Jewellery Insurance Claims

By Paul G Wright

Thinking about the possibility of a theft or loss of a favourite piece of jewellery is certainly not pleasant, however the possibility cannot be ignored. So often victims of a theft or loss find that claiming on their insurance is complicated and unsatisfactory. Insurance companies have an extraordinary ability to 'wriggle' when it comes to claims and the small print all of a sudden becomes far more important than it seemed at the time of signing the original contract.

How often do we hear that a victim of theft has been unable to claim compensation for a loss because the circumstances did not qualify the 'terms of the insurance policy', or that the amount paid out was not nearly enough to find a comparable replacement for the item lost. Then there are the insurance companies who refuse to pay out for the loss in cash, instead insisting that the customer must purchase jewellery to the value of the loss from 'associated' jewellery stores - many of which may stock jewellery that the claimant feels is inferior to the treasured item that was lost.

Much of this frustration can be avoided by taking a few simple, precautionary steps in advance of any unfortunate incident which may result in the necessity of making an insurance claim. Firstly, when purchasing jewellery, always ensure that you are provided with a purchase invoice or receipt. Check that the store selling you this jewellery provides a clear and detailed description of the goods purchased. This should include the type and grade of precious metal used including its weight. Any gemstones should be detailed with the quality, grades and weights. Finally the price must be stated preferably also showing the original shop price if a discount was given. This receipt must be safely retained in a filing system at home so that it can easily be found if a claim should become necessary at some date in the future.

It is not sufficient simply to have an original purchase invoice to identify and prove the value of a treasured item. As the years roll on the value of that item is likely to steadily increase. In order to maintain a clear idea of the value of the jewllery to be insured it is vitally important to maintain a current valuation. The value of the insured jewellery should be updated regularly every three to four years by a qualified jeweller. In the case of a loss the insurance valuation will have two important purposes:

• Firstly the detailed description will enable the police to clearly identify your lost jewellery if it is recovered. Without this proof the police are sometimes unable to return jewellery to 'a rightful owner' because it cannot be proved that the jewellery is actually theirs. The detailed weights and measurements, along with photographs, contained in a valid valuation leaves no room for doubt when identifying recovered items.

• Secondly a current valuation will enable you to check you have adequate insurance cover and that in the case of a loss the insurance company pays you out an amount that is realistic and up to date.

Unfortunately not everybody is as well prepared as this. What happens if you incur a loss and can't find the original purchase receipt or what if you never obtained a valuation certificate for the item?

All is not lost .. but be prepared to act quickly before submitting your claim to an insurance company! Find whatever information you DO have for the lost jewellery including any family snapshots etc that may help. Then approach a qualified jeweller and ask for a 'post loss valuation'. With the information you are able to supply the jeweller can build up a picture of the lost item and in this way produce a detailed valuation certificate based on the details you can remember. Insurance companies will normally accept a carefully constructed post loss valuation, produced in this manner, and it means that you do not leave yourself open to an unrealistically low valuation when your claim is eventually settled.

One of the biggest frustrations for insurance claimants is when insurance companies issue 'vouchers' for replacement jewellery. This imposes a serious restriction on finding a suitable replacement for the item lost. For example how can a treasured antique heirloom be replaced in a 'High Street' jewellery store belonging to one of the large multiples? Quite simply it cannot and for this reason the Insurance Ombudsman has made a ruling stating that, in principle, this is wrong. I can quote from the Insurance Ombudsman Bureau Report (1987 and restated in 2003):

"The option to replace jewellery is not properly exercised by offering a policy holder an authority to buy jewellery up to an agreed value at a particular jeweller's shop. That is wrong in principle, although it seems to have become a hallowed practice. It is in fact a denial of true indemnity."

AR(87) p.31

In a great many cases in which I have been asked to help with a claim, the claimant has received more favourable treatment once this ruling had been pointed out to Insurance Companies offering 'vouchers'. It is worth retaining a copy of this ruling should you need to quote from it in the future!

It is hoped that, with some forethought and a little planning, at least some of the distress and frustration of sustaining a loss can be avoided. The simple steps outlined in this article will prevent much of the pain and hopefully result in a more suitable jewellery replacement should the worst happen. When in doubt always seek the advice of a professional.

As a small family run business Paul Wright Jewelley has exhibited its handcrafted silver and gold jewelery throughout the United Kingdom since 1995. Paul Wright Jewellery offers a full jewellery valuation service and helps claimants with important claims. His website is Diamond Wedding Rings