I’ve seen it time and time again. Customers come to have estimates or appraisals done for their lost, stolen, or damaged jewelry. They ask if the appraisal can be done without seeing the jewelry or if it can be done based on their recollection of what it used to look like.
Unfortunately insurance companies will not accept this form of evaluation or appraisal, and certainly not after the fact. In the following article I will explain what to do in order to properly appraise and insure your jewelry.
Creditable Appraisals
Insurance companies require that your jewelry policy be based on official and creditable appraisals done by a reputable jeweler. Jewelers that have studied or have been train by the Gemological Institute of America (GIA) will provide the most acceptable appraisals.
Being trained by GIA ensures a conservative grading analysis and a correct evaluation of the jewelry’s worth. Most insurance companies do not require that you have your jewelry appraised by GIA graduates however; it’s always better to have one done by someone with these credentials.
Your appraisal should include the information regarding the precious metal content including it’s weight, karat purity, and color. The diamonds and gemstones should be described in terms of shape, carat weight, color, clarity, and cut grade.
If the diamonds are pre-certified by a grading laboratory then you should give a copy of the certification to the appraiser and ask them to list this information on the appraisal. If possible have the appraiser photograph the items and attach this photograph to the appraisal when submitting to the insurance company. Always keep a copy in a safe deposit box or in a fire proof safe.
Jewelry appraisals should be reassessed every 7-10 years to determine if the value of the items has appreciated. Jewelry is a commodity and like all commodities they are subject to fluctuations in value.
In recent years the value of certain diamonds have actually doubled in price because of shortages in the marketplace for high demand shapes and sizes. A loss after such a gain in value without proper reassessments will result in gaps in your jewelry coverage when trying to replace the item.
Choosing the Proper Insurance Coverage
The biggest mistake consumers’ make is assuming that their homeowners insurance will cover them in the event of a loss. This could be further from the truth. The typical home insurance only allows $1500 – $5000 for personal articles and with that is a deductible of $500 – $1500. Along with that is the fact that some homeowners’ insurance policies do not allow for loss of the item, damage, or diamond loss from the setting.
The best way to insure your jewelry is to get a personal articles policy written by your agent. This policy should include loss of the item, theft of item, damage, and loss of gemstones & diamonds. Ask your insurance agent to quote the policy with no deductible and with the above coverage.
The going rate for jewelry insurance is $1.50 – $1.85 per hundred and if you’re quote higher then your probably paying too much. To calculate the annual premium take the appraised value of the jewelry and multiply is by the rate and then divide it by 100. Example (appraised value $10,000 X $1.50 = $15,000 Divide by 100 = $150 per year).
Some local insurance agents aren’t familiar with jewelry insurance policies and you may feel like you’re not getting the proper assistance. There are a couple of jewelry insurance companies that provide superior service and if your agent fails to give you proper assistance I recommend you give them a call.
The two I like most are CHUBB Insurance and Jewelers Mutual. These companies specialize in personal articles policies and generally have the lowest rates with the best coverage.
Insurance is one of those things that you have to think about until you really need it. I will say though that a jewelry insurance policy makes a lot of sense. Let say you have a wedding set worth $5000 that you wear every day. How often do walk around with $5000 cash in your pocket? Almost never right?
Well in some cases you walk around with the jewelry equivalent all the time. If you have valuable jewelry that you wear everyday then you are certainly increasing your chances of having an unfortunate loss. Jewelry valued at $5000 can cost as little as $75 per year to insure. It’s worth every penny to give you the peace of mind to wear it with pride and without worry.
