Insuring for less than appraisal?

[kat08]

The appraisal for my ring came in for substantially more than we paid (almost $4000 more; we paid about $5500 for the ring). The appraisal was done by a GIA certified appraiser. Jeweler's Mutual won't let us insure the ring for less than the appraisal value. I don't mind insuring maybe a $1000 more than we paid, just to be on the safe side if we ever lost the ring, but I don't understand why we must insure for the full appraised value when it's highly unlikely the insurance company would need to pay that much to replace the ring.

Is this a standard thing, and I should just get over it? Or is there another jewelry insurance company that you all would recommend?

 

[davi_el_mejor]

Go to a different appraiser... inflated appraisals do nothing more than make your premiums higher than they need to be!

 

[aviastar]

I'd get another appraisal. If they are about the same, then go for it, if not you have two you can chose to insure based on.

FWIW, it was my understanding that most insurance policies would accept a reciept of the ring (+ diamond if they were seperate purchases) within a year of the initial purchase for determining value. If it has been more than a year then the replacement value may have gone up, but $4,000 does sound like an awfully lot.

Also, my sister has her policy through USAA, who she has all her policies through, and they don't require appraisals apparently. So if that's an option, it may be worth looking into.

Best of luck!

 

[kat08]

I'd get another appraisal. If they are about the same, then go for it, if not you have two you can chose to insure based on.

FWIW, it was my understanding that most insurance policies would accept a reciept of the ring (+ diamond if they were seperate purchases) within a year of the initial purchase for determining value. If it has been more than a year then the replacement value may have gone up, but $4,000 does sound like an awfully lot.

Also, my sister has her policy through USAA, who she has all her policies through, and they don't require appraisals apparently. So if that's an option, it may be worth looking into.

Best of luck!

Ahh! I wish I had known that a receipt was acceptable for a recently purchased item before I got the appraisal (I could have saved myself that expense!). I just called JM again, and I can use the receipt. Thanks for the advice!

 

[Rockdiamond]

It's very important for anyone issuing an appraisal to explain the basis of valuation.
For example, let's appraise a 1.00 G/VS1 triple EX round diamond. How much is a fair appraisal value?
Well, if someone is selling that stone on craig's list, I'd say $2k.
If it's in a "blue box" that value goes to $20k ( hypothetically)

Therefore any value between $2k and $20k is technically correct.

If this was not explained properly, my opinion is that you have the right to complain about this Kat. You paid for a service- and at the very least, the appraiser can re-write the appraisal to reflect what you actually paid.

This is a big loosing game for consumers.
The insurance company will allow you to "over-insure" your ring- and by a large margin.
Many people don't realize the insurance companies virtually never pay out cash settlements- they replace the item.
So you can pay insurance for a $25k ring that may be actually replaced for $12 by the insurance company- but you paid premiums on $25k for years.

 

[diamondseeker2006]

I am surprised to hear JM will let you use the sales receipt because my daughter went through that with her e-ring. I have Chubb and they do let me use sales receipts, thankfully! That is my preference, unless the item was bought secondhand at a price much lower than a true replacement value. Then I would use an appraisal.

If I dealt with an insurance company that required an appraisal, I would absolutely show the appraiser what I paid and explain that I do NOT want the value to exceed what I paid, IF the ring was bought at retail.

 

[SCARLETTE]

About a month ago, I also contacted JM to insure my recently purchased e-ring. The actual purchased price was 4K less than the appraised value. I tried to get the agent to agree to insure it at the actual purchased price but she would not, citing that it is a replacement value so they may not be able to replace my ring at that price since I may have gotten a "great discount" from my jeweler. Didn't buy her explanation and didn't buy the policy either. My reasoning is that if they can't replace it with the amount I insured it for, then they can just give me the cashed out "cheap" price of what I actually paid - but I suppose their business model is replace not cash-out.