Jewellery Insurance - the nightmare in Norwich Union street

Call me Jack.  Heres one of our jewellery insurance nightmares - this time I'm going to name and shame.

A client of ours came to us in tears.  She had a silver wedding ring made by a collectible artist jeweller in the 70's, a one off piece, and it was lost.  She had insurance with Norwich Union, who were sympathetic with her but pointed her to their preferred jewellery valuers and replacement partners, Goldsmiths, who can be found on pretty much any high street.

She went to them, picture in hand with the name of the maker and a description of the ring.  They gave an independent valuation of this ring at £10 (yes, you read it right - ten pounds).  Now, you might be able to buy a silver ring off the market for a tenner.  You may even be able to go to some shops and get one.  But I can assure you that you wouldn't be able to pick up any ring in any metal second hand by this highly collectible artist for less than £400.  However, both Goldsmiths and Norwich Union were completely immovable, and offered only a silver wedding band from their range at around £60-80 as a replacement.

Following over a year of battling with Norwich Union and Goldsmiths, she finally gave up and came to us.  We wrote to Norwich Union on her behalf, who promptly wrote back consolidating their position - this ring was only worth what Goldsmiths had valued it at, so she could only choose a ring from them to the rather generous value they had offered as a replacement.

We, of course, wrote back with several examples of prices of this artists work, and indeed even a quote from the artist to replace this ring, which the artist clearly remembered making as they had a nice picture on file.  The price was over £1000.  Still Norwich Union did not budge, until the client threatened legal action - then they were all of a sudden more reasonable, a new ring was commissioned and our client was at last happy, even though she had to endure over a year's worth of stress and disappointment at the hands of Norwich Union and their preferred partner, Goldsmiths.  Shame on you both!!

Is this uncommon?  It would appear not.  We have intervened on several cases involving Norwich Union.  So, what's the problem?  Why won't they replace like for like?  Well, you'd hope that Goldsmiths would know what they are doing, wouldn't you?  But the fact is, neither insurance company nor preferred jewellers have any idea of the value of quality, designer maker jewellery (I don't mean Gucci, Bulgari or Tiffany - I mean highly collectible non production line jewellery by celebrated innovators of the craft).  Goldsmiths and many other high street brands, whilst producing reasonable quality jewellery, have all their stock made abroad - yes, cheaper labour costs in the Far East and the likes.  Shiny stuff - no interesting surface textures or individuality, plain, featureless, one of many copies, but functional ... and only really worth the intrinsic value of the components used in its manufacture after you have walked out of the shop with the bag.  I don't want to belittle anyone who likes this kind of jewellery - its important that everyone be happy with their jewellery and of all the high street brands Goldsmiths are one of the better ones.  Neither am I trashing Goldsmiths' reputation here, I am simply relaying an event where their experience falls well short of the acceptable mark and explaining why.

Anyway, that's the key - the intrinsic value of the components; which in the case of our clients silver ring was a tenner, including the cost of the metal, the carriage, the labour and of course the dreaded VAT.  The rest, of course, is what we in the trade call mark up.  I'll leave that to your imagination.  And why don't these Insurance companies just let you choose which company or shop you would like to use to replace your loss?  Because the preferred jeweller is giving them a preferred price.

The moral of the story?  CHECK YOUR POLICY WORDING.  Some insurance companies are still forcing this on their customers even though it is not considered morally correct any more.  You can force them to give you cash, but usually this will be a reduced offering based on age and wear and tear of the piece - hence the valuation at £10 in our example above.  So much for "old for new" then.  Watch out, there's a scam about!

I'll tell you another one in the next post.