replacement value

Dubious practices by certain suppliers within the jewellery industry means that some policyholders are at risk of losing out when filing claims for lost or stolen items. As a result, it is important that clients are made aware of the potential dangers when insuring their jewellery and how to overcome them.

 

One of the common ways that clients sometimes suffer at the hands of disreputable jewellers is having their lost or stolen items replaced with an item of lower spec than the jeweller actually quoted on. For example, a jeweller may attempt to win business by providing the cheapest quote to replace a diamond of 0.60 carats. However, when they actually provide the replacement, the diamond is only 0.59 carats. While the weight difference is minimal, the value between these two is hugely different.

 

These sorts of practices can occur at many levels from the jeweller not replacing the item correctly, to the claims staff at an insurer favouring certain suppliers to the consumer themselves filing a fraudulent claim. However, despite this it can be a good idea for brokers to advise their clients of the potential risks involved when insuring expensive items of jewellery.

 

For example, certain policies do not require insurers to replace lost or stolen jewellery using the original supplier. Being unable to use their original jeweller or receiving a replacement item that is perceived to be inferior to the one that was lost or stolen, can be a key reason in the breakdown in relationships between advisers and clients, who often feel betrayed by this practice and tend to blame their brokers. As an adviser, it can be a good idea to highlight this upfront to clients, especially if they have specified particular pieces of jewellery on their policy.so that they can choose to use their original jeweller if they so wish.

 

However, clients should also be aware that using the original jeweller is still no guarantee. Insurers often have a panel of jewellers they approach for quotations, who they can audit at any time. As a result, if a piece of jewellery is replaced with a lower spec product by one of these recommended jewellers, your client will have recourse to approach their insurer. However, if clients insist on choosing their own jeweller, they may find that they do not have this right to recourse.

 

To give clients the best level of protection possible, it can be a good idea to suggest they keep a detailed inventory of all jewellery items including where they were manufactured; to obtain valuation certificates from reputable jewellers when insuring; and to insist upfront that replacement is done by the original jeweller who manufactured the item if so wished.

 

Clients should also be made aware that some insurance companies have restrictions in their policies. For example, they may impose a limitation of insured amounts if the client is not in possession of a valid valuation certificate and many now have locked safe warranties, whereby clients must keep items such as expensive jewellery over a certain value in a locked safe when not worn.

 

Corrupt practices are not just found in the insurance or jewellery industries, but across all industries. However, if you make your client aware of the risks they are then able to arm themselves with all the necessary information to make sure that they do not fall foul of disreputable providers.

 

Losing a piece of jewellery can be traumatic, as if often tends to have sentimental as well as monetary value attached, so it is important that if it does happen, at least your client has the peace of mind of knowing that they can have the item replaced properly.