Jewellery Insurance - is it worth it? Or is it a scam?

Call me Jack.

Most people think that if they insure their jewellery "all risks" as a named item on their home insurance, then everything will be hunky dory.  I'm sure there are a lot of cases where this is OK, but we have been involved with sorting out some real insurance nightmares.  I'd like to talk about some of those this week.  And yes, we will be naming and shaming where appropriate.  Before I share these experiences with you though, I'm going to give you a brief summary of what happens when you get your jewellery insured.

As a small specialist shop with a wealth of experience in making all sorts of jewellery, we do have quite a few people coming in to ask us for insurance valuations.  Of course, you can go to any jewellers and ask for insurance valuations and they will happily carry that out for you from their experience of being in jewellery retail.  To be honest, if the item you bring in is within their scope, like a gold ring or a watch, then there shouldn't be any problem at all with their assessment of its value.  Or maybe you have purchased something and you have the receipt and perhaps even a certificate of value but you didn't take out any insurance from the jeweller (we'll get to these later) as you were going to insure with your own insurer.

So, you have your valuation done and you are charged their fee (we'll come to fees later as well) - then you go home and phone your insurer, who is generally quite pleased to charge you an additional premium for insuring your new or valued jewellery.  Do they ask who did the valuation or expect a copy of the receipt/valuation?  Rarely.  Its usually up to you to keep those safe and make sure they are accurate so you are not under or over insured.  We wouldn't want to be charging you too much for your premium on your over insured jewellery now would we?  Clearly not - they wouldn't do that ... or would they?

The answer to that would seem to be a resounding "YES".  Non specialist insurers are perfectly happy to charge you ridiculous premiums for seriously over-insured jewellery and then pay out less than the insured amount because its over insured.  Likewise, they are also happy to let you go under-insured as well - but check out your small print, because this could constitute an acceptance that you are prepared to take on a percentage of the risk yourself, so subsequent pay outs are capped or reduced by the percentage under-insured you are. 

How do they come up with this evaluation of your insured loss after you have lost it you ask?  Well, that's easy.  They have those really experienced "loss assessors" don't they!  You know, those guys and gals that can value a tiny item from your description of it, or a photo of you on the beach wearing it, or the handwritten one line valuation that you paid your local jeweller to do for you saying "18 carat gold diamond ring of good quality - 0.75 carat diamond with excellent colour - replacement value £9750" (yes, we have seen these valuations).  "Ah Ha!" They say.  This ring is valued by our qualified NAG (National Association of Goldsmiths) valuation expert at £3750, so we'll offer you that in cash because its over insured - or we can give you £5000 vouchers to spend in X jewellers cos we're feeling generous and you have been rather silly now, haven't you?  Tsht!  £9750, how can it be worth that?

AAAAAAAAAAARRRRRRRRGGGGGGGHHHHHHHH!!  Your screams can be heard for miles.  How could this happen to me?  I'll explain in the next installment - and then I'll name and shame with examples of some we've seen