Insurance on a diamond engagement ring

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CWRadio
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Insurance on a diamond engagement ring

Post by CWRadio » Wed Mar 01, 2017 10:29 am

I just had my wife diamond engagement ring appraised. The appraisal was for $20,000.
I took the appraisal to my insurance company and had it insured.
During my conversation with the insurance agent I ask him what happen if the ring was lost. He stated, you would get an exact replacement.
I then said what happens if my wife did not want a replacement because the diamond engagement ring had personal value and would I get the $20,000.
He said no. The insurance company would shop around for the exact same ring and most likely give me the price they needed to replace the diamond engagement ring which maybe less then the $20,000.

Does this make sense? Thanks

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prudent
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Re: Insurance on a diamond engagement ring

Post by prudent » Wed Mar 01, 2017 10:39 am

That's my understanding of how it works. The insurance company believes if they get you an exact replacement, you have been made whole. That protects them against inflated appraisals - and they are often inflated. It's pretty routine for people to find that the appraised value of a ring is more than they paid. Also, insurance companies are able to obtain a ring with a diamond of like kind and quality for a lot less than what you or I might pay.

It may seem odd, but if they were on the hook for full appraised value, the insurance cost would be higher. I guess the best way to look at it is that they are insuring the item and not a dollar amount that an appraiser might put on the item.

pshonore
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Re: Insurance on a diamond engagement ring

Post by pshonore » Wed Mar 01, 2017 11:11 am

Kind of like Antiques Roadshow where the conversation typically goes "Your item is worth X but I'd insure it for 2X"

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sunny_socal
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Re: Insurance on a diamond engagement ring

Post by sunny_socal » Wed Mar 01, 2017 1:22 pm

I've been wondering this myself. We have some jewelry & watches insured, but the insurance cost is something like $400/year. At that rate I could put that much aside and pretty soon I'd have a "jewelry insurance fund" set up!

Let's say the OP's diamond ring only cost him $10k to purchase yet appraised @ $20. What value should be requested as the insurance amount? (Keep in mind that ring would probably only fetch $2k if sold.)

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Re: Insurance on a diamond engagement ring

Post by pshonore » Wed Mar 01, 2017 1:31 pm

sunny_socal wrote:I've been wondering this myself. We have some jewelry & watches insured, but the insurance cost is something like $400/year. At that rate I could put that much aside and pretty soon I'd have a "jewelry insurance fund" set up!

Let's say the OP's diamond ring only cost him $10k to purchase yet appraised @ $20. What value should be requested as the insurance amount? (Keep in mind that ring would probably only fetch $2k if sold.)
Most insurors will want to see an appraisal by a reputable jeweler. Going rate for Jewelry is probably $10-$12 per 1000 of coverage ($50 to insure for $5K). There may be a minimum premium as well and they might want to write Homeowners as well if its a multi-line insuror

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CWRadio
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Re: Insurance on a diamond engagement ring

Post by CWRadio » Wed Mar 01, 2017 1:42 pm

Thanks for all your comments and replies.
The question is how do you have a appraisal written that has all the specification of the diamond engagement ring, but has the appraised value equal to the replacement cost that the insurance company will give you. Remember the insurance company can shop for a replacement anyplace and not just your home town.
Why pay for more insurance then you need.
Thanks

themesrob
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Re: Insurance on a diamond engagement ring

Post by themesrob » Wed Mar 01, 2017 1:43 pm

my experience was that yes, if you are pursuing a rider to an existing homeowner's/renter's policy for an engagement ring (or "scheduling" it), a replacement provided by the insurer was the standard course of action, rather than cutting you a check. If you are wary of the former, there are insurers who specifically handle jewelry as a separate policy, and who either cut you a check in the event of loss/theft or will work with the jeweler of your choosing to provide you an equivalent ring. When I looked into it, though, it seemed to me that the premiums for separate policies were significantly higher than the rider option, and some companies (Chubb, for example, IIRC) would only handle very high dollar insurable amounts (six figures is what the rep told me).

FWIW, at the time I was doing this, my then-renter's insurer (Progressive) denied my request to add the ring as a scheduled item because we had been burglarized a few years earlier and submitted a claim. I switched to another major carrier (State Farm) and scheduled it, no problem. The agent I worked with, however, was very up front with me about her opinion that no one should ever schedule an item like an engagement ring with their primary insurer and should always seek a separate policy, specifically because insurers will seek out the cheapest possible way to provide a "comparable" replacement. She said her ring was worth $50k, and she would have shot her husband if he had scheduled it on their homeowner's policy. (I said thanks, but ignored the advice.)

fantasytensai
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Re: Insurance on a diamond engagement ring

Post by fantasytensai » Wed Mar 01, 2017 2:30 pm

I also insured my engagement ring. I was asked by my broker to submit all sorts of information. This was a Tiffany ring so they have an individual pamphlet with specific detail about each ring, so I sent that to him along with the purchase receipt. He said if there is a claim, they will use the purchase information to appraise the ring. This thread prompted me to go back and read my policy, and it says the Loss Payment method is actual cash value...which means it will be purchase price - depreciation, which was not what the broker told me. I'm at peace with it for now since the policy is only $100 a year, but once it's going up for renewal I will try to get a better answer outta him.

Swansea
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Re: Insurance on a diamond engagement ring

Post by Swansea » Wed Mar 01, 2017 2:33 pm

Excerpt from State Farm Personal Articles Policy is below. So say I have insured a diamond for 20K (appraised value), they must pay 20K cash which it would cost me to buy one which is comparable?

"Replacement Cost Coverage

We'll pay the cost to repair or replace your property, without deduction for depreciation. The personal articles policy insures against theft and accidental direct physical damage to covered property with only a few limitations and exclusions.

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Re: Insurance on a diamond engagement ring

Post by Grt2bOutdoors » Wed Mar 01, 2017 2:45 pm

I have such a policy on my wife's ring, the ring comes from Tiffany, my insurer will pay me the actual cash cost to obtain a new Tiffany ring with the same characteristics. No subsitution from Galaxy Jewelers down the block, it has to be like for like. Policy costs like $120 a year, it has an cost inflation factor on it.
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themesrob
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Re: Insurance on a diamond engagement ring

Post by themesrob » Wed Mar 01, 2017 2:48 pm

Swansea wrote:Excerpt from State Farm Personal Articles Policy is below. So say I have insured a diamond for 20K (appraised value), they must pay 20K cash which it would cost me to buy one which is comparable?

"Replacement Cost Coverage

We'll pay the cost to repair or replace your property, without deduction for depreciation. The personal articles policy insures against theft and accidental direct physical damage to covered property with only a few limitations and exclusions.


my State Farm Personal Articles Policy does not have this language. It says:

Loss Settlement. We have the option of repairing or replacing the lost or damaged property. Unless otherwise stated in this policy, covered property values will be determined at the time of loss or damage. We will pay the cost of repair or replacement, but not more than the smallest of the following amounts:
a. the full amount of our cost to repair the property to its condition immediately prior to the loss or damage;
b. the full amount of our cost to replace the item with one substantially identical to the item lost or damaged;
c. any special limit of liability described in this policy; or
d. the limit of liability applicable to the property.


in fact, when I look at the policy online, it specifies that Option I (Inflation Coverage) applies, meaning "The amount of insurance applicable to those classes of property will be increased at the same rate as the increase in the inflation coverage index shown in the Declarations."

ResearchMed
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Re: Insurance on a diamond engagement ring

Post by ResearchMed » Wed Mar 01, 2017 2:52 pm

Grt2bOutdoors wrote:I have such a policy on my wife's ring, the ring comes from Tiffany, my insurer will pay me the actual cash cost to obtain a new Tiffany ring with the same characteristics. No subsitution from Galaxy Jewelers down the block, it has to be like for like. Policy costs like $120 a year, it has an cost inflation factor on it.


Our "full replacement value" policy is somewhat like this.

Whatever the sale or appraised value, that's what we'd get.
OR they'd try to find replacement, but we'd rather do it, so we don't worry about just what it was they got, etc.

We used to have an automatic cost inflation factor (or we could opt out), but they stopped that maybe 10 (?) years ago.
Now, we need to get new appraisals if we want valuations increased (assuming they'd increase and not decrease).

When one of a pair of diamond stud earrings was lost, they offered to try to find a match, but suggested it would be easier, and probably a better "match" if we just purchased a new pair.
So I sent the one back, and by return FedEx, got a check for the full insured valuation.

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rralex1
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Re: Insurance on a diamond engagement ring

Post by rralex1 » Wed Mar 01, 2017 3:53 pm

When I compared insurance for my wife's jewelry including her engagement ring, I found two things that I expected to find. The insurance company that I use for all of my other insurance wasn't a specialist and gave fairly generalized replacement responses as indicated in other comments. Great people, it just became clear that jewelry wasn't their expertise. Jewelers Mutual Ins on the other hand was more aware of my concerns around replacement (I designed my wife's ring), and were much better prepared to explain their process. They were more expensive, but not by much, and it is their niche.

blurryvision
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Re: Insurance on a diamond engagement ring

Post by blurryvision » Wed Mar 01, 2017 4:20 pm

Check out Jeweler's Mutual for insuring the ring.

www.jewelersmutual.com/

Hukedonfonix4me
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Re: Insurance on a diamond engagement ring

Post by Hukedonfonix4me » Wed Mar 01, 2017 6:06 pm

+1 on Jeweler's Mutual. This is the insurer we used. They offered Replacement cost and its only around ~100 bucks a year.

I first looked into a rider to our homeowners policy, but they would NOT cover if my wife lost or ring was stolen "mysterious disappearance." Lets just say this is the most likely reason we would need to file a claim and thus how we made our decision.
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toofache32
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Re: Insurance on a diamond engagement ring

Post by toofache32 » Thu Mar 02, 2017 1:49 am

I had my wife's ring insured for the appraised value of $12,000. Married 18 years. Last year she lost the ring and after days of searching we could not find it. Insurance cut us a check for $12,000. She got a new ring and insured it through the same company. About a month later, she found the old ring. I called the insurance back to ask what to do because she would like to keep the original ring for sentimental value. They said don't worry about it. Strange. I guess I should have asked if we can now insure both rings.

HIinvestor
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Re: Insurance on a diamond engagement ring

Post by HIinvestor » Thu Mar 02, 2017 3:02 am

We had a burglary of our home about 20 years ago and several items of jewelry were stolen, including gold necklaces, jade and other valuable and sentimental items. The homeowner' insurance waived our deductible and paid us the policy maximum of $10,000 for all the stolen jewelry (we didn't have any separate riders for any excess value of the jewelry). Insurer did not attempt to buy any of the stolen items (it would have been difficult because most were unique). Fortunately, I was wearing my engagement ring at the time, so that wasn't stolen.

I would also find it odd if I was reimbursed for a lost ring and then found it but insurer said I could keep the money (replacement ring) AND original ring.

afan
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Re: Insurance on a diamond engagement ring

Post by afan » Thu Mar 02, 2017 5:53 am

I would not insure something that I would not be forced to replace and is not a store of value. If I had a collection of art or jewelry that I was holding as an investment and I wanted to protect its value then I might insure it for some fraction of its market value.

If we were to lose an engagement ring we would do nothing. We were not going to sell it and if we were forced by circumstances to liquidate, then the ring would yield a small fraction of its appraised value. I would rather invest the cash than pay an insurance premium.

Of course, we don't have any jewelry that appraises for $100,000. If we did we would probably sell it for the $10,000 it might bring. Insure and keep it in a safe deposit box until we unloaded it.
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Cash
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Re: Insurance on a diamond engagement ring

Post by Cash » Thu Mar 02, 2017 6:24 am

+1 for Jeweler's Mutual for a policy that will pay you the appraised value. I used to have such a policy with Chubb, but they don't insure in my current state.

pshonore
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Re: Insurance on a diamond engagement ring

Post by pshonore » Thu Mar 02, 2017 9:29 am

afan wrote:I would not insure something that I would not be forced to replace and is not a store of value. If I had a collection of art or jewelry that I was holding as an investment and I wanted to protect its value then I might insure it for some fraction of its market value.

Most insurance contracts require insurance for the full value of property. Its called the "co-insurance clause" and means if you insure your house for 50% of its value, they will pay 50% of any loss. (If you have a 40K loss, they will pay you 20K.) I'm not positive co-insurance applies to jewelry etc, but If you have a collection of art or jewelry that exceeds standard policy limits, you will likely need appraisals before the fact to get coverage.

Floaters are like any other insurance policy although most offer extended coverage beyond a standard Homeowners policy. Read the details of the policy in order to understand what you're covered for.

IowaFarmBoy
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Re: Insurance on a diamond engagement ring

Post by IowaFarmBoy » Fri Mar 03, 2017 6:48 am

I think part of the reason for only replacing instead of cutting a check is to mitigate the moral hazard. In the absence of this provision, It would be quite easy for someone in a financial bind to "lose" a ring and get a check for the full insured value instead of having to sell the ring. And they could keep the ring....

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Re: Insurance on a diamond engagement ring

Post by gasdoc » Fri Mar 03, 2017 7:05 am

afan wrote:I would not insure something that I would not be forced to replace and is not a store of value. If I had a collection of art or jewelry that I was holding as an investment and I wanted to protect its value then I might insure it for some fraction of its market value.

If we were to lose an engagement ring we would do nothing. We were not going to sell it and if we were forced by circumstances to liquidate, then the ring would yield a small fraction of its appraised value. I would rather invest the cash than pay an insurance premium.

Of course, we don't have any jewelry that appraises for $100,000. If we did we would probably sell it for the $10,000 it might bring. Insure and keep it in a safe deposit box until we unloaded it.


+1. I do not and would not insure jewelry that is given or obtained as a personal item. If it represented such a large percentage of my net worth, I probably should not have purchased it in the first place.

gasdoc

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unclescrooge
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Re: Insurance on a diamond engagement ring

Post by unclescrooge » Fri Mar 03, 2017 7:11 am

I chose not to insure my wife's engagement ring.

Instead I told her the next one would be cubic zirconia. And based on my username you can assume I'll make good on that promise!

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Re: Insurance on a diamond engagement ring

Post by saladdin » Fri Mar 03, 2017 1:55 pm

toofache32 wrote:I had my wife's ring insured for the appraised value of $12,000. Married 18 years. Last year she lost the ring and after days of searching we could not find it. Insurance cut us a check for $12,000. She got a new ring and insured it through the same company. About a month later, she found the old ring. I called the insurance back to ask what to do because she would like to keep the original ring for sentimental value. They said don't worry about it. Strange. I guess I should have asked if we can now insure both rings.


Same thing happened to Aunt Bee. In this episode, she loses an antique heirloom brooch that had belonged to her Aunt Martha. The family searches and searches. Deputy Warren surmises that the jewelry was stolen. She receives a insurance settlement and uses the money to purchase a new garbage disposal.

No sooner has the check arrived and the disposal is installed than Bee finds the missing brooch. She's wracked with guilt. Later, Warren and Goober drop the newly-found brooch down the garbage disposal and it's mangled!

CorradoJr
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Re: Insurance on a diamond engagement ring

Post by CorradoJr » Fri Mar 03, 2017 5:23 pm

CWRadio wrote:Thanks for all your comments and replies.
The question is how do you have a appraisal written that has all the specification of the diamond engagement ring, but has the appraised value equal to the replacement cost that the insurance company will give you. Remember the insurance company can shop for a replacement anyplace and not just your home town.
Why pay for more insurance then you need.
Thanks


You provide the GIA (or similar) certificate to the insurer. This specifies all the "C's" (cut, clarity, color, carat, as well as the dimensions in mm and other specs).

The new diamond should be as close to the old specs as possible, anything else is not "the same."

I use Jewelers Mutual as well and they have been easy to work with.

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Re: Insurance on a diamond engagement ring

Post by Pajamas » Fri Mar 03, 2017 5:30 pm

I know someone who had all her expensive jewelry that had meaning to her duplicated using cubic zirconia and then put the originals in a safe deposit box. It's cheaper than insurance in the long run.

Some might object that it's not the same thing but if the originals were lost, stolen, or damaged and had to be replaced, the replacement jewelry wouldn't be the same thing, either, and she has almost eliminated that possibility and all the worry that goes with it.

Also want to point out that there's not much point in paying for insurance for something you wouldn't replace, anyway. Many women who have been married for twenty years wouldn't replace their engagement ring if it were lost.

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Re: Insurance on a diamond engagement ring

Post by boglegirl » Fri Mar 03, 2017 7:36 pm

Pajamas wrote:I know someone who had all her expensive jewelry that had meaning to her duplicated using cubic zirconia and then put the originals in a safe deposit box. It's cheaper than insurance in the long run.
...


I know the ring is safer in the safety deposit box than on your finger, on in the jewelry box on top of the master bedroom dresser. But the bank doesn't insure items in safety deposit boxes. You're supposed to maintain insurance in case of theft, fire, etc.

ResearchMed
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Re: Insurance on a diamond engagement ring

Post by ResearchMed » Fri Mar 03, 2017 8:00 pm

boglegirl wrote:
Pajamas wrote:I know someone who had all her expensive jewelry that had meaning to her duplicated using cubic zirconia and then put the originals in a safe deposit box. It's cheaper than insurance in the long run.
...


I know the ring is safer in the safety deposit box than on your finger, on in the jewelry box on top of the master bedroom dresser. But the bank doesn't insure items in safety deposit boxes. You're supposed to maintain insurance in case of theft, fire, etc.


Our insurance offers a much lower cost coverage per item if it is kept in a bank vault.
There are a certain number of days per year the item is "allowed out", but a potential problem is that the insurer needs to be notified in advance when the item is removed, and again when it is returned.
Obviously, there would be no coverage for anything other than an event *at* the bank for dates the item is supposed to be there.

RM
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