Jewelry insurance coverage can be extremely important to our customers, simply ask someone who has had a recent loss. What is amazing to me, however, is how few people actually purchase that important protection for their valuables. Many people believe that they are covered by their homeowner’s policy, but in most cases that is simply not true. Even if you would rather not read the fine print in your policy, please at least take the time to ask your agent. Don’t wait until you are missing the center diamond in your wedding set before you get the facts.
Most homeowner policies will cover jewelry only if it is stolen, and only up to a certain amount. My own policy covers up to a maximum of $1,500, sadly not very much protection at today’s prices. In addition, the vast majority of losses that I see are a direct result of the lack of the basic maintenance needs of your jewelry rather than by theft. All metal wears over time, and if you ignore a set of prongs long enough your diamond will likely be lost. “So what should I do?” you ask. This is what I suggest to all my customers:
- Talk to your agent, and ask about any coverage you currently may have. Ask him or her what type of documents you would need in order to file a claim. If you are comfortable with the answers you received, then stop right here. If you feel you want more coverage than you have right now, then proceed to the next item.
- Gather your jewelry together, maybe at the kitchen table, and separate all the items into two groups; the first being the items you could “afford” to lose, and the second being the items you want protected in case of a loss. It will be tempting to insure everything, however lower-priced items are not cost-effective to insure and most people would not file a claim for a $50 earring if one comes up missing. Remember that your rates are based on the frequency of your claims, and a $50 claim and another for $10,000 may be considered in exactly the same manor.
- Take the jewelry you selected to a knowledgeable jeweler and request an Insurance Replacement Document. You will receive a detailed description of each item, including the materials and components that are used in manufacturing your pieces, usually including photos of each piece, that is necessary to insure accurate replacement should a loss occur. The process is lengthy and somewhat expensive depending on the number of items you wish to insure, however please keep one fact in mind during this process. You, and only you, will benefit from a good appraisal if a loss does occur! I should also add that an Insurance Replacement Document is just one part of the after-purchase services you should expect to receive from where you spent your hard-earned dollars. I never charge for any item purchased at Jon Michael’s.
- Finally, take the completed document to your insurance agent and request a multi-peril rider that covers your jewelry completely. Included in every Replacement Document I produce is a list of twenty-three questions you should ask your agent. Most people do not like surprises, so it is best that you know beforehand what to expect in case a loss occurs. If you had your appraisal work done elsewhere and would like a copy of my questions, simply give me a call of an email with your address and I will mail you a copy.
One final area I want to cover briefly before I close this column is one of the problems you will likely face when having a jewelry item replaced by the insurance company, and that is you will probably be pressured into using a “jewelry replacement service”. Most of my customers agree that purchasing jewelry is based on trust, and likewise any replacement of a lost item should be handled by a jeweler that you trust, regardless of who that happens to be. Because the insurance adjusters spend much of their time replacing jewelry items, they develop a relationship with these replacement services, which in reality is nothing more than a diamond salesman working out of the trunk of his car. He has little or no overhead, and therefore can usually offer replacement prices below that of a storeowner. Once he delivers the new ring, you will likely never see him again. No follow-up service, no warranties, just a cloud of dust as he leaves your driveway. Your insurance company pays less, but you receive absolutely no break on your premiums, and you certainly received less all the way around. Always remember that you are the one that pays those premiums, you are the customer, and if you are not happy after resolving the loss, your insurance business can be moved to another company. Never let an adjuster bully you and you won’t be unhappy later.
My next column will be on gold buying so be sure and visit this website in August.
