks Dave,
We hadn''t thought of this and as of today upgraded our policy. We want the say and where we are going to fix or replace it if anything ever happens! We are with Chubb for now and they seem very willing to help and answer questions. Thanks again!

 

[nala2000]

Hello,

Does Jeweler''s Mutual cash out or is it just Chubbs? What exactly is ''cash out?'' I have JM.


Thanks.....

 

[nala2000]

Opps.....I meant Chubb.

 

[Skippy123]

State Farm cashes out and is a little cheaper I think.

 

[RockDoc]

RE: Cash out.


The is a serious difference between the Chubb "cash" settlement for a claim with their Stated Value policy, when compared to a replacement policy.

In most geographic areas, ( only a few locations aren''t covered by Chubb for this) if the costs increase above the insured amount Chubb will pay UP TO 150% of the amount you insured the item for if you have to pay more for the replacement item in a store which YOU select.


In a replacement policy.... all companies usually provide the insured with an option to cash out. However, in MOST CASES, their definition of cash out is very different.

A. In a replacement policy, they will NEVER pay more than the insured amount.

B. The insurance company gets replacement cost quotes from their suppliers. If their replacement source, says it cost less, than the value on the policy, then they will pay you the amount that is quoted to them. If the replacement cost is more - then they pay the insured value in cash, and you have to make up the difference, if any.

Side note: Chubb doesn''t have a deductible .


IMPORTANT NOTE: How claims get settled is a case by case scenario. State Farm usually tries to replace the item with the jewelers that offer them discounts, or provide an item that costs them based on a scale of percentage over the jeweler''s cost. That scale varies based on the gross cost of the piece. Generally, the higher the cost, the smaller the percentage of mark up that the jeweler is allowed to charge them.

Each is a case by case situation, and a types of policies vary. Some companies have several products for jewelry.

Regardless of what the agent tells you about paying a claim, the insurance company will follow the terms written in the policy, TO THE LETTER. So it is best to very carefully review the policy you have.

As to being able to go back to " your jeweler" that is fine as long as the item can be replaced easily, but if you have a difficult item to replace, you could chose another source, but knowing you get the insured value paid quickly without adjusters, replacement companies, or alternate sources is a lot less toublesome and time consuming.

In conclusion, with a replacement policy you MAY have to insure the item for significantly more to get "equal" protection, that the Chubb Stated Value policy provides insuriing the item for 30% less. Consumers need to weigh the net premium cost differences, as even though the cost per hundred is greater with Chubb, you may have to insure it for more,which results in possibly only a minor premium cost difference.


Rockdoc

 

[alfdog]

Thanks for the reply RockDoc, that was really informative and also made a lot of sense.

 

[tinsure]

Chubb is definitely worth the extra $50 per year if it is important to you to get cash in hand in the event you have a total loss or need to have the ring repaired and want to make a decision about when and where you wish to have the work accomplished. The difference between a cash value policy and a repair and replacement policy is that the claim is either settled with cash, or settled by having the insurance company send you back to a jeweler and having the insurance company pay the jeweler to do the work for either replacement or repair. Cash Value policies are simple and generally cost more. Repair and Replace policies are a little more complex because of the third party involved, but generally cost less, and can be a benefit because of the trust between the insured and the jeweler and the need to have the jewelry replaced as close to exact specifications as humanly possible.

There are different levels of service depending on the insurance company for both of these policies. If you use a good company (and Chubb is the best) you will be covered as to the stated (or agreed value) of the face value of the amount you are paying for on the policy. In other words if you purchase insurance for $16,000 then that is the amount you will recover in a total loss. Some insurance companies will determine what they would pay for a new piece of jewelry and negotiate a settlement based on some value they have arrived at for determining what a replacement would cost. I believe this to be unfair as the insured is paying for full value and not some lower amount. In Chubb’s case (and in most states) where they offer their Masterpiece policy, the insurance payment could exceed the stated value due to an inflation clause in their contract that pays up to 1.5 times the value of the jewelry.

The repair and replacement policy premium thresholds that you find in the Jewelers Mutual’s policies are not present in GemShield’s rates. Their rates are competitive and remain fixed as the value of the jewelry increases. There is no escalation in cost as values exceed $15,000 and $30,000 dollars. GemShield’s claims settlement involves sending you to your jeweler to get a replacement and they also have an alternative solution in the event that you cannot replace the jewelry to your satisfaction. They will pay a cash value settlement on the policy in the event your jewelry cannot be replaced. They also will take your invoice as a means of valuing your jewelry for insurance which can save you premium dollars; however having a good appraisal can be critical to replacing your jewelry down the road. Well written appraisals are specific to the qualities, workmanship and materials, used in the manufacture of your jewelry and often take into consideration the changing market in a finite time frame (which means that you either need to pay attention to the market on a yearly basis, talk with your appraiser, or have an insurance agency capable of doing so for you).

Being aware of your alternatives, which include having knowledge of the quality of the insurance underwriter and understanding how claims are settled, are critical factors to buying the correct insurance policy for you.

Ralph Cohen

www.touchstoneinsurance.com

 

[denverappraiser]

Cash vs. replacement.

This is a key question in jewelry insurance. The reason that the companies like the replacement route is that it helps insulate them from fraudulent claims and stupid appraisers. When the policy is bound, the customer asks for an upper limit of liability using an appraisal and the company sets their premiums based on this limit. They’ve never seen the item and are relying on the expertise of a completely unknown source. They had nothing to do with writing the appraisal or with hiring the person who did. That’s all up to the consumer who is applying for the policy although selling jewelers love to take control of this process because it makes them look good to say that an item is worth $X and they’ll sell it for $Y and want to use the appraisal process as evidence of what a great deal they got. As long as no claim is ever filed, it doesn’t really matter to them but when a claim comes along it starts to matter a great deal indeed. If the customer buys an item for $1000 and presents an ‘appraisal’ that says it’s worth $3000, they have a huge incentive to ‘lose’ it if they believe that this will result in a $3000 check. Claims go up. What if the $1000 was a ripoff and they could have bought it for $500 if they had a clue? What’s a company to do? The choices are to raise rates, change the claims procedure to make this sort of thing more difficult, to gain some control over the appraisal and valuation process or some combination of all of these.

You see all of these strategies being used but one of the most common is the replacement policy. In the above scenario, if an insured files a claim, the adjuster will discover that they can replace the item for $500 fairly quickly. These people are full time professional shoppers who are plugged into just the right databases and who wield enormous buying power. They know what stuff costs. Some insurers even own jewelry stores outright (USAA comes to mind). They will tell the insured to find a jeweler to replace the item. Since they already have a pretty good idea what the item is likely to cost the store, all that remains is to beat up the jeweler on their margins. That’s why they like to send you to one of their pre-screened jewelers or simply to a store that they own outright. Part of the screening process is to establish the pricing structure for future, as yet unknown claimants. They offer the store a price based on the description and the agreed upon markup, the store delivers it to you and they pay off the bill. Everyone goes home happy and the customer (that’s you) doesn’t even notice that they’ve been paying 6x as much in insurance premiums than was necessary to get proper replacement! That pales the 30% premium you’re considering!

If you’re going to get a replacement policy, it is absolutely essential that the supporting documents be right, that the description is appropriate to result in the replacement that you want and that the value conclusion be appropriate for what it will cost to do that replacement if the item if lost. Done properly, replacement policies are less expensive than cash out policies but done poorly they are far more costly and logistically far more stressful to deal with for claims. It’s not the company that should be picky about the details, it’s YOU.

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