As highlighted in the previous post, most contents Insurance policies only cover jewellery claims for limited amounts and only provide cover for items lost in the home. What to do if you want jewellery insured for full replacement, or if you want jewellery covered when you are away from home? You need specified or portable jewellery insurance.
Most insurers have different policies with different limits and conditions and therefore this information is general in nature. You should always confirm your exact policy coverage with your insurance company.
Specified jewellery insurance allows you to insure the replacement value of your jewellery. Therefore if you have a $5,000 ring and your contents policy has a per item limit for jewellery claims of $1,000 then that is the maximum approval amount you will receive under your contents policy. A specified policy will cover you for the replacement of the $5,000 ring, but there are a number of general conditions you need to be aware of.
The first step is to get a quote for the premium on the item or items you want to insure. Make sure you shop around as some premiums are very high. You may also find that general insurers may not offer specified jewellery policies unless you also have a contents policy with them. You can however get quotes from specialist jewellery insurers who in most cases are the most competitive because this is what they specialize in.
To get specified insurance, you will need a current valuation on the jewellery you want to insure. This sounds simple, but unfortunately it is not. Most jewellery stores will offer valuations through contractors. This means you have to leave your jewellery at the store and in some cases for a number of weeks. When the valuations are completed, you can be charged well over $100 per item for the valuation. The valuation you have will no linger be current as soon as cost prices increase for gems, labour, gold or exchange rates and therefore you will be advised to have your valuations updated regularly, with the same time delays and expensive costs.
The valuation you receive may or may not be complete in terms of the information it has. For example, does it have a full record of all gem shapes, sizes, weights, colours and clarities. The setting types, the manufacturing type, the metal type, weight and purity. Without this information, your claim cannot be accurately assessed when you make a claim with your insurer and guesses will be applied to the missing information, usually to your disadvantage.
To eliminate the long time, high cost and incomplete detail that are the hallmarks of most valuations, you can have your jewellery valued through Jewelscan at www.jewelscan.com.au This is a one time only process that is done on the spot, at a one time low cost. Your jewellery record is revalued every month to ensure the value is always current and you will never need another valuation.
Now you have your insurance quote and your valuation in hand and are ready to take out insurance with your chosen insurance company. You are potentially still facing problems that will only come to light when you make a claim.
Most general insurance company specified jewellery policies will provide cover outside of the home, but exactly where and for how long? It is imperative that you understand the full details of the cover. Do not wait until you need to make a claim to discover if your policy is going to give you the cover you need.
You have made a claim and now your general insurer may refer your jewellery valuation to a claim validation service (most do). The claim validator will use the relevant information from your valuation and use a guess to work out what any missing information may be. They will then get quotes from the insurers preferred supply panel of jewellery, most of whom you have never heard of, and these replacement quotes determine the value of your claim.
Your problem now is your claim value is what it will cost the insurance company to replace the item, not what the value is that you paid the premium on. Therefore you may have insured your $5,000 ring under a $5,000 premium calculation and the preferred supply will claim they can replace the ring for $2,200. You are then told your claim is approved from the jeweller you have never previously heard about and you cannot use your jeweller who you purchased the ring from.
If you contest this and say you do not want to use the insurers jeweller, you will then find out that they have quoted only $2,200 to replace your $5,000 insured ring and if you do not use their jewellery, you might be cash settled for only $2,200 because that is what they can replace it for through their jeweller. Now you are thinking, why have I been paying a premium on a $5,000 ring if my settlement is going to be $2,200? Very good question.
Insurance companies know very little about jewellery and what makes up the retail value. Therefore they rely on validation services and preferred suppliers to handle this for them. What happens however if the preferred supplier they want to use is going to undersupply the value of your claim and this is why they quoted so low on your replacement? This does happen at times and unfortunately neither your insurer nor you will know if you have been undersupplied.
So, how can you escape these pitfalls and ensure you have appropriate cover and no stress when you make a claim? The first step is to make sure you get quotes from specialist jewellery insurers as well as your current contents insurer. Then make sure you have a valuation includes all description and value related information. Make sure your policy covers you anywhere, at any time, for loss, theft or damage. Makes sure that you can return to your jeweller when you make a claim and make sure your insurance is for the full replacement amount from your jeweller, not some jeweller you have never heard of.
Through our network of over 500 independent jewellers around Australia, we have seen countless cases with the problems explained above. The most common issue is the policyholder not understanding the terms and conditions of their policy and therefore suffering when they have a claim. Jewelsure is a specialist jewellery insurer through QBE Insurance and is happy to provide you with any information you may need so you can make an informed decision.