Jewelers Mutual Explanation

[DRE06]

Can someone explain to me how their policy works on engagement rings? Has anyone filed a claim?

My ring purchase was appraised for $21,000, however, the price I paid was significantly less since I used a family friend that was a jeweler.

What happens in the event of a lost or stolen ring? Damaged ring?

 

[lovemybling]

I have a similar situation and my friend who is a jewler said that you want to cover your ring for what they think it would cost to replace it. It may have cost you quite a bit less to purchase it but as you can see prices in diamonds and metals are going UP AND UP, it could cost you quite a bit more to replace it now then it was to purchase it a while ago.

I hope that explianation make sense.

 

[Gibson486]

your appraisal price and buy price are two different things. If you bought a diamond, and the insurance appraisal matches that price, then you got ripped off. This is why you constantly see those commercials where they say your jewelery will appraise for double.

 

[TheDoctor]

your appraisal price and buy price are two different things. If you bought a diamond, and the insurance appraisal matches that price, then you got ripped off. This is why you constantly see those commercials where they say your jewelery will appraise for double.

Common misunderstanding.
Nearly every purchase is fair market value, no matter how it is purchased. This applies to a much broader series of goods than diamonds or jewellery.
Fair market value is what someone will pay, whether it appears to be 75% off of a fictitious retail price or regular everyday price.
If an invoice for a product states it was paid for at $1000.00, logically one must assume that there isn't anyone else getting $1500.00 for that same product. Inflated jewellery appraisals have been used for a long time to hype cheap sale prices but the practice is pretty illegal...where this hurts consumers post-purchase is when buying insurance. Paying a premium based on a fictitious replacement value? How clever a move is that, following your purchase of something you think you got for half price? Using your head will help you keep some of the money you work so hard for.

 

[Dancing Fire]

never purchase insurance based on the "feel good appraisel price". IMO...if you paid $10k for the stone then purchase maybe like $11k worth of coverage.

 

[DRE06]

I guess you kind of touched on what I'm talking about.

Example:
Diamond me cost $10.5k (although comparable diamonds on all online dealers actually cost about $13k)
Custom Ring cost $2.5k
Total price $13k

Appraisal comes in at $21k

Quotes from Jewelers Mutual for my location:
$13k = $178 annual insurance premium
$17k = $258
$21k = $319

Now if the Insurance Company would just cut me a check for the lost/stolen ring upon filing a claim, it would make sense to have the $21k appraisal. However, my understanding is that's not how it works and why pay for $21k insurance premiums if you file a claim and don't get $21k worth of insurance payback.

How does Jewelers Mutual decide how much they will reimburse you? Based on replacement costs? How is that determined?

What happens if you insure it for $13k (actual purchase costs) and the cost of diamonds/platinum increases significantly and then the replacement costs is higher than $13k?

 

[diamondseeker2006]

Having recently dealt with this when helping someone, I was told that JM would NOT insure for the purchase price and required using the inflated insurance "appraisal". I salute David Keeling above for stating how I feel about this. I insure things to protect the money I paid for the item. I don't want to pay for insurance at $21k when the item cost $13k because the insurance company is going to be able to replace the item at $13k...adding something for inflation over time. I use Chubb and they allowed me to use sales receipts with lab reports when I wanted to. Plus they will cut me a check for a loss. I only want to pay premiums on what it would cost to replace the item.

Seeing that the vast majority of people never lose or damage their engagement rings, it seems pretty crazy to me to overinsure by 1/3.

To DRE06, unless the diamond was second hand, I'd be very surprised if a regular jeweler really gave you a $1500 better deal than you could get online where profit margins are usually smaller than brick and mortar stores. Can you post the grading report just so we can compare? I'm just curious to see it.

 

[luv2sparkle]

I just told JM what amount I wanted to insure it for. I didn't want to pay for the inflated price. They said no problem. I did leave
a little room for inflation. It didn't make the premium go down a whole lot but it helped.

 

[shihtzulover]

My fiance and I decided to insure for the full appraisal amount, just to be safe. Considering that diamond prices are currently rising so rapidly, it seemed like the best choice for us.

 

[DRE06]

Diamond Seeker-

The diamond is a GIA 1.71 RB, I Color, SI1, EX, EX, EX, 58 table, 61.3 depth, with a 1.4 HCA score.

It was listed online for $10,751 1.5 months ago (bank wire price). My jeweler found the actual seller of the diamond and I got it for $10,071. My jeweler took no profit, as she is a very close family friend.

Diamond prices have increased and a quick for similar stones comes up: Blue Nile at $13,095, Abazias at $11,932, and Brian Gavin $12,036.

 

[neatfreak]

JM will replace for WHAT IT ACTUALLY COSTS to replace your stone and ring. So insuring for more than it would cost to replace isn't smart--they won't give you $21k to replace something that costs only $14k on the market.

If you have a 1 carat F SI1 in a platinum solitaire, they will replace your ring with a 1 carat F SI1 platinum solitaire or will pay the max amount of your policy if you are under insured.

I had a claim a few years ago on my setting and they worked with my jeweler to pay exactly what my setting was worth. I was made whole but you won't profit from it even if you insure for the inflated appraisal's value. If I had insured my setting for $5000 (it was worth about $2500) I would have been paying extra premiums on something that was worth nothing. At the end of the day I still had the same setting, that's it. They won't give you $5k for a setting that was only worth $2500, even if you are insured for $5k.

My .02 is to insure for a little more than you paid to cover inflation and then reassess when diamond prices go up.

FWIW, JM did allow me to use sales receipts to insure my pieces but it was a few years ago. You can also ask any qualified appraiser to appraise it for what you paid rather an an inflated price too.

 

[DRE06]

So let me get this straight, I buy a engagment ring that would have cost me roughly $16k, but I only paid $13k. It is appraised at $21k.

If I take out a $16k policy, lose the ring in 2 years and replacement costs has gone up to $20k due increased prices, JM will only reimburse me $16k of my policy, and I'm stuck with not only the $1,000 deductible, but also $4k of additional exposure due to increased prices.

But if I ensure for the appraisal price of $21k, and at the time of the loss the replacement costs is still $16k, then JM will only reimburse the lower replacement costs and I'm stuck in a situation where I was paying higher insurance premiums than I should have?

 

[neatfreak]

So let me get this straight, I buy a engagment ring that would have cost me roughly $16k, but I only paid $13k. It is appraised at $21k.

If I take out a $16k policy, lose the ring in 2 years and replacement costs has gone up to $20k due increased prices, JM will only reimburse me $16k of my policy, and I'm stuck with not only the $1,000 deductible, but also $4k of additional exposure due to increased prices.

But if I ensure for the appraisal price of $21k, and at the time of the loss the replacement costs is still $16k, then JM will only reimburse the lower replacement costs and I'm stuck in a situation where I was paying higher insurance premiums than I should have?

Double check with them but that's how insurance usually works. If they paid out whatever it cost EVEN if it was more than the policy then everyone would underinsure. It is your job to be sure that your insurance is enough to cover your stuff. End of story.

Same thing with house insurance and any other insurance. You insure for what it's worth, they replace it. You can't insure a house for $100,000 and then it burns down and expect to get $500,000 if that's what it actually costs. That makes no sense.

You can also choose to lower the deductible if you want, but premiums cost more.

That's why FOR ME, I insure for a bit more than my cost to cover inflation and reassess every few years. That's what you do with insurance.

 

[DRE06]

Thanks you Freak

I guess it makes sense.

 

[sonnyjane]

So let me get this straight, I buy a engagment ring that would have cost me roughly $16k, but I only paid $13k. It is appraised at $21k.

If I take out a $16k policy, lose the ring in 2 years and replacement costs has gone up to $20k due increased prices, JM will only reimburse me $16k of my policy, and I'm stuck with not only the $1,000 deductible, but also $4k of additional exposure due to increased prices.

But if I ensure for the appraisal price of $21k, and at the time of the loss the replacement costs is still $16k, then JM will only reimburse the lower replacement costs and I'm stuck in a situation where I was paying higher insurance premiums than I should have?

I just looked through my JM paperwork and as far as I can tell, for the most part JM replaces the jewelery that was lost or damaged. They do not do payouts like other insurance companies, and if they do, it would only be in the event that you absolutely could not be satisfied with any of the solutions they offered, and in that case yes, it would only be for the amount of your policy. If you want a company that will pay you cash for a loss, JM is probably not your best bet.

Also, your post prompted me to call JM about my deductibles because I couldn't remember what they were! A $1,000 deductible is really quite high I would think. I found out that I have a $0 deductible on my wedding set (which is valued at $6,000-ish) and I only pay $86 a year, so I'd imagine you could still find a very low premium with a lower deductible than $1,000.

 

[Yimmers]

So let me get this straight, I buy a engagment ring that would have cost me roughly $16k, but I only paid $13k. It is appraised at $21k.

If I take out a $16k policy, lose the ring in 2 years and replacement costs has gone up to $20k due increased prices, JM will only reimburse me $16k of my policy, and I'm stuck with not only the $1,000 deductible, but also $4k of additional exposure due to increased prices.

But if I ensure for the appraisal price of $21k, and at the time of the loss the replacement costs is still $16k, then JM will only reimburse the lower replacement costs and I'm stuck in a situation where I was paying higher insurance premiums than I should have?

Double check with them but that's how insurance usually works. If they paid out whatever it cost EVEN if it was more than the policy then everyone would underinsure. It is your job to be sure that your insurance is enough to cover your stuff. End of story.

Same thing with house insurance and any other insurance. You insure for what it's worth, they replace it. You can't insure a house for $100,000 and then it burns down and expect to get $500,000 if that's what it actually costs. That makes no sense.

You can also choose to lower the deductible if you want, but premiums cost more.

That's why FOR ME, I insure for a bit more than my cost to cover inflation and reassess every few years. That's what you do with insurance.

If you're that concerned, if your appraisal came from the family friend, get an independent appraiser to give you a cost of replacement value appraisal. Insure it for that amount. In 2 years, ask the independent appraiser if costs of diamonds have gone up so much you should get your jewelry reappraised. Or, you may do your own research and decide on your own that costs have gone up so much that reappraisal will be necessary anyway. I was in your position when I first got my ring, and paid up the wazzoo to have it added to my renter's insurance. I won't do that again.

 

[shihtzulover]

I didn't realize that JM doesn't just give you the full insured amount if the diamond/setting can be replaced for less, but I'm definitely not an insurance expert. In any case, we bought our diamond just before the price increase that seems to have just begun, and it seems like reappraisal could be something that might easily slip our minds, or be put off continually. Also, appraisal costs money, too, and given the pretty steep price increases lately, I'm not sure that it would take long to reach the inflated apprasial value that we received.

Of course, I am sure that we will have to have it reappraised at some point, especially if the prices increase so dramatically that even the appraisal amount doesn't cover the true replacement cost anymore. Given the current circumstances though, it seemed to make sense for us to just go ahead and insure it for the greater amount. I'm definitely not saying that this is the best choice for everyone, but just that it was the best decision for us.


So when JM does replace a ring, how does it work? Can the insured work with any jeweler that they choose, or just their original jeweler or one that JM chooses?

 

[neatfreak]

So when JM does replace a ring, how does it work? Can the insured work with any jeweler that they choose, or just their original jeweler or one that JM chooses?

They just worked it out with my jeweler. I think as long as your jeweler is willing to work with them you're fine.

My ring was from ERD originally and it was no problem to go back to him for the replacement.

 

[diamondseeker2006]

Diamond Seeker-

The diamond is a GIA 1.71 RB, I Color, SI1, EX, EX, EX, 58 table, 61.3 depth, with a 1.4 HCA score.

It was listed online for $10,751 1.5 months ago (bank wire price). My jeweler found the actual seller of the diamond and I got it for $10,071. My jeweler took no profit, as she is a very close family friend.

Diamond prices have increased and a quick for similar stones comes up: Blue Nile at $13,095, Abazias at $11,932, and Brian Gavin $12,036.

Thank you for the explanation! This actually gives us a hint of what profit the online vendors make on stones...less than $700 on your stone, potentially.

Reading through the posts did just give me an idea. If your family friend jeweler wrote your insurance valuation, just have her redo it and tell her you want it at $15,000 or whatever.

My conversation with JM was in November or December and they told me they would not insure for purchase price if the insurance valuation/appraisal was higher.

 

[Yimmers]

So when JM does replace a ring, how does it work? Can the insured work with any jeweler that they choose, or just their original jeweler or one that JM chooses?

Neat is right - my wedding band was done with someone else, and JM was fine with BGD doing the new work.

 

[shihtzulover]

So when JM does replace a ring, how does it work? Can the insured work with any jeweler that they choose, or just their original jeweler or one that JM chooses?

They just worked it out with my jeweler. I think as long as your jeweler is willing to work with them you're fine.

My ring was from ERD originally and it was no problem to go back to him for the replacement.

Did you still get to pick your new diamond though?

 

[bts75]

I just told JM what amount I wanted to insure it for. I didn't want to pay for the inflated price. They said no problem. I did leave
a little room for inflation. It didn't make the premium go down a whole lot but it helped.

Wow. I had a totally different experience with JM. I tried to do this exact thing and they said they could not insure for anything other than an appraised value. At that time (and still today); all I had was WF's 'appraisal'. They took that no problem, but it is a lot more then what I paid. It resulted in almost a 20% increase in my premium. If I take the ring to a 3rd party and get it insured for the 'replacement cost', they will adjust my account; but I have don't that yet.. too much to do!

Overall, I was a bit mad that JM just couldn't look at my recent purchase from WF and assume I didn't get some kind of crazy deal and insure it correctly. It really seemed like JM just wanted my money.

 

[ring983]

I have just purchased a ring. Can anyone provide company names that will reimburse rather than replace? I would probably upgrade in the event of loss and would like to apply cash towards that rather than receive an identical item.

I was surprised JM will only replace. I took out a policy with them but will cancel once I find someone to reimburse.

 

[denverappraiser]

JM, along with most insurance companies, are agreeing to replace a lost or destroyed item with another of ‘like kind and quality’ or words to that effect. This means that, in the case of a loss, they will be replacing your item, not cutting you a check for the face value of the policy.

The usual replacement procedure is that the insured (that’s you) will take the description to a jeweler that you’re happy with and they will quote the company a price based on that description. There is a backroom negotiation between the company and the jeweler over what constitutes a reasonable price for a particular job but, in general, they are pretty agreeable as long as it’s below the face value of the policy. When the deal is struck, the jeweler makes the new item, the bill goes to the insurance company less whatever deductable you owe and they call it done.

The companies hire adjusters to process the claim and these adjusters are basically professional shoppers. They know what they’re doing. Their job is to get you the replacement for the best price they can and the amount they pay is NOT a function of what some appraiser thought it was ‘worth’ at the front end. It’s a function of the description of the item and the marketplace. The face value of the policy is the MAXIMUM they will pay, not necessarily the expected amount. That’s what confuses people. If they can replace for $5000 (for example), that’s what they will do, regardless of whether you submitted an ‘appraisal’ that said it’s worth many times that.

When you get an appraisal done, ALWAYS discuss definitions of value. If they give you a value that strikes you as nonsense, ask about it. This is part of what you’re paying them for.

 

[denverappraiser]

I have just purchased a ring. Can anyone provide company names that will reimburse rather than replace? I would probably upgrade in the event of loss and would like to apply cash towards that rather than receive an identical item.

I was surprised JM will only replace. I took out a policy with them but will cancel once I find someone to reimburse.

Chubb offers a cash settlement type of policy although they do have some substantial restrictions on what sorts of policies they will write. Most agents won't write a stand alone jewelry policy with a face value below $50k for example, and some won't do it at all. In most markets, Chubb premiums are 2-3 times what's charged by JM and the replacement companies. I suspect it's largely for this reason.

 

[denverappraiser]

I just told JM what amount I wanted to insure it for. I didn't want to pay for the inflated price. They said no problem. I did leave
a little room for inflation. It didn't make the premium go down a whole lot but it helped.

Wow. I had a totally different experience with JM. I tried to do this exact thing and they said they could not insure for anything other than an appraised value. At that time (and still today); all I had was WF's 'appraisal'. They took that no problem, but it is a lot more then what I paid. It resulted in almost a 20% increase in my premium. If I take the ring to a 3rd party and get it insured for the 'replacement cost', they will adjust my account; but I have don't that yet.. too much to do!

Overall, I was a bit mad that JM just couldn't look at my recent purchase from WF and assume I didn't get some kind of crazy deal and insure it correctly. It really seemed like JM just wanted my money.

Talk to your appraiser. If the definition of the product is as a genuine Whiteflash ACA with a certain set of specs (for example), the question becomes what does it cost to buy a similar genuine whiteflash ACA in the case of a loss. In most cases that's a pretty easy question and, in the case of a recent transaction, you probably have a pretty good feel for the answer. It only becomes sticky if Whiteflash goes out of business and it's necessary to find an alternative supplier with goods of 'like kind and quality'. That starts a negotiation and the details, photos, etc in the description are going to be at the heart of it. In the case of JM, you get to choose pretty much whoever you want and they may or may not be setting their prices the same way that WF does.

 

[nfowife]

I lost my engagement ring 3 years ago. It was insured through usaa on it's own policy (not a rider) called "valuable personal property insurance". The original appraisal was for ~17K. When I lost my ring it was USAA's option to replace it with a like diamond, but because 7 years had lapsed between the appraisal and prices had gone up, they couldn't replace it so they gave us a check.
My advice would be to get a realistic appraisal so you don't pay exorbitant premiums, but to get it reappraised every 2 years or so so you know you are covered.

 

[denverappraiser]

Indeed, time is another tricky problem. Appraisals are, by their nature, giving a value as of a particular date, and it's unlikely that your loss will be on that date. Diamonds have gone up substantially in the last few years and it's common to both get things reappraised regularly and for appraisers to include a buffer in the valuation to accomodate this. The closer you are to the cuff, the more you are likley to find yourself underinsured in the future. Some insurers will aso create an automatic adjustment for inflation. This can be a mixed blessing because it can cause your values to creap up faster than they really should but it does offer something of a solution.

 

[shihtzulover]

What if you have insurance through Jewelers Mutual, and something happens to your diamond, but you don't like any of the possible replacements that are offered? For instance, I have a SI2 right now, but what if I couldn't find another SI2 that I liked? Could I pay the difference to get a SI1 or VS2? Or go up in carat weight, if that's what I wanted to do at that time?

 

[CherryBlossom]

Having recently dealt with this when helping someone, I was told that JM would NOT insure for the purchase price and required using the inflated insurance "appraisal". I salute David Keeling above for stating how I feel about this. I insure things to protect the money I paid for the item. I don't want to pay for insurance at $21k when the item cost $13k because the insurance company is going to be able to replace the item at $13k...adding something for inflation over time. I use Chubb and they allowed me to use sales receipts with lab reports when I wanted to. Plus they will cut me a check for a loss. I only want to pay premiums on what it would cost to replace the item.

Seeing that the vast majority of people never lose or damage their engagement rings, it seems pretty crazy to me to overinsure by 1/3.

To DRE06, unless the diamond was second hand, I'd be very surprised if a regular jeweler really gave you a $1500 better deal than you could get online where profit margins are usually smaller than brick and mortar stores. Can you post the grading report just so we can compare? I'm just curious to see it.

I totally second this and have been told similar things. This is great info