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Monday, October 1, 2012

More on Insurance

I recently had a customer come in for a repair on a ring of mine and when we got it cleaned up realized that she had whacked the stone at some point and pretty much ruined it as it cracked all the way through the stone.  Most likely there was a small inclusion there that when she hit it was extended throughout the stone.
This is not a common experience but it does happen.  When talking to her about it I suggested that she contact her insurance company as some of them will cover damage to jewelry, as well as loss or theft.  She did, and as it happens, the insurance company did agree to cover it (minus her deductible).  I always think it's nice when you can actually get an insurance company that will do this but from here on it the process got much more dicey.

The insurance company called me up and asked how much I thought it would cost to replace the stone.  I quoted them a price based on what I would normally charge my customers for an equivalent quality stone (in this case, roughly $1800).  Now  I know that insurance companies are loath to pay full retail prices. They routinely set up deals with retailers who offer them large discounts because the insurance company directs significant amounts of business in their direction. There are also now companies out there who are basically just an office space and all they do is insurance replacements.

Insurance companies will very, very rarely pay out actual money for what they have insured something for, so if you have a ring appraised at $20,000 and it gets stolen don't think you're going to get $20,000 in cash back from them.  Usually, they have only agreed (when you read the fine print) to "make you whole" which for them means finding the cheapest possible replacement for what you had.  This is a good reason to make sure that if you have designer made pieces you need to have a proper appraisal on them that clearly identifies who makes them and current replacement values and that you need proper descriptions of any gemstones (including diamonds) that you may own. Even if they agree to make you whole in cash, they will still base the payout on what they could purchase a similar piece for from one of their suppliers.

So in this case, the first thing the insurance company did was go to one of the companies they work with that is basically an office space doing insurance replacements. And within a week they called me back and said, we can get the same stone from them for $650.  Now as it happens, this was a blue/purple sapphire and I have been specializing in purple sapphires for over 30 years and I knew that there was no way that they could replace what I was looking at for $650 no matter how large of a discount they were getting.  So I told them I wanted to see the stone (since I'm the one putting it back in the ring I would need to anyway) first.  The company shipped it out to me and surprise, surprise, it wasn't quite what my customer had.  Actually it wasn't at all what the customer had.  It was a completely different color, it was so poorly cut that the stone wasn't even a true oval shape and it had eye visible inclusions and a nick on one side.  It went back to their supplier, along with the original stone so they could get a better idea of what they were actually trying to replace.  A couple of weeks later I got two new stones in.  I had talked to them about how poor the make (the cut) had been on the first one and that there was no way the customer should have to accept that.  These two stones were both much better cut, yet neither one of them was actually the same color.  One of them was quite nice and had a pleasing color change but it is still not the same color stone as she had.  Both of these stones are significantly more expensive than the first one they tried to use, albeit still a little less than what I would be charging.  But it still isn't the same color stone.  Unfortunately the insurance company is never going to pay my prices so the customer is going to have to pick one of the ones they sent (and the one I liked is a very pretty stone and I will probably recommend that one for her).  Now if they had agreed to work with me I would have found a stone that was a pretty exact replacement because, as I said before, I specialize in these stones.

So what are you, as a customer going to do?  Well, first of all, you should actually read your insurance policies so you know what they say about things like this. Or, ask your agent to clearly explain what they cover if you don't have the time or energy to try to decipher the cryptic language usually used. Secondly, you might consider insuring your jewelry with a company like Jeweler's Mutual Insurance Company.  This is my insurance company and the only product they cover is jewelry so they have a better grasp on this issue than any other company in the world. They sell individual policies, that are competitively priced and most importantly they will let you go to the jeweler of your choosing!  If you buy from someone like me this is immensely important as you really can't replace what I sell at a commercial jewelry store (no matter what the insurance companies tell you---and no matter how much they try to get other jewelers to violate copyright by having them copy another jeweler's designs). 

Remember that while insurance companies like to sell you on the idea that they are providing peace of mind, truly they are only providing it up to the dollar amount they are willing to pay out.  Ask questions!  Find out what your real coverage is!

For my regular readers, if you haven't been on my website recently, you should know that we have been going through an overhaul of it.  While the general format is the same there are a lot of new pictures up and we have been playing around with a lot of things on it.  Please check it out. If you have any feedback, please let me know.  We've been using a wonderful website person in Wisconsin and I have posted a link to her on the side of the page where I have my other links. 

The ring pictured above is 950 platinum with a purple sapphires and diamonds.

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