Given her family wealth, it’s unlikely there’ll be many people losing sleep over the fact Formula 1 heiress Tamara Ecclestone had a reported £50 million-worth of jewellery stolen from her home last night.
Thieves broke into her 55-room Kensington home (yes, you read that right – 55 rooms) and got away with a sizeable haul of jewellery that included individual items worth six figures.
I’ve heard more than one person utter the words Well, she can afford it since the news broke this morning and the truth is that she probably can. But there are still valuable lessons we mortal folk can learn when it comes to protecting our homes and the valuables we keep in them.
First of all, the theft proves that no amount of security can make your home and possessions truly untouchable. Tamara Ecclestone is reported as having told the media this morning that ‘internal security’ are investigating.
Which suggests her property was better protected than yours or mine is likely to be.
Second, it raises the question about how well insured the jewellery is.
You’d like to think a family that can probably call on an entire team of advisers and specialist service providers would have everything in place to ensure Tamara receives the full replacement value of the items that have been taken.
And in truth, she probably does. But you’d be amazed at how many people don’t have an up-to-date insurance valuation for their valuable jewellery.
The media say the items taken in last night’s theft have a total value of £50 million – but is that what they’re worth if she were to have sold them privately – or what it will cost to replace them? There’s a distinct difference between the two.
For most of us, the value of the jewellery we own depreciates over time. And while some pieces in Tamara Ecclestone’s collection may well have risen in value due either to their provenance, rarity or history, the resale value of most of it is also likely to have gone down.
But while the resale value may well have tanked, the cost of buying like-for-like replacements new is likely to be significantly higher than what was paid for the missing items – and that is the valuation that will really matter when her insurer assesses the liability.
If you’re like most people, you probably haven’t thought about how much it would cost to replace your house contents since you first took out your insurance policy.
Even when renewal time comes around, and if you do any research at all (lots of people don’t), you’re more likely than not to just go for exactly the same level of cover as you had last year.
If you have precious items that you need to specify on your policy – and I’d imagine £50 million-worth of jewellery might qualify – then it’s important to have those items valued every two years in order to ensure you’ll get their market value as new should the worst happen.
The average rate of depreciation for high quality jewellery that isn’t necessarily collectible is generally accepted to be around 5%. The maths isn’t hard to work out.
Let’s say you bought some high-end jewellery ten years ago for £10,000 which has been stolen.
If you were to have sold it today, assuming a depreciation of 5% annually, you might have got £6,000.
If the retail value of the same items has increased by 1% each year, then replacing them will cost you close to £11,000.
All of which means you’re now £5,000 out of pocket unless you have a valid insurance valuation. That’s not a sum of money most people can simply write off to experience.
So, if you haven’t had your jewellery valued for insurance purposes in a while, why not get in touch and find out about my valuation service and the additional benefits that come with getting a new appraisal?