Self-insured retention fee ???

[justme1]

When I first got my ering I had it insured based on the appraisal given to us by the jeweler. I have since had it appraised by another, highly recommended, independent appraiser (Thanks Pricescope) who has appraised it at a higher value. So I called my broker to increase my policy. The insurance company now says that they are applying a 10% self-insured retention fee. Is this normal? Does anyone else have this with their policy? Should I be looking for another insurance company?

 

[diamondseeker2006]

Exactly what does than mean? Most of us do not recommend insuring for an inflated amount. Is the appraisal amount what it would really cost to replace the ring or is it higher than that?

 

[denverappraiser]

Huh?

Is this a hugely expensive piece (like 7 digits)? Self Insured Retention (SIR) is where you agree to self-insure up to a certain limit and the insurance company is insuring above and beyond that up to their own limit. You're effectively sharing the risk. It’s sort of like having a huge deductible but where you commit to handling losses in a contractually driven way. It makes a certain amount of sense when very big numbers are involved and this is often the way policies are written for museums and such but I’ve never heard of a consumer encountering it and I can't see why submitting an updated appraisal would have any affect. They must be talking about something else unless you’re the Queen or a rockstar. Ask your agent to explain. Then come back and explain it to us.

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

 

[stebbo]

Are you insured under some sort of umbrella policy? I've heard of SIR being introduced when the policy under the umbrella policy can no longer can cover the insured amount.

 

[justme1]

DA-
Thank you so much for the explanation. LOL- by no means the Queen or a rockstar. It is not 7 digits, but it is close to 6 based on what the appraiser said it would cost to find a stone like the one I currently have, if God forbid, I ever had to replace it. I will definitely be in touch with my agent & will keep you posted. Thanks again.

 

[justme1]

Stebbo - no umbrella - it is a seperate policy.

 

[denverappraiser]

Does the appraiser’s value conclusion seem reasonable to you? Diamonds have definitely gone up in the last few years so it’s not surprising that the value is higher but it’s necessary to apply a reality check. Normally insurance values are based on prices in the ‘usual and customary market’ and this usually means local retail jewelry stores. These values are sometimes difficult to get directly because some stores have a tendency to put prices on the tags that they don’t really expect to realize but if you’re a regular customer or a savvy shopper you probably have a decent feel for what they’re actually charging. Put another way, it’s not the number on the tag that counts, it’s the number on the check. An easy place to start is with the database on the homepage here. Look up offers for stones with similar specs to yours and see what you find. Local stores do tend to charge a bit more than these guys, and branded stones can be a fair amount more but as the price tag gets higher these numbers get closer together. As much as stores would love to be able to double their money on $50k things, it rarely works out that way if they expect to actually make sales. At this price point, if the retail premium is more than, say, 30% or so above what you see advertised here, call up your appraiser and ask for an explanation. Actually, if you don’t understand your valuation, call them up and ask for an explanation anyway. It''s part of what you paid them for.

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

 

[justme1]

DA-
I did check the database & the appraisal is not off by much of what I would need to replace the stone. I have spoken with my agent & we are looking into another policy. Thank you for your thoughts on the subject and all the information you gave, it is greatly appreciated.

 

[diamondseeker2006]

I would suggest looking into Chubb. It seems to be the best jewelry policy out there. It cuts you a check in the event of loss and lets YOU choose the replacement. Many insurance companies want to try to replace your item themselves, and I did not like that. Since I think your ring is new, I would have your fiance provide the appraiser with the sales receipts and have him list the actual purchase price so you are not paying for an inflated premium.