FAMILY JEWELRY PROTECTED?--
by John A. Christensen, G.G., N.J.A., Copyright © 1998, All
I have experienced
a lot of confusion, and misconception, about how well personal jewelry
items are covered under renter's and home owners insurance. When
insuring these items, there are some very important considerations
to take into account. Not every piece needs to have a formal appraisal,
but there are as many different policy limitations and variations
as there are rings. I am not your insurance agent, and only your
agent will know the limitations of your policy. Agents are generally
very good about explaining coverage in detail, if you ask the right
questions. I will attempt to give you some information in this article
that will help you feel more at ease with your coverage.
value assigned to a piece of personal property is generally the
value that will replace the article in the regional geographical
area that you live in. For custom or handmade pieces, the value
would be what it would cost to be made at an establishment where
a goldsmith/silversmith hand crafts the piece. Prices for these
services can vary a great deal.
an example of retail market value: If you buy a piece listed in
a mail order or department store catalog for $600.00, it's available
at that price through the catalog all year for this price, often
there is a "compare at $900.00" line at the end. The replacement
value of that Item is $600.00, not the higher price. This can be
bought at this price any time. Sometimes, if the insurance company
has a dialogue with a store, you may be able to get an even better
price. Having an arrangement between a store and insurance company
helps to lower costs for insurance rates. You should encourage the
insurance company to help you find a replacement if you have a loss,
it will help all consumers in the long run.
price of a piece is not double the purchase price. This was an industry
practice for quite some time. It was used by uninformed jewelers
to make sure that you were covered (at your expense in insurance
premiums), and possibly to make you feel better about your purchase.
Unless you bought your piece at a truly discounted price, this would
not be accurate, and I would encourage another opinion. Even buying
pieces at 40-60% off doesn't always mean good value, and you shouldn't
rely on the full price to calculate insurance coverage. I once repaired
a bracelet that was purchased at 50% off, and my everyday asking
price was nearly half of the "per gram" price that they paid, and
the regional average was fully 40% less than what they paid. Don't
be fooled by the sale prices, and don't pay more than $28-30 (the
average) per gram. If they won't, or can't, tell you the price per
gram, don't buy it.
designer piece, often has a higher appraisal value than the purchase
price, because of the nature of the piece, and the market fluctuation
associated with designer names with respect to collectors. A good
appraiser will do the research & account for these fluctuations
in stating a replacement value. In some cases, there IS no replacement
of such a piece, and you may have to accept a cash settlement.
vs. Blanket coverage---
good examples of why you should schedule jewelry with your provider
are the experiences of a couple customers of mine. One had a necklace
with a diamond pendant that was only covered under the blanket policy.
This is usually a stated maximum of $1200.00 to $1500.00, and the
deductible usually applies (again, talk to your agent). She had
a $500 deductible policy. One day, while loading groceries into
her car, she caught her chain on the bag, and continued home without
checking. When she got home, she noticed her chain hanging around
her neck, broken, with no pendant. She returned to the store parking
lot to find her pendant, run over, diamond out of the mounting but
not damaged. The pendant was destroyed beyond repair. Because the
item wasn't lost or stolen, there was no coverage. Even if it had
been stolen, the insurance would only cover up to the maximum allowed
LESS the deductible. If the Diamond was worth $2000 by itself, she
would have only gotten $700 to $1000 for this claim.
customer had 7 rings, each valued at an average of $600. Her apartment
was broken into, and everything but the ring she was wearing was
taken. With a limit of $1200, and a $250 deductible, she had a net
loss of $2650.00 that wasn't covered by insurance. Her thinking
all along was that she didn't have anything over $600, and her insurance
covered her for $1200. Again, check with your agent for your individual
policy limits. In most cases, if you have your jewelry scheduled,
it's going to be covered up to it's full stated value with no deducible.
should be detailed enough for a qualified jeweler to know exactly
what is needed to replace the item. This includes estimated or actual
weight of the stones, color and clarity, actual measured dimensions
of the stones and the piece, type and fineness of metals used, overall
weight of the piece, any finish or texture that identifies it, and
any marks or stamps. You should always have a picture of the piece,
either by the appraiser, or by you, that is a close enough view
to note details of the piece. A view of the whole family from across
the room with you and your 5 mm pendant is not enough. I digitize
a close-up, and print it in color on the document, as well as keeping
the picture file on computer disk in case the need arises.
the qualifications of the person that signed the document. Do they
have any degrees? Are they associated with any professional organizations?
Have they completed a GIA course (Gemological Institute of America),
such as the Diamonds course? They would then have "recipient of
the Diamonds Certificate, (GIA)" after the name. Having taken Diamonds,
Diamond Grading, and the appropriate extension course, they may
be a "Diamonds Graduate, (GIA)". Gemologist, and Graduate Gemologist
(G.G.) degrees encompass all areas of diamonds and colored gemstones,
with the Graduate being the equivalent of a Masters degree in the
field. Organizations such as A.G.S. (American Gem Society) also
hold their members accountable, and require proper education. Has
the appraiser personally signed the document? Don't settle for a
rubber stamped signature or initials. Make the appraiser accountable
for his work. If you get a department store appraisal, make sure
that the person signing that appraisal was not sacking groceries
3 weeks before putting a value on your family heirloom.
Ask if the
jewelry will be leaving the premises. Your neighborhood jeweler
has long been recognized as the best one to do business with, and
most of the time, the qualified person is in-house. Be prepared
to leave your jewelry. Quality work takes time, and the best job
will include a complete clean and high polish. On the spot appraisals
rarely have enough research to be accurate or complete.
up to date?----
general rule of thumb is that you should have your appraisals evaluated
every 4 years to make sure you are covered at current market prices.
The price of gold fluctuates every day. The price of diamonds over
1 ct. has increased from 20 to 30% in the last 3 years! People with
diamonds in this size class should dig out your appraisal right
now & get an opinion. I replaced a broken stone that was .75
ct. (3/4) recently. This customer had an appraisal from 1983, and
was nearly $1000 short on the market value stated in his policy.
He was lucky enough that the gold in the ring was worth enough,
at the time of appraisal, that it allowed for some of the difference
to be cancelled out. Don't take the chance that the value hasn't
gone up, or that your appraisal may not have been done by a qualified
closing, review key points of your insurance policy with your agent
to see what the limitations are. Go over everything you have, no
matter how trivial you think it is, and asses the need for documentation.
In some cases, it isn't warranted, and that may be your call.
everything in the jewelry business. The most important thing is
to work with a jeweler you have confidence in, and can return to.
The media has had a field day, at times, zeroing in on some bad
apples. Please don't assume your jeweler is going to switch stones.
As a rule, it is a very trustworthy profession, and no jeweler likes
another to be dishonest. It gives the whole industry a bad name,
and it's the last thing any of us want to happen. Please don't ask
your jeweler if they are going to switch stones on you. Again, go
to someone you can trust. If you don't know anyone, ask your friends
who they deal with, and who they feel is trustworthy.
Christensen, G.G., had been in the jewelry trade in the Des Moines,
IA area for 19 years. Now in the Chicago area.