Jewellery insurance - jewellery valuation scams

Call me Jack

Well - a new client has asked us to value and set a diamond for her. It is quite a nice pink diamond which she bought from a direct source at what we would consider a keen price since the diamond came from the Argyl mine in Australia. Anyway, that isn't the interesting bit - what is interesting is that before finding us she went to her local jeweller and asked them to, firstly, value to stone, and then for a quote to set it (she didn't get as far as the quote though).

The local jeweller sent the stone off to their (we assume) NAG approved valuer who kept it for nearly a month while they attempted to put a value on the stone (apparently the most experienced valuer was ill was the excuse). When they did eventually manage to come back with some sort of value, it was verbal and somewhere between £1000 and £10,000. Nothing like leaving yourself a margin for error is there?? Indeed the actual written valuation seems to not note the diamond's source and values the stone at £12000. She was charged £50 for this. Needless to say, the customer wasn't very happy, which is why she came to us.

She told us this story, and also that during the attempt to value to stone they had called another shop which she had previously used to make a few jewellery repairs. They use small sticky labels on their packaging, just the sort that are really useful to secure small packages, which is exactly what she had re-used it for on the diamond package (called a wrap) to secure the diamond so it didn't fall out. Apparently, the shop had put 2 and 2 together and remembered that she had mentioned a loose pink diamond a couple of weeks earlier so they called her to let her know - the worst part of this story is what they told her.

I seems the valuation company had got someone (assume one of the valuers, a lady actually) to call the shop whose sticker was on the package and said that they had bought this particular diamond from them and would like to buy another - how much would that cost? Of course, the bewildered shop assistant had absolutely no idea what she was talking about and, naturally, asked how much she had paid for that one ... to which the reply was "no actually, lets start again, I'm a valuer and want to get a retail value for this diamond for insurance, so how much would you sell one like it for" . Bearing in mind this is a cold call to someone asking very specific questions about a reasonably rare stone, the shop found this quite irregular and probably reminded her that she was the valuer.

So what are these valuers up to? Its hard to say isn't it. Clearly they had absolutely no idea what they were doing and, after a month of fumbling, were clutching at straws. The point is - valuations on jewellery are like valuing houses. Many factors come into play, and you have to really know your market to make a good appraisal of the worth of an object. For this you need some experience and some training. Like I have pointed out in other posts, the training to become a jewellery appraiser isn't as vigorous as say, the Royal Institute of Chartered Surveyors (since we were likening it to property valuations). Most valuations are easy and have easily accessible data (like a makers mark, a year and and assay stamp of metal and approximate carat weight of stones) which makes them easy to find a replacement cost - with a couple of months doing the job a junior assistant could potentially do this. Some are not as straight forward and require more specialist knowledge and it is these that end up totally bamboozaling the registered valuers. Problem is, they don't admit their inadequacies and undervalue or overvalue the item causing major problems should it go missing or get damaged.

But is it too much trouble to ask the owner of the piece a few questions instead of calling round all and sundry and making yourself look like a fool? It didn't take us long to put a value on the stone, actually about 5 minutes since it had a clear certificate and a reference number which when we accessed it told us everything we needed to know. We also asked the client where it came from, which she was happy to tell us, that she got it from Australia - so there is only one place for a possible source, the Argyl mine. We have dealt with these types of diamonds before and this one was good quality and was worth towards the upper end of the very wide margin the first valuer had put on it verbally.

In this case, the diamond has been seriously overvalued to the tune of around 30% which means that year on year the customer could be paying 30% more than they need to for premiums and, indeed, would unlikely to be offered a cash settlement for the diamond at £12000 despite paying the premiums for that amount.

All seems like common sense to me - watch out, there are professional scammers about taking your money and putting you at risk of insurance losses through their own lack of knowledge.

The Nightmare on Norwich Union Street 3 - iVal returns

Call me Jack.

Again, we are back in Norwich Union Street. This time iVal got it soooooooo wrong.

A couple of years ago, a lady bought a necklace from us by a Danish designer. This designer isn't that well known, but her jewellery is quite exclusive and can be expensive. Its all hand made and mostly one off pieces. The item in question was a large natural pearl simply mounted in a 22ct gold bezel as a pendant and put on a long thick snake chain in silver. The purchase price would have been around £200. now, as a result of the strength of the Euro and increases in gold prices, a replacement would cost say £275-300 ... thats if we can get one for her from the designer. If we make one for her, it will be at least £225.

OK, so not alot of money in jewellery insurance terms, but enough for an individual - and of course, stolen. So Norwich Union pass this over to iVal who value it at £23.

C'mon iVal - this is totally unreasonable. £23 wouldn't even replace the chain, yet alone the gold bezel mounted pendant. When will these people get it right? And why don't they?

Well - it would seem that they have a conflict. A few posts back I asked who should be allowed to appraise jewellery for insurance. I said that any organisation with an affiliation to the insurance company was a conflict of interest to the customer - you would have though that anyone affiliated to the jeweller would be baised against the insurer (giving higher valuations to pass these on to their parent jeweller) ... iVal is actually part of Goldsmiths the high street jewellers.

So why is this such a mess?

The truth is, no-one has really got any control over the insurers. Oh yes, they have a code of conduct and are answerable to the FSA in some cases but that doesn't seem to count for much. Only today we received a note from our insurers saying that our premiums were going to increase due to more thefts and pay outs and the lack of police action when jewellery is stolen. The last time I looked we are all paying for not only the right to the police action when our things are stolen but also due care when things are valued for pay outs ... only we're not getting it - any of it!

The upshoot of all this is that the industry remains unregulated, unprofessional and full of thieves - not dissimilar to politics then, eh?

Jewellery insurance - Who should be approved to value jewellery for insurance purposes?

Call me Jack.

Jewellery valuation - what a crock!  The guys doing it at the moment generally have no idea.  So who should be able to carry out jewellery valuations for insurance purposes?  Let's list the possible bodies:

1.  The insurance company?  There would be a real conflict of interest here - so - not them or anyone on their payroll.

2.  A qualified gemologist?  This person should be employed in the process as they can accurately appraise the stone(s) in the jewellery.  But, whilst they may also have other skills or experience, they are primarily concerned with the quality of gems and perhaps have no idea of the value of them.

3.  A  jewellery maker?  This person would be able to tell you exactly how much it would cost to replace a piece a wholesale prices and would give you a quote to replace, in the same way you would get three quotes to replace windows in your house.  This is a fair appraisal of the wholesale value of the piece if you get three quotes assuming they are all providing the same quality of materials.  But, in general, they won't necessarity be able to tell you the value of antique, vintage or collectable jewellery or have experience in retail mark ups.  So they will play a part in my opinion.

4.  The retailer?  For standard pieces, like a standard design certificated 1 carat diamond ring.  Yes, they will be able to tell you exactly what THEY would replace this at.  So, again, the cheaper of three quotes would be acceptable.  But in the case of something they have no experience in, then unless they have another string to their bow, they are out of the picture entirely.  Also, the possibility of price ringing by the major chains is going to eliminate jewellers who are just retailers.

5.  A qualified valuation expert?  Well, you would have thought so, wouldn't you?  But read missmarketcrash's blog (link available on my gem of tanzania post) about this.  Often these people are not as highly qualified as you would expect and have no experience beyond their rather short training.  Yes, it could be said that their valuation is THE valuation, but in our experience (and we have several instances where we have vehemently disagreed), they can be all over the place when presented with less common items.  Please comment on this one.

6.  Antique  and vintage jewellery dealers?  Hmmm ... yes.  You will really find out how much they will pay for your piece, and they are surprisingly accurate amongst themselves as to what that piece is worth.  These people are really at the sharp end.  They know what they can get for the pieces so that defines their "worth" outside of the retail price.  But there it is, most insurers work with retail prices, so whilst in my opinion the value given by the dealers gives you a fair idea of the second hand trade price, it bears no relationship to a retail price charged on the high street.

7.  The jewellery historian.  Again, these people are not retailers - but some of them buy in their specialist area at full price from dealers in the trade - so they will know what these pieces are worth should you be lucky enough to be able to find one secondhand.  Then its a case of condition and so on.  So there will be a place for their expert advice in a valuation.

So who then can do all this?  Well, they don't really exist.  That's the problem.  I can only tell you how we do it.  Read on.

As a manufacturing jeweler in the UK who also retails, we know the cost to replace the components of the piece of jewellery and the amount of time chargeable to make it. We then come up with a "wholesale price" on that jewellery and then we apply a fair retail mark up and hey presto, you get a replacement value (in a fair market - perhaps if you went to Boodles then you would be paying more, but surely that's your choice as, despite the hallmark, the piece would likely NOT be worth more to your insurer than the replacement value of their preferred supplier when you walk out of the shop with it).  Also one member of our partnership is considered one of the most knowledgeable jewellery historians on the planet, so anything which has a value based not only in intrinsic components gets the fair increase befitting it.

I'm not saying this is perfect, but it should be a basis upon which to start this incredibly complicated process of valuing jewellery.

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.

Jewellery insurance - how much is enough?

Call me Jack.

Here's something else which annoys me, those companies insuring "old for new" (check your policy wording).  Surely if you get a piece of jewellery appriased at, say, £5000 by a reputable and qualified NAG jewellery valuation expert, then if you lose your insured jewellery you should be offered your replacement at exactly £5000 if it can be replaced? (to my mind that means by finding another piece by the same jeweller to that value or having the piece remade by a jeweller of your choice; the insurance company paying exactly £5000 to that jeweller and you providing more funds if necessary).  

Lets say you can't replace this piece like for like as another does not exist. Then surely you're entitled to receive £5000 in cash if you decide that is what you want.  Perhaps you don't want to replace that piece of jewellery because it has sentimental value which can't be replaced, or that it was an antique piece, an heirloom, which you want to replace with something else.  The point is you paid the premiums for £5000, surely you should get £5000?  Am I being thick here?

Here's someone who subscribes to the insurer's way of thinking - click here to see it - Is he actually saying what I think he is? The high street jeweller is really selling you an item for £5000 when its actually only worth £1750 the next day as that is what the insurer will give you in cash if you don't accept their preferred jewelers vouchers? Oh, and that's OK cos the whole reduction idea is built into the premium? I think if its really like this guy says, which it appears to be, then what's the point of an insurance valuation or the insurance? Its clearly all a con! Somebody do let me know because I'm losing the will the live here!

Jewellery Insurance - the nightmare begins

Call me Jack

Last time we talked about how to get your jewellery valued for insurance and the problems associated with these valuations - to get the full story, its going to be a bit lengthy, so bear with me.  I mentioned the fees that might be involved to get this valuation.  Here's an example

We had a customer in our shop in 2005 who had a ring valued by another local jeweller.  This ring was Georgian, so around 200 years old.  It had a centre diamond of around 0.8 carats and 7 flanking diamonds set in a cluster around 0.35 carats each - approximate total diamond carat weight of around 3cts.  The metal was platinum.  She wanted to sell it and was looking for £6000 cash because the other jeweller had valued it at £11,800.  We could only offer her £1500.

When asked why, we told her the ring was a "marriage" between two ring styles, the original Georgian base and a complete mess of a repair perhaps carried out in the early 20th Century.  Whilst the centre diamond was likely original, all the other diamonds had been replaced during the life of the ring with extremely poor quality mixed cut diamonds.  If the ring had been pristine, it might have been worth around £10-12,000 at auction, but in its current condition, it might not even have made £2000 at auction.  She, of course didn't accept this offer and was really annoyed and upset when she left (no doubt blaming us and not the other jeweller).  So why did the other jeweller value the ring like he did?

The answer is simple.  When you value a piece of jewellery, it shouldn't be a case of just taking 5 minutes looking at hallmarks or stones and coming up with a figure.  There is a certain amount of research into the piece.  Sometimes this is quite easy, using the internet to compare prices and trade tools like the Rapaport diamond report (up to date wholesale diamond price list) and then your knowledge to identify pieces as to what age they are, etc.  You might need to take photographs, etc as well and write a full report for the customer if the item is rare or collectible or has an intricate design which can't be described.  

Here's the nitty gritty - A valuation takes anywhere between 40 minutes for a new piece of jewellery and 5 hours of actual work and maybe even a few months of down time waiting for information  for really complicated valuations.  The average cost per piece is a minimum of approx £50-70 + VAT as of time of writing (2009).  For most pieces, especially really expensive pieces, the valuer usually wants this fee and up to 2% of the value placed on the item.  In fact, many unscrupulous jewellers will simply charge 1% of the value of the item with a minimum of whatever their hourly rate is, say £55 - or they may send it to a valuation expert, NAG (National Association of Goldsmiths) qualified who will charge them, and then they add their, say, 1% of the value + a nominal fee.  Basically what I'm trying to say is there are no rules or guidelines.  As long as the jeweller is insured to do valuations, then they don't need any experience or knowledge to do them, just a piece of paper and a pen.

So, back to our example of the poor unsuspecting member of the public who got scammed by the other local jeweller.  It might have been that he didn't know the ring was a complete mess and had no value beyond the components at scrap, but we doubt that very much.  He saw an opportunity to charge 1% of the value of the item instead of a minimum charge which should have been levied.  He charged her £150 + VAT for the valuation, which was simply a one paragraph statement (no picture and no provenance) and the value simply stated as "antique".  We would not have taken the work on in good conscience as we know the value of the ring did not need to be appraised at all - just estimated which we would have done verbally for free with an explanation as to why.  The most we charge for single straight forward valuations is £70 + VAT. This is in line with current NAG experts.  No naming and shaming here as its too close to home, but needless to say this isn't the only valuation we've seen from this jeweller which is well inflated.  How can an insurance company insure a piece of jewellery valued by this jeweller?  But they do - and then you are over-insured and paying the premium for that.

The second example is that of pieces that have been made by a jeweller who is now very collectable or important for whatever reason.  We had another customer in the shop who had lost her wedding ring, a silver one, made by a renowned artist jeweller who had won several awards.  The ring had never had a valuation certificate and had been bought some 30 years ago for £45.  She had the name of the jeweller and a good picture.  We identified the piece as being definitely in the style of this jeweller, who we knew personally, so we were surprised when we discovered that the insurer had offered £10 only for a replacement (in Goldsmiths), especially since a silver ring by this jeweller was now worth well over £1000.  As the lady in question was very upset by this situation, we decided to intervene and we called the jeweller and asked if she would make another ring for the client, who had lost hers.  She was no longer officially working, but she said she would do it as a favour to us.  The cost of the ring at trade was some £900, we added a nominal fee for our time and the insurance was forced to comply as the lady was insured to £1000 for non specified losses.  Just as an update, sadly we have now lost this celebrated artist and her pieces are now fetching £3000-4000 at auction, so any valuation would have to reflect this.  Of course, at the time this ring was actually covered by her no specified items cover, but now it would have to be specified and there can be no direct replacement for the ring as it is a one off piece, so the fact that it is irreplaceable may be something she would want to be properly insured for.

When valuing anything, knowledge is king.  If you take your antiques to the antiques roadshow, generally they know something about what you have as they have several experts in specific fields who can advise on what they are and how much they will get at auction for something similar.  Jewellery is usually a more complex genre where there are several experts in single disciplines who may need to be involved to value one piece so a valuation can require more than one opinion or someone with a deep and broad experience.

The moral of this story is - 99% of high street jewellers have no place in valuing items for insurance purposes or otherwise.  Often an antiques centre will do a better job in 5 minutes because they will actually offer you a price for the item on the spot AND you won't get charged for that information.  Now there are no guarantees unless you get the item appraised properly ... but even that is a real issue, as often the NAG approved valuers often get this wrong on complicated pieces.  So the basis for insuring jewellery in this country is flawed at the most basic level and its you, the public, that suffer.

You will find more examples like these on this blog.

Jewellery Insurance - the nightmare begins

Call me Jack

Last time we talked about how to get your jewellery valued for insurance and the problems associated with these valuations - to get the full story, its going to be a bit lengthy, so bear with me.  I mentioned the fees that might be involved to get this valuation.  Here's an example

We had a customer in our shop in 2005 who had a ring valued by another local jeweller.  This ring was Georgian, so around 200 years old.  It had a centre diamond of around 0.8 carats and 7 flanking diamonds set in a cluster around 0.35 carats each - approximate total diamond carat weight of around 3cts.  The metal was platinum.  She wanted to sell it and was looking for £6000 cash because the other jeweller had valued it at £11,800.  We could only offer her £1500.

When asked why, we told her the ring was a "marriage" between two ring styles, the original Georgian base and a complete mess of a repair perhaps carried out in the early 20th Century.  Whilst the centre diamond was likely original, all the other diamonds had been replaced during the life of the ring with extremely poor quality mixed cut diamonds.  If the ring had been pristine, it might have been worth around £10-12,000 at auction, but in its current condition, it might not even have made £2000 at auction.  She, of course didn't accept this offer and was really annoyed and upset when she left (no doubt blaming us and not the other jeweller).  So why did the other jeweller value the ring like he did?

The answer is simple.  When you value a piece of jewellery, it shouldn't be a case of just taking 5 minutes looking at hallmarks or stones and coming up with a figure.  There is a certain amount of research into the piece.  Sometimes this is quite easy, using the internet to compare prices and trade tools like the Rapaport diamond report (up to date wholesale diamond price list) and then your knowledge to identify pieces as to what age they are, etc.  You might need to take photographs, etc as well and write a full report for the customer if the item is rare or collectible or has an intricate design which can't be described.  

Here's the nitty gritty - A valuation takes anywhere between 40 minutes for a new piece of jewellery and 5 hours of actual work and maybe even a few months of down time waiting for information  for really complicated valuations.  The average cost per piece is a minimum of approx £50-70 + VAT as of time of writing (2009).  For most pieces, especially really expensive pieces, the valuer usually wants this fee and up to 2% of the value placed on the item.  In fact, many unscrupulous jewellers will simply charge 1% of the value of the item with a minimum of whatever their hourly rate is, say £55 - or they may send it to a valuation expert, NAG (National Association of Goldsmiths) qualified who will charge them, and then they add their, say, 1% of the value + a nominal fee.  Basically what I'm trying to say is there are no rules or guidelines.  As long as the jeweller is insured to do valuations, then they don't need any experience or knowledge to do them, just a piece of paper and a pen.

So, back to our example of the poor unsuspecting member of the public who got scammed by the other local jeweller.  It might have been that he didn't know the ring was a complete mess and had no value beyond the components at scrap, but we doubt that very much.  He saw an opportunity to charge 1% of the value of the item instead of a minimum charge which should have been levied.  He charged her £150 + VAT for the valuation, which was simply a one paragraph statement (no picture and no provenance) and the value simply stated as "antique".  We would not have taken the work on in good conscience as we know the value of the ring did not need to be appraised at all - just estimated which we would have done verbally for free with an explanation as to why.  The most we charge for single straight forward valuations is £70 + VAT. This is in line with current NAG experts.  No naming and shaming here as its too close to home, but needless to say this isn't the only valuation we've seen from this jeweller which is well inflated.  How can an insurance company insure a piece of jewellery valued by this jeweller?  But they do - and then you are over-insured and paying the premium for that.

The second example is that of pieces that have been made by a jeweller who is now very collectable or important for whatever reason.  We had another customer in the shop who had lost her wedding ring, a silver one, made by a renowned artist jeweller who had won several awards.  The ring had never had a valuation certificate and had been bought some 30 years ago for £45.  She had the name of the jeweller and a good picture.  We identified the piece as being definitely in the style of this jeweller, who we knew personally, so we were surprised when we discovered that the insurer had offered £10 only for a replacement (in Goldsmiths), especially since a silver ring by this jeweller was now worth well over £1000.  As the lady in question was very upset by this situation, we decided to intervene and we called the jeweller and asked if she would make another ring for the client, who had lost hers.  She was no longer officially working, but she said she would do it as a favour to us.  The cost of the ring at trade was some £900, we added a nominal fee for our time and the insurance was forced to comply as the lady was insured to £1000 for non specified losses.  Just as an update, sadly we have now lost this celebrated artist and her pieces are now fetching £3000-4000 at auction, so any valuation would have to reflect this.  Of course, at the time this ring was actually covered by her no specified items cover, but now it would have to be specified and there can be no direct replacement for the ring as it is a one off piece, so the fact that it is irreplaceable may be something she would want to be properly insured for.

When valuing anything, knowledge is king.  If you take your antiques to the antiques roadshow, generally they know something about what you have as they have several experts in specific fields who can advise on what they are and how much they will get at auction for something similar.  Jewellery is usually a more complex genre where there are several experts in single disciplines who may need to be involved to value one piece so a valuation can require more than one opinion or someone with a deep and broad experience.

The moral of this story is - 99% of high street jewellers have no place in valuing items for insurance purposes or otherwise.  Often an antiques centre will do a better job in 5 minutes because they will actually offer you a price for the item on the spot AND you won't get charged for that information.  Now there are no guarantees unless you get the item appraised properly ... but even that is a real issue, as often the NAG approved valuers often get this wrong on complicated pieces.  So the basis for insuring jewellery in this country is flawed at the most basic level and its you, the public, that suffer.

You will find more examples like these on this blog.

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