With various definitions and interpretations of value, insuring jewellery can be complex without the knowledge of a Broker to ensure your item is properly insured to value.
A Broker partner of Unica—Frank Cain, Commercial Insurance Manager at Michael Palermo & Associates Insurance Limited—recently shared an experience he encountered with one of his clients:
“A client lost a $6,000 bracelet and ultimately had the item replaced. When she found out from the adjuster that the cost to replace was $3,000, she went through the roof! I reminded her that her policy was based on replacement cost, indicating that the amount of insurance on the schedule was irrelevant. To make matters worse, her jewellery schedule was in the amount of $125,000—relatively new. I suggested that she have all items re-appraised for replacement cost or on an agreed value basis with another jeweller. When all was said and done, the schedule value was reduced to $55,000. The jeweler involved in her initial appraisals was a very well-known local jeweller who, as it turned out, lost a valuable client.
It is far too easy for a jeweller of little accreditation to prepare an appraisal based on a higher value than the actual price paid for the item to give the impression to the customer that they got a deal.
And the ploy of suggesting that the higher value is no doubt what the jeweler down the street would charge for the same item is added to complete the fiction.”
The two values of personal jewellery items
Frank broke down what he considers to be the two main values when working with a client on the value of their jewellery:
- Replacement Cost/Agreed Value—When replacement is impossible, this is the value that is agreed upon between the insured and the insurer–not the insured and the jeweller!
- ‘One of a kind’ items—These are usually ‘hand me downs’ whose value is based on emotion and sentimentality, two things that cannot be covered by an insurance policy. These items should be kept in a safety deposit box for safe keeping.
What makes jewellery special is often unique to the owner of it. Whether it’s a necklace gifted by a loved one on a special occasion or a pair of earrings you’ve purchased for yourself, proper coverage can provide the protection these priceless valuables deserve. Learn more about Unica’s jewellery coverage.
