8 replies to this topic

[proposalguy]

Hi all

So, probably a stupid question but here goes:

when I bought my (girlfriend's) engagement ring, i paid c£3100. I got a valuation from the jeweler who sold it, for £6300. I have a feeling this is too high! But maybe that's an accurate reflection of the retail price.

What should I do re insuring the ring? Is it fraudulent, should the ring be lost, to claim £6300 when I paid £3100?should I get an independent valuation?

All help appreciated

thanks

[denverappraiser]

Yeah, it’s probably too high, but the problem isn’t what you think. The usual procedure for insurance companies in the case of a claim is to replace with ‘like kind and quality’. This means that they aren’t going to cut you a check for 6300, they’re going to go shopping and buy you a new ring to replace the lost one. If they can get it for less, and they probably can, that’s exactly what they’ll do. The problem here is that your premium is a direct percentage of the value you declare but their behavior in the case of a loss is going to be based on what it actually costs them to replace the ring. By submitting an inflated appraisal you are doubling your insurance premiums but you’re getting nothing for it in terms of increased coverage.

The solution is to talk to your appraiser. If they don’t understand the rules, or they don’t understand what things really cost, find a different appraiser. The ‘free’ documents given out by jewelers along with the packing materials are routinely worth less than they cost.

[proposalguy]

Thanks. Thing is, I'm confident that it's worth considerably more than what I paid for it... So I guess I need to have an independent, accurate valuation carried out. If j I sure for what it cost me, I don't think the insure will e able to get a like fr like replacement. But similarly, too high a valuation = wasted premium money.

Is my understanding correct now?

Thank you for your help.

[proposalguy]

If I insure*

[proposalguy]

So, I got it valued by an independent valuer/appraiser in Hatton Garden. Before I told him how much I paid, he said his retail price would be c.£4,500 but average high street price would be closer to £5,000.

So, I'm v happy with the saving I've made given that I paid £3,100 and I now have a realistic value for insurance purposes .

[davidelevi]

Make sure that however you end up insuring it, the description against which you insure the item is as complete as possible - simply "0.91 ct princess cut E/VS1" is going to get the insurance company off the hook with a so-so cut EGL-Israel graded stone.

[denverappraiser]

proposalguy, on 07 October 2010 - 12:12 AM, said:

If I insure*

Congratulations on a successful purchase.

Your stated purpose is insurance. Purpose is important for appraisals to be useful and if you've got a different purpose you will have a different sort of appraisal. There's nothing wrong with that but it's important to be answering the right question or your appraisal is a waste of time. If your real objective is to confirm that you got what you thought you got and that you paid an appropriate price for it, ask your appraiser THAT. Any statement of value must contain an element of what it's worth to whom, when and under what circumstances or it's simply not useful information. The observation that a hypothetical Hatton Gardon retailer might charge a lot for it is, perhaps, correct but do make sure it's both the correct answer to the question and the correct question. Without both you have nothing.

[LaurieH]

Where I used to work, we would basically give a single-sheet description of the ring (or loose diamond) with a 40% mark-up for "retail replacement value". This was done for this reason: should you have lost the ring or had it stolen, the center diamond fall out--whatever--this made certain that you had the ring insurable for AT LEAST enough to replace it with as identical an item as possible, allowing for market fluctuations. This means that if gold shot up in price (which it has), and the diamond you bought, 2 years later, was going to cost x amt more, you weren't going to be out of pocket. And what someone posted earlier is exactly true--if the insurance company can help you replace it, or you find a replacement cheaper than the insured value, then that is what they will pay. BUT you never want to just insure it for what you paid, especially if you got a sale or special price somehow, and could never really buy it again for the same exact price. This way you aren't ever "out of pocket"

Congrats on finding a great ring that you're pleased with

[denverappraiser]

LaurieH, on 08 October 2010 - 08:39 PM, said:

BUT you never want to just insure it for what you paid, especially if you got a sale or special price somehow, and could never really buy it again for the same exact price. This way you aren't ever "out of pocket"

Congrats on finding a great ring that you're pleased with

I flatly disagree with this. Overinsuring a piece GUARANTEES that you are going to be 'out of pocket' in the form of extra premiums for which you get nothing. Nearly every jewelry deal includes a seller who reports that it's a special price and a great deal. That's just the way sales people are but it doesn't make it so. Maybe you did, but the cost to replace is not a function of what you paid and it's often not a function of what the seller told you about what a good deal you got. The insurers are reasonably savvy shoppers and they come in under budget nearly every time. Often it's WAY under budget if the budget is set using a seller supplied 'appraisal' that indicated it was a great bargain. If YOU can find it for cheap, chances are good that they can too.

Edited by denverappraiser, 09 October 2010 - 10:31 AM.