An engagement ring is usually a very large investment for most of us. Therefore, it is recommended that the ring be appraised and insured. The appraisal can be done by a competent and qualified appraiser who works in the personal property field. This appraiser does not have to work independently of a jewelry store. They can be employed by a jewelry store and still perform appraisals for customers of the store and non customers. However, they must deliver an appraisal that represents the true market value of the jewelry and not necessarily the price paid in the store. Example: The store gives a customer a 10% discount on an item. The appraiser would then value the piece at the current market value (what a comparable item would sell for in the most common market) and not at the discounted price.
Some jewelers will sell a piece of jewelry for one price and then give you an appraisal for a much higher value. This practice, if not illegal, is certainly unethical and is frowned upon by all appraisal organizations. Anyone receiving an appraisal with a value that is extremely higher than what was paid for the piece should question the jeweler as to why this was done. If you buy insurance based on an inflated value then you will be over paying for your insurance. Most jewelry insurance is for Retail Replacement Value. This means that the insurance company is obligated to replace the item in like kind and quality. This does not mean that the insurance company will write you a check for the value stated on the appraisal. If you have a jewelry loss and choose to cash out, the insurance company will usually only pay you an amount equal to what they can replace the item for through their sources.
Most insurance companies do not require that an appraisal be from an independent appraiser although this is thought to be true by some in the industry. Assuming that you are insuring a diamond engagement ring the important factor for the insurance company is that it be accurately and completely described with the current market value. The appraisal should contain a reference to any Diamond Grading Report that might accompany the diamond, along with a complete description of the mounting into which the diamond is set. The insurance company will decide if they will insure the ring based on the description in the appraisal. Many insurance companies are now requiring that an appraisal be performed by a Graduate Gemologist with additional training in appraisal theory.
Most homeowner's policies offer a jewelry coverage policy. You should check with your agent and ask what their requirements are. You should find out what they cover, and equally important, what they don't cover. If you rent your home or apartment, it is possible to purchase a renter's policy which can also include jewelry coverage. It is not necessary to have a homeowner's policy. If you rent a home you can still get insurance.
Also, Jewelers Mutual offers a jewelry policy. This policy is not connected to your home or your apartment. This company offers Replacement Value only (meaning that they will replace your property with like kind and quality). You can replace your items anywhere you choose, but it's usually done with the jeweler who you purchased the item from. You can speak to this company directly at 800-558-6411 and they will give you all the information that you need.
Chubb Insurance Company also offers a jewelry policy. They offer insurance through independent insurance agents and some retail jewelers. Chubb allows for you to cash out with the amount shown on the policy. No deductible. You can get more information by calling the following number 908-903-2000.
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