The real jewellery insurance con

Call me Jack.

The long con; a term all of us should be familiar with.  For those who aren't, it means someone is prepared to invest a lot of time to con you in the long run.  The more I write this blog, the more I feel we're all part of a big long con called insurance; whether it be home insurance, car insurance, business insurance, life insurance ... the biggest con of all is jewellery insurance.

I've just had another example of this from a couple who came in today.  They were burgled last year and she lost all her jewellery.  Amongst other things that were special to her were two strings of pearls and a diamond eternity ring.  These items were insured by Barclays home insurance - the valuers were iVal, who this time did a good job in reaching a fair valuation of the claim.  Their insurance values were £3200 for a long string of pearls, around 40 inches long; £2200 for a double row necklace around 18 inches with a gold clasp; and £2500 for a channel set eternity ring with diamonds.  There were some other pieces as well, and they were fairly valued too reaching a total of around £9500 for the claim.

So Jack.  What's the problem?  Where's the con?  You ask.  Hmmmm ... where indeed.  this time, its in the replacements.

Barclays preferred jeweller was actually an internet based jewellery sales site.  They brought a selection of jewellery to the client, who chose replacements from these with the help and advice of the agent from the internet jewellers.  The only thing was, none of it was the same as what she had, so really she wasn't at all happy with it - but she had no choice but to take it under the terms of her contract.  There were no other alternatives made available.

They came to see us on recommendation to see if we could help with another piece still outstanding from the robbery, something which the preferred jeweller nor any other jeweller could help with.  We currently have that in hand.  While they were in the shop, they told us their jewellery insurance nightmare and showed us the other pieces.

To be honest - the long replacement string of pearls were on the money at £3200 - they were good quality akoya pearls ... but they were very poorly matched so they looked like a row of dull plastic balls.  OK, so they were expensive, but this is rather like having a bad Van Gogh - priceless but awful to look at.  As far as we can tell, her original strand was a long 60 inch large white freshwater pearl necklace - cheaper individual pearls, but much better matched, whiter, more uniform and of course the correct replacement.  The other pearls were well overpriced - we would have charged less than a thousand for better examples.  Both strings of pearls were strung hideously - no wonder the poor lady didn't want to wear them ... but now she was fobbed off with them and there was nothing she could do.  The eternity ring was OK, but the diamonds were again poorly matched.  On a later visit she told us that the ring should have been a much wider gold band with bigger diamonds, so this perhaps wasn't ever going to be replaced for the amount valued. The rest of the jewellery was supplied in the same way, again these were reasonable but not the quality of her stolen jewellery or suitable replacements.

Basically, the whole robbery experience had been gruesome for the couple and she was clearly very upset and not at all pleased with the replacements.  It could have been that the jewellery she lost was actually worth far far more than that of the replacements and the quality difference is clear to her - so the valuations were too low.  But we'll never know.

So why does this happen?  

Because the loss adjuster from the insurance company is not a jewellery expert.  Indeed, it would seem that the preferred jeweller has no idea either ... or they were just getting rid of some stuff they had lying around for a few years on the unsuspecting client when she was at a low ebb after the robbery.  This does rather beg the question why people are forced to use vouchers for a specific jewellers if that jeweller hasn't got what they want at all?  Its not what we're led to believe by the insurers in their advertising.  

Here's the horrible truth - if your small print states you have to use the insurance companies preferred jeweller, then there's no way out.  You can ask to use another jeweller or for a cash settlement, but they will only give you a proportion of your claim based on reductions for wear and tear and what they can get by buying in bulk from their preferred jeweller.  This isn't usually enough for you to replace like for like or old for new if you chose this cash settlement which, in our experience can be as little as one third of the estimated value of the vouchers.  Legally, there is no further recourse ... or is there?   This is a subject for another blog I think, but for now ...

Shame on you Barclays for using an online jewellery supplier and not a high quality high street jewellers and forcing your clients to accept things they don't want!

Jewellery Insurance - the nightmare in Norwich Union street 2 - Jack's revenge!

Call me Jack.

Following on from my last post about how much you should get for your insured jewellery loss - to summarise - my opinion was if your jewellery is insured for a certain amount then you are paying the premiums based on that amount and you should get exactly that if your valuation was accepted by the insurer.  Simple really ... but no, apparently not ever that simple.

Again, we had a run in with Norwich Union.  This time, it was a piece of jewellery which we had valued to around £6500 a few years before the loss.  We valued it the way we always do - see my who should be able to value jewellery post for that.  At the time they told us they were insured with Norwich Union and we did mention the problems of this type of insurer versus a specialist insurer such as T H March for example.

OK.  So our client was expecting to get offered £6500.  But Norwich Union had passed our detailed valuation on to a third party valuation service called iVal, who valued this piece just over one third of what we said it was.  Of course, the customer came back to us and questioned the validity of our valuation.  It was easy to get them to understand why, as when we tried to find the main stone we had to go abroad as none of the gem dealers had a replacement in the UK.  We did however get a wholesale price for the stone alone in writing and that came to around the same as what iVal had valued the whole piece at.

This we gave to the customer, with our quote for replacement of the whole piece by us at retail (several diamonds, the main stone, the metal and the work) which came to around 10% over the insured value carried out a few years previously by us.  As we didn't expect the insurance company to use us to replace the item (we are certainly not a preferred jeweller as far as the insurance companies are concerned) we didn't mind telling them exactly what our wholesale value was should we make it for another jeweller to sell at retail - which don't do any more, but we used to so we are well versed with the mechanics of other retailers and their mark ups.

Several months went by and we forgot about it.  Then one day the client returned and said they were still struggling with their insurance claim and could we take it up on their behalf.  We said we would and I phoned Norwich Union.  They had already passed this case on to a third party agent in this case, so I phoned them.  Once we had gotten past the I can't talk to you as you're not the client bit, I asked why their cash offer was so paltry.  The told me they had had two other replacement quotes including ours.  I said I wasn't aware we had submitted a replacement quote - of course the client had on our behalf so this was news to me.

The rather rude agent dealing with the case said we were 3 times as expensive as their nearest quote to replace.  I told him to hold on for a second - how was he valuing this piece, as he had our replacement valuation of the piece, he must also have the wholesale price of the stone from the dealer.  Silence.  "Er.  Yes" he said.  "But we have the full iVal appraisal and the quotes to remake like for like".

OK, so how did iVal appraise a piece they haven't even seen - my partner, the expert in this area, phoned them up and asked to speak to the valuer who had appraised the item.  The conversation was hilarious culminating with my partner asking if the valuer was actually a gemologist and knew the difference between an "x" version of this stone and a "y" version.  The valuer was stumped on both questions and refused to answer - we took that to mean she wasn't qualified to make this determination at all.  This was pointless.  We looked her up on their website.  She was in training.  Their website has mysteriously vanished at the time of writing this.

So, back to the third party agent in charge of the case.  "Who's going to make this at those prices then" I asked.  "Signet (H.Samuels, Ernest Jones) or Goldsmiths"  he said, gleefully, as if he'd scored a hatrick against me.  "Where?" I asked.  "Erm ... In their workshops".  His glee turned to gloom as I explained the facts about both these companies.  They, like many high street jewellers have all their manufacturing outsourced to the Far East.  "so you reckon the quality will be as good as the original made in the 1930's by an English jeweller then?"  I retorted.  "Well. Yes ...  Oh, I don't know I'm not the jeweller am I".  He knew he was defeated.

We ended up remaking the item for the client, at our wholesale price to the insurer. The client agreed to take a lesser value stone of the the same quality and slightly less diamonds of the same quality and to pay a proportion themselves to make up the value to something achievable.  They were happy with the result.  To be honest, we didn't really cover our time satisfactorily, but at least we scored a few points against the insurers.

Not really what you would call a complete victory, but nevertheless it got the point across that insurers were on a sticky wicket when it comes to these sorts of valuations and offers.  this was back in 2007.  In 2008 at the Loughborough Insurance Conference, these points were raised and it was informally agreed that forcing the clients to use only the preferred insurer is morally wrong but as yet not legally tested.  I'd like to think we had some influence on this, though judging from the number of incidents cited on the internet, our cases are few of many and still insurers pressurize customers into using preferred jewellers.  Here is a 2007 example on a forum

Shame, shame on you Norwich Union and iVal.

UK Jewellery Scammers - time to name and shame

Call me Jack.  I'm a bespoke jeweller in a small town in the UK where I have a shop in the high street.  We are one of the few remaining jewellery manufacturers and we specialize in pearls and rare precious and semi-precious stones and have over 30 years experience in making and valuation of all jewellery.  Additionally, my partner is considered one of the foremost authorities in the field of jewellery history.

So, what prompted me to write this blog?  Its not actually to promote us in any way and the mere fact that I want to remain anonymous is because what I'm about to reveal to the unsuspecting British public would likely get me blacklisted from every jewellery association in the country;  a bit like the "masked magician", if anyone has seen that.

But I don't feel this should be kept under wraps any longer.  Not that I should care what they think - we don't base our business on ripping off our customers, so it probably wouldn't matter that much - still, I like to be anonymous - it gives me a kind of ghostly leverage over those who seek to swindle and perform atrocious acts of daylight robbery.

Thats enough of me.  So what am I talking about?  Jewellery of course, in the more general sense, moreover knowledge and jargon - the science that blinds the public into buying expensive stuff that is way overpriced from high street chains, independent shops, e-shops or even market traders just because the guy behind the counter knows a bit more about the jargon and hides behind a facade of trade secrets that make you, the customer, totally vulnerable to being taken in and sold goods that are simply not worth 5% of what you have paid for them.  

Even huge, reputable (we all assume they are) companies get involved in this terrible mis-selling ... though I suppose I can't be sure they really understand that they are at the root of these dreadful acts as they themselves may be taken in - but I am sure they know a good deal when they get one and they are benefitting from your misfortune at the hands of unscrupulous rip off merchants in posh suits and very expensive shop fits.

These are the "rogue traders" of the jewellery profession and I'm going to name and shame if I find evidence of deceit.  Watch this space!!