Find your diamond
Find your jewelry
shape
carat
color
clarity

Why does one need specialty Jewelry insurance?

phaskellhall

Rough_Rock
Joined
Jun 11, 2019
Messages
31
I’m in the process of getting my ring insured and I’m planning on going to a recommended appraiser recommended here. I was talking to my buddy who already insured his wife’s ring years ago and he thought the whole process I’m about to go through was ridiculous. He says just use the purchase receipts and insure it for the value o bought it at.

He simply put their ring on their home owners insurance policy and said insurance should work based on the premium. Insurance usually works where you pay $x amount a month for $x amount of replacement cost. So if you bought a ring for $10k and pay $200 a year for insurance of that ring, if it were lost you should get a replacement cost of $10k right?

Why is it smarter to 1) go through a specialized jewelry insurer and 2) get a PS recommended appraiser over any ordinary jewelry appraiser when both will probably appraise your jewelry for the same 10% more than what you paid for?

I understand making a claim on a $15k ring might affect your home owners rate but are their other reasons not to just make your life easier by having it all together?

Yesterday State Farm called me and said that because I took my SUV off my joint policy, my home owners insurance was going to go up significantly. I actually shipped my car outside the US and so I can’t insure it through State Farm but maybe insuring my ring on the same policy would give me the same bundled discount that the car gave me. They are telling me my home owners insurance will go up about $1200 a year now that my car has been removed.
 

Rose-gold-or-bust

Shiny_Rock
Joined
Aug 7, 2019
Messages
310
A lot of homeowner insurances limit you to $1000-ish for jewelry unless you add it as a valuable items rider. I have a valuable items rider for my camera equipment ($6k worth) and it costs me more yearly than my jewelers mutual policy for my jewelry, even though the jewelry that is insured is worth more.

JM also allows you to pick your jeweler I believe, I can’t say if State Farm would do the same.
 

Rockdiamond

Ideal_Rock
Trade
Joined
Jan 7, 2009
Messages
7,960
JM is a pleasure to work with, from the side of the jeweler.
When a fine micro pavé ring ( say a 1.8mm shank) gets bent, repair becomes unreliable ( more stones fall out after the ring is fixed)
JM understands this and pays for a new ring- and allows the insured to pick the jeweler they want to use.
A bill of sale - if it's detailed- is all you'll need.
 

OoohShiny

Ideal_Rock
Premium
Joined
Apr 25, 2014
Messages
6,669
You are insuring less and they are charging more? And the insurance industry wonders why people think it is all a massive scam... :rolleyes:


As above - all insurance is not equal.

Will it pay cash out?
Will you be forced to use their 'recommended' jeweller? (i.e. the one that minimises their payout)
Will any generic GIA stone picked off a list be what you are required to accept?
Will you be able to specify 'a CBI/WF/BGD top-cut stone that is eye-clean, to the value of $x'?
Will it be New for Old or will they assume the asset is depreciating in value over time?
Is it All Risks, Worldwide insurance?
 

denverappraiser

Ideal_Rock
Trade
Joined
Jul 21, 2004
Messages
8,709
That’s a great question. Here’s a few reasons.

#1 The usual procedure for an insurance claim is to replace the lost item with another of like kind and quality or words to that effect. That is to say, they aren’t going to write you a check, they’re going to buy you a new ring. They are going to use the paperwork you submit as the purchase order for that replacement. This includes the weights, karatage, designers, model numbers, photographs, dimensions, and whatever else is there. Fundamentally, they will buy the cheapest thing that meets the description that YOU provide. Most sales documents are woefully insufficient for this purpose.

#2 One of the big reasons people get new things appraised is as part of the quality control step in the purchase. Is it as represented? Are there craftsmanship or condition problems? Material defects? Seller supplied documentation rarely if ever addresses any of this and, in any case, it’s not a second opinion if it comes from the same source as the first.

#3 An appraisal, like a sales receipt, has a date. This isn’t so much an issue for new purchases as a matter of updates over time. Values change. Condition changes.

#4 Homeowners use a system called CLUE to track claims. A claim is a claim even if it’s small, and too many claims will get the rates on your house raised or worse. On CLUE, a relatively small jewelry claim counts the same as a fire in this calculation. If you can’t make a claim for fear of repercussions from the insurance company, why have the policy at all?

Why use a trained and skilled appraiser? I’ve mentioned above why not use the same person who sold it, or someone who is working for them, but why not just go with the cheapest? Go back to #1 above. It’s not all that hard to do a report on most new jewelry but it’s amazing how many do it poorly. For example: Is it signed and dated? Are there even photographs at all, and if so do they adequately describe the piece? Do they include details like the ring size, stone counts, grades on the side stones, weights, brand markings, condition, etc? Did they include what they mean by ‘value’? If they didn’t, they’ve missed the assignment and it leaves you open for some serious grief at claims time.
 

Rockdiamond

Ideal_Rock
Trade
Joined
Jan 7, 2009
Messages
7,960
Neil- your point #1 is yet another reason JM is so good for consumers insuring jewelry.
For sure, many insurance companies behave just as you state- but JM will indeed cut a check to allow the insured to replace- or even upgrade the lost or stolen jewelry. We've been involved in many such replacements.

In terms of how much info is provided by a seller- again, you're correct that many places selling diamonds and or jewelry provide scant information on a bill of sale.
BUT- I'd wager than anyone reading this would not accept an incomplete bill of sale on an important piece of jewelry.
We never discourage anyone from having an independent appraisal done- at the same time we make sure to provide a complete description, detailed and suitable for insuring the piece we've sold.
I'd also wager that pretty much every prominent PS vendor also supples a full and complete bill of sale on important purchases.
 

denverappraiser

Ideal_Rock
Trade
Joined
Jul 21, 2004
Messages
8,709
Will it pay cash out?
Will you be forced to use their 'recommended' jeweller? (i.e. the one that minimises their payout)
Will any generic GIA stone picked off a list be what you are required to accept?
Will you be able to specify 'a CBI/WF/BGD top-cut stone that is eye-clean, to the value of $x'?
Will it be New for Old or will they assume the asset is depreciating in value over time?
Is it All Risks, Worldwide insurance?
More great questions:

Will it pay cash out?
Probably not. There are a few cash-based insurance policy but they are few, expensive, and getting fewer. Expect premiums that are 2-3x those of the replacement type. Also be aware that the ones who cash out aren’t usually agreeing to pay cash in the amount of the appraisal. They’ll use the same procedure outlined above about replacement and figure out how much THAT will cost. If it’s less than the face value of the policy, that’s how much they’ll pay (less your deductible) and if it’s not, they’ll cash out at the policy limit.

Will you be forced to use their 'recommended' jeweler? (i.e. the one that minimizes their payout)
Probably. Some, like State Farm, have pretty big lists but tend to steer to their favorites. Others, like Jewelers Mutual, will allow you to use whatever jeweler you want but they may or may not be willing to pay the jewelers price. Some have decidedly short lists of providers or will require the replacement jeweler to match the price of the cheapest jeweler they can find.

Will any generic GIA stone picked off a list be what you are required to accept?
Probably, or at least they’ll try. Fundamentally, they must meet or exceed the specs you provided at the beginning. For example, fluorescence. If it’s not mentioned on your paperwork, they are not bound to a particular. HCA? Hearts and arrows? If it’s not on the report, it’s not one of the specs. If all the report says is GIA/1.10/VS1/F, that’s all they are obligated to find.

Will you be able to specify 'a CBI/WF/BGD top-cut stone that is eye-clean, to the value of $x'?
Maybe. Again, it needs to be on the paperwork. If the brand exists at the time of the claim and they are able to do the replacement within the budget provided, that’s normally what they do. If the brand isn’t part of the original specs, it won’t be added later.

Will it be New for Old or will they assume the asset is depreciating in value over time?
Usually it’s new for old. Exceptions happen with things like watches and certain vintage things where ‘new’ doesn’t exactly make sense.

Is it All Risks, Worldwide insurance?
This varies wildly. Some do and some don't. Read the small print.

These things vary quite a bit from one policy to the next, from state to state and from company to company. Insurance is a regulated and complicated business. These sorts of questions are why you have an agent and why the companies have help lines. Ask them.
 

denverappraiser

Ideal_Rock
Trade
Joined
Jul 21, 2004
Messages
8,709
David. JM will not simply issue a check for the full policy limit on most of their policies. They are replacement policies, not stated value policies. They will send you to a replacement jeweler and, if that’s a problem for whatever reason, they’ll estimate what they think it ‘should’ cost and either pay that amount or the policy limit, whichever is lower.
 

Rockdiamond

Ideal_Rock
Trade
Joined
Jan 7, 2009
Messages
7,960
Interesting Neil- I'm not doubting you- but our experience ( and on many occasions) is different.
Maybe our clients had a different sort of JM policy- but in all cases I'm speaking of, the client was allowed to choose, and chose us to do the replacement. In some cases we were the original supplier- in other cases, we replaced a ring which was stolen- but purchased somewhere else.
The check was made out to us in most cases.
JM does have a policy with a formula that allows a given percentage of profit over wholesale costs- and in every case, the margins were generous enough to completely replace some very costly items.
And as I said- in other cases, the client decided on an upgrade. JM didn't give a hoot how much more the client was spending- they just issued a check for the insured value.

ETA- as this thread is specifically about specialty insurance- in cases where the client was not insured by JM- ( maybe as a rider on a homeowners policy) the process is nowhere as easy or streamlined as it was with JM
 
Last edited:

Modified Brilliant

Brilliant_Rock
Trade
Joined
Mar 24, 2005
Messages
1,481
Consumers should review their policies annually as some well known insurance companies automatically add an "inflation boost" which, in turn increases your premium. Also, from my experience some of the luxury retailers issue an inadequate statement of sale which may be used for insurance purposes but might be woefully lacking on details.
 

whitewave

Ideal_Rock
Premium
Joined
Feb 29, 2012
Messages
8,811
I have two rings on a cash out policy and they are crazy expensive but they are in a bundle.

So I have two pieces with my homeowners and the rest are with State Farm, and yes, it did give me the multi policy discount.

I also have some pieces that aren’t insured. Technically, you don’t NEED insurance, but it’s obviusly good to have.

My biggest concern would be a mugging or something where I get several pieces stolen at once.

I have a few once a year pieces that I don’t have insured and I take the risk. They are under 3k and are not worn at the same time.
 

MollyMalone

Ideal_Rock
Premium
Joined
Jun 2, 2013
Messages
2,917
@Rockdiamond, think there's been some misunderstanding between you and @denverappraiser . When he said "JM will not simply issue a check for the full policy limit on most of their policies," he was saying that the insured consumer could not expect to receive a check from JM. Whereas it seems you're speaking from a jeweler's perspective in that JM's checks have been made out to you.

Jewelers Mutual's website no longer even mentions the possibility of a stated value policy (although they do still issue them, at least here in NY). They make a point of telling consumers that getting "cash" is not an option because "we specifically created a repair or replacement jewelry insurance policy" -- unless the jeweler (like, e.g, Tiffany) won't work with JM; in that case, the consumer pays the jeweler and submits the necessary paperwork to JM for a reimbursement check. See the first FAQ at the bottom of this page:
 
Last edited:

Rockdiamond

Ideal_Rock
Trade
Joined
Jan 7, 2009
Messages
7,960
HI Molly,
We've had both situations..... our company getting paid directly through JM, or in other cases, submitting the bill, and the consumer gets the check and pays us.
Although it's certainly possible changes are occurring, we've found JM to be remarkably easy to work with.
 

MWM

Rough_Rock
Trade
Joined
Aug 5, 2019
Messages
4
There is nothing fast of particularly comfortable about the experience of filing a claim with your insurer. Over the years, some of my JM insured folks have had losses. JM took good care of my clients and did not protest the fact that the lost mountings were bespoke and their replacements would be made by myself, in line with client wishes, as well.

JM has earned my respect. I recommend JM Consumer Division for all of my higher value projects.
 

sledge

Ideal_Rock
Premium
Joined
Apr 23, 2018
Messages
4,077
I breezed over the comments but you were curious if the jewelry policy through SF might help compensate for the loss of your multi line discount by shipping your vehicle overseas and removing it.

The short answer is no.

Guns, jewelry, etc are covered under your homeowners policy. By default SF offers some amount, I believe $5k as I used them for many years. While new to the jewelry game, I've had additional policies for all my guns.

For you to get multi line, you need another vehicle or possibly a life insurance policy. For $1,200+ per year you can probably find a solution.

FWIW, I have JM for my wife's ring now. Currently using USAA for my vehicle & home insurance needs.

Others have also reported good results with Chubb. I've used commercial lines of insurance with them but not personal.

Alas, if you are current or ex-military you qualify for USAA insurance who's rates are pretty competitive. If active, they should cover your vehicle that is abroad as well.

 

Wink

Ideal_Rock
Trade
Joined
May 3, 2001
Messages
7,372
I was going to respond to the OP, but great answers have already been thoroughly given. I will add my voice to those who appreciate the quality and spirit of work provided by Jewelers Mutual. For a claim, I provide a copy of my invoices for pieces and parts and JM pays me my costs plus a markup based on those costs. It is fair to all concerned.

When I was much more actively involved in insurance replacement work I found them to be consistently the easiest to work with. On the rare occasions I felt there needed to be changes in how things were being done, I emailed the home office and started a discussion. Emails were always responded to, often with phone calls. At trade shows I would "wander" by their booth and was on a first name basis with many of their top people, all long since retired.

The people I knew, and the few I have spoken with in the past year or two were all good people. All were sincerely interested in protecting their clients. Never in my forty year association with them has anyone at JM tried to deny me the ability to replace a well cut diamond with a well cut diamond.

That alone, in my opinion is why it is worth the time and expense to properly appraise and insure your jewelry with a professional who knows how to properly appraise the jewelry and to use a jewelry specific insurance company to insure it with. It is beneficial to all concerned.

Wink
 

distracts

Ideal_Rock
Premium
Joined
Oct 11, 2011
Messages
5,359
I breezed over the comments but you were curious if the jewelry policy through SF might help compensate for the loss of your multi line discount by shipping your vehicle overseas and removing it.

The short answer is no.

Guns, jewelry, etc are covered under your homeowners policy. By default SF offers some amount, I believe $5k as I used them for many years. While new to the jewelry game, I've had additional policies for all my guns.

For you to get multi line, you need another vehicle or possibly a life insurance policy. For $1,200+ per year you can probably find a solution.

FWIW, I have JM for my wife's ring now. Currently using USAA for my vehicle & home insurance needs.

Others have also reported good results with Chubb. I've used commercial lines of insurance with them but not personal.

Alas, if you are current or ex-military you qualify for USAA insurance who's rates are pretty competitive. If active, they should cover your vehicle that is abroad as well.

Adding that I would probably not do USAA for jewelry insurance - afaik from speaking with them on the phone about it several times, THEY replace the item with their jewelers, you don't get to pick the jeweler - so if you have something like a branded item, a carefully-selected diamond, a custom setting from a preferred vendor, or a colored stone that you'd be picky about replacing, YOU would not be in control of selecting the replacement with a partner jeweler. And if they cash out, it is at their wholesale value, which from threads posted here seems very low. I've seen significantly better resolutions in the event of loss from JM on these boards than I have from USAA. I have fortunately never had a loss but I read all the insurance threads avidly to see if I'm still insured with the best company.

With that said, ime, USAA is absolutely the best for car and home insurance.
 

Karl_K

Ideal_Rock
Trade
Joined
Aug 4, 2008
Messages
8,711
#1 reason, a claims representative who understands jewellery if you ever have a claim.
 

Niel

Super_Ideal_Rock
Premium
Joined
Jul 23, 2012
Messages
18,708
You are insuring less and they are charging more? And the insurance industry wonders why people think it is all a massive scam... :rolleyes:


As above - all insurance is not equal.

Will it pay cash out?
Will you be forced to use their 'recommended' jeweller? (i.e. the one that minimises their payout)
Will any generic GIA stone picked off a list be what you are required to accept?
Will you be able to specify 'a CBI/WF/BGD top-cut stone that is eye-clean, to the value of $x'?
Will it be New for Old or will they assume the asset is depreciating in value over time?
Is it All Risks, Worldwide insurance?
Ok I quoted this because it’s no scam. The OP is (most certainly) getting a multi policy discount / home and auto discount from State Farm. Losing your auto you’ve lost that discount. It’s an appealing discount you had for the length you had the multiple policies. Not a scam.
reason I would not put it on my homeowners.
Either you have special limits of insurance that will only pay x amount on jewelry and it won’t pay enough or
Your company lets you put a rider- cool but then
How does it pay out ? ACV ? Do they cover mysterious disappearance?
How many losses do you currently have on your homeowners ? If you have one more are you at risk of being nonrenewed?
Do you want your whole homeowners to go up when you file the claim on the ring?
Also what kind of expertise does the claims department have in this subject?
 

TODiamonds

Shiny_Rock
Joined
Jul 27, 2019
Messages
260
My fiance insured her ring with JM this year because wearing an engagement ring (especially one with a relatively large stone that's mounted high) is a new feeling for her (she never wore rings before) and she wanted the security. Nothing wrong with JM, our experience was effortless, but I can tell you after this year we're ditching the insurance. Just have your jewelry inspected periodically and prongs retipped.

By definition, over the long run you are worse off with insurance (otherwise it wouldn't exist!)
 

OoohShiny

Ideal_Rock
Premium
Joined
Apr 25, 2014
Messages
6,669
I always think that insurance is one of those things that is annoyingly expensive right up until the point that you actually need it, when it then seems very cheap... lol
 

TODiamonds

Shiny_Rock
Joined
Jul 27, 2019
Messages
260
I always think that insurance is one of those things that is annoyingly expensive right up until the point that you actually need it, when it then seems very cheap... lol
People struggle to wrap their heads around the notion that by not buying insurance, and saving your money, you are actually self insuring.

Net-net, over the long run, the money that you save from paying the annual premiums, reinvested and compounded, will be higher than the probability weighted event that you will have to make a claim.

Buffet built his fortune on the insurance industry... hence it must be very lucrative :)
 

OoohShiny

Ideal_Rock
Premium
Joined
Apr 25, 2014
Messages
6,669
People struggle to wrap their heads around the notion that by not buying insurance, and saving your money, you are actually self insuring.

Net-net, over the long run, the money that you save from paying the annual premiums, reinvested and compounded, will be higher than the probability weighted event that you will have to make a claim.

Buffet built his fortune on the insurance industry... hence it must be very lucrative :)
No disagreement from me on the last point! lol

I think it depends on your financial circumstances and your assets - if you're rocking a $50k ring and it costs $1k a year to insure, 50 years is a long time 'at risk' (i.e. not covered by insurance if you are effectively self-insuring, and therefore needing to 'forward fund' if you lose it, say, halfway through that period).

I know @kenny feels the same way and doesn't insure his property or possessions (IIRC) - but I think most people would struggle with the concept of having no cover!
 

sledge

Ideal_Rock
Premium
Joined
Apr 23, 2018
Messages
4,077
Adding that I would probably not do USAA for jewelry insurance - afaik from speaking with them on the phone about it several times, THEY replace the item with their jewelers, you don't get to pick the jeweler - so if you have something like a branded item, a carefully-selected diamond, a custom setting from a preferred vendor, or a colored stone that you'd be picky about replacing, YOU would not be in control of selecting the replacement with a partner jeweler. And if they cash out, it is at their wholesale value, which from threads posted here seems very low. I've seen significantly better resolutions in the event of loss from JM on these boards than I have from USAA. I have fortunately never had a loss but I read all the insurance threads avidly to see if I'm still insured with the best company.

With that said, ime, USAA is absolutely the best for car and home insurance.
I've had both SF and USAA for home & auto, and both are good companies IMO.

I'm not sure how either process a jewelry claim as prior to my wife's ring (who we insure w/ JM) I never had enough jewelry to worry about the built-in limits including with their homeowner & renter's policies. I did extend my limits for firearms with them, but have not had any claims.

With my wife's ring policy at JM, it's small dollars overall and for me, it makes no sense to have wrapped up with our home & auto policies, where filing a claim could potentially hike our other rates.

FWIW, when at SF, I did experience a minor loss on my homeowner's policy. The place I lived at the time had frequent brown & black outs and fried a bunch of electronics -- washer, fridge, TV's, audio receivers, Xbox, DVD players, etc. It was pretty simple. I submitted a claim with some details they requested and they sent me a check for replacement value. Cash value is less than replacement value. As you buy stuff, you can submit receipts and get more cash to finish replacing your stuff. If you choose not to replace anything, you just cash the check they sent.


I always think that insurance is one of those things that is annoyingly expensive right up until the point that you actually need it, when it then seems very cheap... lol
LOL, the way it always goes.


People struggle to wrap their heads around the notion that by not buying insurance, and saving your money, you are actually self insuring.

Net-net, over the long run, the money that you save from paying the annual premiums, reinvested and compounded, will be higher than the probability weighted event that you will have to make a claim.

Buffet built his fortune on the insurance industry... hence it must be very lucrative :)
Self-insuring depends on many factors. I do this on some items.

And it drives my wife nuts that I don't buy extended warranties, which to me is just like paying for optional insurance. My philosophy is simple -- there is a really smart nerd called a statistician that told the warranty company they can make a boat load of money if they have X clients and charge Y dollars because overall risk is minimal for the amount of revenue collected.

On the flip side of this argument is practicability. In the case of my wife's ring, the policy is a few hundred bucks per year. A new ring would run me about $10k all in. Without interest, it'd take me almost 42 years to break even on a $10k loss at $20/mo.

If I were to get 5% interest, compounding monthly, then I could reduce my payback period to 22.75 years. Much better than 42 years, but IMO, still too long of a payback period to make this option truly feasible.

In this case, the risk of self-insuring doesn't make sense as the ROI isn't great enough to offset the risk and likelihood of experiencing a claim within almost 23 years. And then I'd just break even, assuming cost of living remained static. It would get worse if you factor in COL adjustments.

This isn't to say there aren't scenarios where self-insuring makes sense. But honestly, you have to do the math, look at your available cash flow and determine if you are willing to utilize your cash flow in the event you do need to self-insure.

For me and my situation, jewelry insurance is a no brainer. But then again if I have $50k in cash to buy a new vehicle but the dealer offers me 4-5 years of financing at 0% interest, guess which I will take? I will absolutely use THEIR money for free. Then invest my $50k and draw interest. My point being, any investment has to also consider the loss of opportunity cost to be fully analyzed.

CaptureInterest.PNG
 

Rose-gold-or-bust

Shiny_Rock
Joined
Aug 7, 2019
Messages
310
My fiance insured her ring with JM this year because wearing an engagement ring (especially one with a relatively large stone that's mounted high) is a new feeling for her (she never wore rings before) and she wanted the security. Nothing wrong with JM, our experience was effortless, but I can tell you after this year we're ditching the insurance. Just have your jewelry inspected periodically and prongs retipped.

By definition, over the long run you are worse off with insurance (otherwise it wouldn't exist!)
Inspections won’t prevent it from getting stolen. If she wears it all the time, she may still get mugged. If it is ever taken off, it can get stolen, lost etc.

Self insuring is only effective if you have the discipline to actually save that money and you actually have it saved when you need it most.
 

sledge

Ideal_Rock
Premium
Joined
Apr 23, 2018
Messages
4,077
Self insuring is only effective if you have the discipline to actually save that money and you actually have it saved when you need it most.
Another great point. Rather self-insuring, or investing, one simple method to help overcome this is to setup an auto draft from your checking/savings account so that it "automatically" happens.

When I think about this, I always think about taxes. Many people enjoy getting a large tax refund. I am one of those that do NOT enjoy this. To me, that means I overpaid the government and I am at their mercy to get my money back and then invest/spend it as I see fit. Consequently, over the years I work hard to strike a ZERO balance as I prefer to be in control of MY money as opposed to the government.

For me, what this normally means is I get maybe $1,000 federal tax return, and usually pay some money into the state. Some years I may yield a few hundred bucks in my pocket. Other years, I may need to write a check for a $1,000 or less dollars. I'm never happy to write the check, but I love knowing I had my money to do with as I wished throughout the year. And as the sugar on top, I always wait until 4/15 to mail that check back, lol.

I'm not quite as bad as my uncle, who would wait until the late evening of 4/15 to drop his check. If you aren't aware, lots of people do this and there can sometimes be lines at the post office of other people doing the same thing, depending where you live, etc.
 
Be a part of the community It's free, join today!

Need Something Special?

Get a quote from multiple trusted and vetted jewelers.

Holloway Cut Advisor



Diamond Eye Candy

Click to view full-size image.

New posts

Top