Happy New Year everyone! The beginning of a new year is an ideal time for a financial review. An important part of that review can be to determine if your jewelry is properly insured. The wrong time to find out it wasn’t is after a loss has occurred. Gemcorp Fine Jewelry Appraisal Service is the Southeast’s premier independent appraiser of gems and jewelry and is ready to assist in any way we can. In the meantime, here are some good things to be aware of when it comes to insuring your fine jewelry.
The Limits of Homeowner’s Insurance
Most homeowner’s policies cover jewelry to a minimal extent, most often no more than $5,000 per occurrence and then only for “named perils”; typically theft from the home, fire, etc. Your jewelry is usually not covered by your homeowner’s policy outside the home unless it has been “scheduled” (also called a personal articles floater) and an additional premium has been paid. Insurance companies require either the bill of sale (if it is a recent purchase) or a current appraisal by a qualified appraiser. Gemcorp meets and often exceeds all the appraisal requirements insurance companies demand.
Here is some basic information that you should be aware of when considering coverage for your jewelry. Your insurance policy for scheduled jewelry “indemnifies” you if your jewelry is lost, damaged or destroyed. The term “indemnify” means making you, the policyholder, “whole” in the event of loss, either with the same or similar product or the amount in cash . As with all things, the devil is in the details. There are two types of scheduled jewelry replacement insurance: one is Replacement Value insurance, (also referred to as Actual Cash Value) and the other Agreed Value insurance.
Replacement Value Policies
Most companies offer Replacement Value policies. You should know that this type of coverage, in the event of a loss, does not obligate the insurer to pay you the amount that the jewelry appraised for. With Replacement Value coverage, the insurance company will only pay you what it would cost them to replace the item with like kind and quality, with a maximum being the scheduled amount. Some companies consider depreciation (wear and tear) and obsolescence when settling a replacement value claim. How accurately your appraisal has been prepared, and the details of how it written can make a tremendous difference should you have a claim.
Agreed Value Policies
An Agreed Value policy is the other type of coverage available. Not all insurance companies offer this. Agreed Value coverage is what most people think is the way their jewelry is insured – but is not. Agreed Value type insurance guarantees you the full amount of retail replacement value listed on your appraisal. As would be expected, Agreed Value policies are usually more expensive than Replacement policies. This contract is an understanding between you and the insurance company for a specific amount that you will be paid in case of loss, damage or theft.
No matter the type of policy you have or chose to buy, a regular, periodic review of your coverages, risk exposure and insurance contract terms is a wise thing to do. The start of a new year is a good time to make that review. If, in the course of that analysis, you have questions or need appraisals, please consider Gemcorp, Inc., the Southeast’s Foremost Independent Fine Jewelry Appraisers.