What questions should I ask my Insurance agent when insuring my jewelry?

What questions should I ask my Insurance agent when insuring my jewelry?

Posted by Joseph Sanseverino M.S. D.G. on 3rd Aug 2016

We have helped many clients who have suffered a through a loss, theft or damage of their Jewelry.  It is our experience that many clients, prior to a loss, were under the impression that the insurance company would reimburse them for the amount the jewelry was insured. This is not typically the case. Clients may be offered a like-kind piece, a new replacement from the Insurance Company’s in-house inventory or may be made a cash offer.  Typically the cash offer will be significantly less than the appraisals stated “Replacement Value”. While replacement jewelry being supplied by your insurance Company is quite common it can be problematic if the item lost was a custom handmade piece of jewelry. What is important is to understand how your items will be valued in the event of a loss and have the proper expectation of how the reimbursement is to be made, prior to a loss.

While this is not an all-inclusive list here are some good questions to get a conversation started with your agent:

  • In the event of a loss how will the ring be replaced? Will it be a new identical piece of jewelry or a like-kind piece of jewelry or a check for the stated reimbursement amount.
  • In the event of a loss who will replace the ring? A personal jeweler of my choice, a jeweler selected by the Insurance Co. or will a new piece be supplied by the Insurance Company’s in-house jewelry store.
  • What is my coverage if my jewelry is damaged? An example question is what if my engagement ring center diamond ring is chipped?

The purpose of this FAQ is to prompt a conversation between you (a jewelry owner) and your insurance agent before a loss. Your agent can only help before an event occurs, so take the time to seek out an insurance professional who can help you assess the correct level of coverage and understand how events will unfold in the event of a loss. 

Most insurance companies will require some documentation to provide a detailed description of the items being insured, providing a replacement value for the item to be insured.  Our Gemological Institute of America Graduate Gemologists will grade your jewelry to exacting standards and provide these documents to help you and your agent determine a proper valuation of your jewelry.      

Q: What is the purpose of the Appraisal?

A: The document we provide is geared for purposes of insuring the item being appraised. The item will be described in detail, the elements of the item, it being measured, weighed and photographed and an insurance replacement value stated. This is so that an insurance company has a basis for understanding what it is you are insuring and the retail value.

Q: What is the difference between Insurance Value and Retail Value?

A: Basically the same for the intend purpose of this writing. Retail value is what one would expect to pay for a new item from an authorized dealer. To replace the item insurance companies require that a piece be insured for retail value.

Q: What is the difference between Market Value and Retail Value?

A: Market Value could be defined as the going rate for an item on a secondary market, such as auctions or ebay. Retail value is what one would expect to pay for a new item from an authorized dealer.

Q: Should I bring my prior appraisal with me when having jewelry appraised?

A: Yes. We will use the prior appraisal as a guideline however your jewelry will be measured and industry accepted formulas used to arrive at Carat weight to verify the original data.

Q: Should I bring my diamond report/certificate with me when having jewelry appraised?

A: Yes (please bring a copy or we can make a copy for you). We recommend that you always retain your original diamond report. We will check the measurements against the diamond report to verify accuracy. We will note on your appraisal the type of diamond report, diamond report number and if the gemstone is inscribed.

Q: If I am getting an appraisal update do I need to bring my jewelry in?

A: Yes. As part of the appraisal process we must physically inspect the item being appraised.

Q: How long does an appraisal take?

A: We strive to have wedding sets back to the client in 24-48 hours. Other jewelry items we typically complete in one week or less.

Q: Is an appraisal useful if I wish to sell my own jewelry?

A: Perhaps. The appraisal will state the Retail Replacement value. While an appraisal will describe the piece itself and assign a retail value, a buyer on the secondary market may have a different approach to determining how much they will pay for an item.

Q: When insuring an item is it an advantage to have a high value stated on the appraisal?

A: No. Insurance Premiums are typically based on the Replacement value. The higher this number the higher the premium which will be charged. We will assign a fair retail price based on current market trends

Q: How often should I have my appraisal updated?

A: Every 3-5 years is a general rule of thumb however keep in mind price fluctuations in gold and gemstones do impact the retail price of jewelry.  

If you have any questions, comments or suggestions on how to improve this article or information contained within please email at joseph@aztowne.com.  Thank you.