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  • Insurance valuations: Why it’s important to have an up-to-date jewellery valuation

Insurance valuations: Why it’s important to have an up-to-date jewellery valuation
Now more than ever it’s crucial that your jewellery is up-to-date with your insurance company.

It seems that more and more people are sadly being robbed of their personal possessions. Insurance valuations that were written out perhaps a few years ago, need to be updated, so should something happen, you know that you will be able to get back an amount of money that will enable you to replace what was lost or stolen.

The most common of all questions posed by clients are the ones asking why they should have their jewellery documented and valued in the first place.
There are three basic reasons:

  • In order to be fully insured, your jewellery items may need to be listed separately on your Contents Insurance Policy – valuations are usually needed to do this.
  • At claim time the valuations provide proof you had the item or items, and proof of their value. Without them you may end up with an unfair settlement, and no way of proving it.
  • The valuation reports will increase your chances of successful recovery by the Police.
I understand that it seems like an unnecessary expense to always have your jewellery valuation updated every few years. However, let me paint you a picture. There seems to be a common misconception that diamonds are cheaper in different parts of the world. Let me assure you this is not necessarily so. The truth is that diamonds are priced in US dollars around the world. The price is then converted on the day to the currency of the country that you are purchasing in. For example, I buy my diamonds in US dollars and then convert them into Sterling when I’m working out a transaction. This is the same all around the world. And it’s like anything, if you can purchase a diamond as close to the wholesale price as possible, then you will be getting it cheaper than buying it in a retail shop.

To assist me with this, I spoke to expert insurance broker Mike Nightingale from Flint Insurance. This is what he told me.

"As an insurance broker looking after wealthy individuals and high profile figures, we are well placed to comment on the value of accurate and current jewellery valuations. As a rule, we advise our clients to refresh valuations every three years, particularly for larger pieces.  The importance of a valuation cannot be overstated when settling an insurance claim following loss, damage or theft. We were recently able to settle a claim on behalf of a client within a matter of hours on the basis we could provide a recent current description and valuation to support the loss."

Insurance valuations: Why it's important to have an up-to-date jewellery valuation.

It was only a few years ago that the exchange rate from US dollars to Sterling was much greater than it is now. In fact if you have a valuation certificate that was last updated in 2009, you can be sure your jewellery is worth around 40% more today than it was then. Part of this is due to inflation but a large part of this is due to the exchange rate.

Another reason the insurance companies insisting on you having your valuations updated, is so that the jeweller can also check the setting whilst he is apprising the jewellery.

What should be on valuation report?

When I write out a valuation it’s important that the item is described properly. A colour photo is a great help. Specifically if it’s an engagement ring, most of the money will be in the main diamond. If the diamond is certified and then the certificate number should be noted, as well as the name of the grading laboratory. It should be dated and also stated exactly what type of valuation it is. There are different types of valuations depending on the circumstances it's needed for. Insurance retail replacement, manufacture replacement value, probate valuation, private sale valuation, and family division valuations for couple going through divorce.

My clients are sometimes curious as to why some items of jewellery are listed separately on their insurance policy. Most policies have pay-out limits for jewellery items that are not listed, typically a figure between £1,000 and £2,000 for each, but some are as low as £500. There is also usually a total limit for each claim of between £2,500 and £20,000 irrespective of the number of unlisted items in the claim. Although this does vary depending on your insurance provider. I strongly recommend that even your lower value items should be listed for you to be fully protected. Even if you take individual photos and write a description and keep it safe on the cloud. Should something happen, you would find it hard to recount all your items in the heat of the moment with a loss assessor.

Insurance valuations: Why it's important to have an up-to-date jewellery valuation.

In the sad event of a claim on your policy being required the Insurance Company will want some proof of ownership, and proof of the value of the item. Once the claim is accepted, the current value or values will be re-calculated from the item description in your valuation. This is why the description is the most important part of your jewellery valuation.

It is a popular misconception by policy holders that the Insurance Company will payout what ever value is stated on the valuation. When you send your valuation copies in to your broker or insurance company, it represents the amount you want your jewellery covered for, and forms the basis for the premium calculation. By accepting the valuation the insurance company is not promising to pay the valued amount. This is because they are insuring the item, not the valuation. Claims are settled on the value of the item at the time of loss. All of which is why the accuracy and detail of the description in the valuation is so important.

How much should it cost?
The cost will vary from shop to shop from as little as 1% to as much as 4% of the total price. What I prefer to do is see exactly what they have before I decide on a cost. I want to make it as cost-effective as possible for my client. That’s to say that you could come in with 10 items, but after me reviewing your insurance policy, I would know that only two need to be committed to paper and noted as specified articles. If they are fairly straightforward, then I will only charge a fixed fee per item. Sometimes the jewellery will also need a polish before I can carry out the valuation. It's difficult to see the clarity of a diamond if it's covered in dirt. This is carried out at a small nominal extra charge.

So as the saying goes, prevention is better than cure. Please make sure that your insurance valuation is up-to-date and current. If you have any questions then please feel free to contact me and I will help answer them for you.

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Lewis Malka

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