Ask Your Insurance Agent:

Insurance claims are dealt with in widely different ways: some companies will replace a lost or stolen item in like kind, some with the piece’s stated monetary value, some will pay up to the original cost,  or deduct a discount from the monetary value, or try to negotiate a settlement, and so on. The insurance company’s actual cost of replacement may be considerably lower than the retail replacement value stated in the appraisal, which could result in a cash settlement that is below the stated value .   You may think you are adequately covered, when if fact, the $ 2500.00 or $ 5000.00 your policy will pay out won’t buy you another three-carat diamond solitaire.    On the other hand, your policy might include provisions for inflation, and/or  rising diamond or gold prices, and will replace “like with like” regardless of the cost. 

 Do you know how your coverage works?  Most of us never think to ask.   Did the agent who sold you your homeowners’ policy mention what his company could do for  your engagement ring, your Rolex, your diamond bracelet?  This specific type of coverage is commonly called a rider or floater.  Agents are much savvier than when I first began appraising, but I still find  those  who will tell you  -   in awfully scary detail -  the  ins and outs  of  tornado  damage,  flood damage, termite damage, locust damage, liability for accidents on your property, grand theft auto, boat leaks and  attack by renegade plumbers.  With all this to keep track of  it’s  no wonder:  they  may be completely unfamiliar with the jewelry market and with their company’s actual replacement procedure.  Your agent may not know if an appraisal is needed , why it is needed, or what a usable appraisal must comprise. 

The “retail replacement value” I state on the bottom line of an appraisal is a carefully researched and calculated mathematical sum by which your premiums can be determined.   In the real world of the jewelry market that number can and will change with  fluctuations, usually in an upward direction !  We can't re-appraise jewelry each and every day as platinum and gem prices rise and fall.  We can't predict the future (though crystal balls remain popular, at least in some parts).  Therefore,  the most important part of an insurance appraisal is the accurate, thorough descriptions of the appraised items because insurance companies insure the jewelry items, not their necessarily their monetary value.   You must find out how your insurance will replace that item in like kind. 

The most important part of an insurance policy is that you understand it and it is right for you. 

It is up to you to understand your coverage.  Insurance broker Tally Osburn tells me "The key word is automatic; does my insurance floater contain an automatic inflation guard?" 
Remember: Diamonds, gems, precious metals and labor are costly commodities and their values fluctuate - usually rising - from forces in addition to inflation.   So, to protect yourself,  question your agent carefully.

1.  Is an appraisal for full coverage?

2.  What is the difference between scheduled coverage and

        unscheduled coverage?

3. Is there a deductible? If so, how much? Do I have the option to

        increase the deductible and thus lower my premium?         

4.  Is my policy all-risk (par loss, damage, disappearance)?

5.  Am I still covered if there is negligence or carelessness involved?

6.  Is the item covered if lost, stolen or damaged while in the possession

        of others?

7.  If there is a loss, do I have a choice of a full cash-out or will I have

        to accept less?

8.  Can I go to whomever I wish for replacement?

9.  If a loss has been replaced through the insurance company source,

        will I be allowed to verify proper replacement by an independent firm

        or accredited appraiser?

 10. Are there geographical limitations to coverage?

 11. How much will it cost per thousand for full coverage?

 13. Is depreciation ever imposed (to what and how is it computed)?

 14. Am I limited to the appraised replacement cost should there be a

        sizable increase in value?

 15. If there is damage to a piece, can I replace it or will I be

        limited to repair?

 16. What if the lost is irreplaceable, like an antique?

 17. Are there any security precautions required, if not, would there

         be a premium savings if special precautions were taken, i.e. the

         items were kept in a home safe or in a bank vault when not worn? 

18. What proof is needed to justify a claim?

19. Are there different kinds of jewelry insurance?

20. Are there any exclusions?

21. What is the pair and set clause? Will the insurance cover an additional

        amount for matching a missing item in a set if it has not been computed

        or stated?

22. What types of property are covered?

23. Will you show me the actual language in the policy which addresses each

        concern I have mentioned?