House Insurance and diamond ring

InsideInsurance

22johnny22 wrote: »

this is a situation that is so common.

You pay X

the valuation says Y

the insurer say they can replace X for Z!

if the ring is worth what you pay for it (x) then insure it for (x) but expect Z

I have had sold rings at auction for £500 that were valued at £2,000

If you can, see if the insurers will specify it at X and guarantee the price.

No

The value of the goods is what matters not the price you pay for it (so Y in your book) unless you are talking about a brand new item lost in the space of months of its purchase.

Certainly an insurer is unlikely to pay Y because they have significant supply chains set up and so get volume discounts. You should expect to get a like for like replacement or "Z" if you want a cash settlement.

If however their suppliers are unable to supply anything close to a like for like (eg if your jewelry was all Tiffany) then they are not entitled to deduct their supplier discounts so would have to provide Y unless they can prove it was overvalued (which will be fairly rare)

In fact the only time I remember disputing a valuation was when it was for a damaged bracelet which had been sent in as salvage and was a piece of junk so we sent it for independent valuation. Of cause if it had been lost rather than damaged then an independent valuation would have been next to impossible.

22johnny22

InsideInsurance wrote: »

No

The value of the goods is what matters not the price you pay for it (so Y in your book) unless you are talking about a brand new item lost in the space of months of its purchase.

Certainly an insurer is unlikely to pay Y because they have significant supply chains set up and so get volume discounts. You should expect to get a like for like replacement or "Z" if you want a cash settlement.

If however their suppliers are unable to supply anything close to a like for like (eg if your jewelry was all Tiffany) then they are not entitled to deduct their supplier discounts so would have to provide Y unless they can prove it was overvalued (which will be fairly rare)

In fact the only time I remember disputing a valuation was when it was for a damaged bracelet which had been sent in as salvage and was a piece of junk so we sent it for independent valuation. Of cause if it had been lost rather than damaged then an independent valuation would have been next to impossible.

Not sure I agree

surely the price you pay for it is the value?

if Tiffanies sell a ring for x why would they value it at a higher price?

they can surely replace it for the price they received for it?

redmalc

Johnny thats what my argument is,i purchased the diamond separately and had it mounted for a total cost of £5600, so you would expect if lost or stolen i could replace for a similar expense ,so why have i got to pay the increased premium for an insurance value of £8600.

rs65

redmalc wrote: »

Johnny thats what my argument is,i purchased the diamond separately and had it mounted for a total cost of £5600, so you would expect if lost or stolen i could replace for a similar expense ,so why have i got to pay the increased premium for an insurance value of £8600.

The real question is why was it valued at £8600?

If you can replace it for £5600 and therefore want to insure it for £5600 then you need a valuation at £5600.

notanewuser

redmalc wrote: »

Johnny thats what my argument is,i purchased the diamond separately and had it mounted for a total cost of £5600, so you would expect if lost or stolen i could replace for a similar expense ,so why have i got to pay the increased premium for an insurance value of £8600.

Well, that's part of it, I expect. If you bought it already made from a jeweller you'd potentially be paying more, as they would want profit on the diamond, the metal used plus the making costs. By buying the diamond seperately it split the profits. A jeweller trying to remake the ring might have problems getting hold of an equal size and quality diamond. There are only so many in the world, after all.

InsideInsurance

22johnny22 wrote: »

Not sure I agree

surely the price you pay for it is the value?

if Tiffanies sell a ring for x why would they value it at a higher price?

they can surely replace it for the price they received for it?

Hmm, my post from yesterday isnt here for some reason.

As I said, if it was in a short period of time and you bought it brand new at full retail price then yes, that is its value.

If you bought it secondhand or in a sale etc then no it isnt its value.

As time goes on its value will change. For example a colleague has an Omega watch, when he bought it he paid full price new and it was £1,500. The same watch is still sold now but its retail price is now £3,500 and so this is the correct valuation for him to use now.

When they stop making it then life gets more complex and you are then in the area of needing expert judgement of if its become a classic collectors piece and so continues to appreciate or if its a run of the mill watch that'll depreciate over time.

Jewellery is slightly harder because no two items are truly identical, for basic pieces the deviations are just accepted but when you start getting larger diamonds etc then each piece is individually priced based on the quality of the feature stone(s)