Insuring jewellery

It's traumatic enough losing your jewellery without having to worry about insurance problems as well.
 
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01.Check your contents insurance

Diamond ring

It’s a good idea to check your contents insurance policy to make sure you have the right cover in case your jewellery gets stolen.

Each year the Insurance Ombudsman gets a large number of complaints from consumers unhappy with their claims for stolen jewellery. This frustration is backed up by our studies. In our 2011 survey of home and contents policies:

  • About three-quarters of the policies say they will not provide cover (although some review on a case-by-case basis) if the thief enters with the owner’s consent.
  • Only four policies fully cover items over $3000, and about 45% of the policies have an item limit of $1000.

See how your policy compares in our home and contents insurance report.

To get your jewellery properly covered, you need to specify each item on your policy. This costs extra but isn’t necessarily expensive. With your contents policy, you can also take out optional cover for valuables away from home.

To make a claim, you usually need to supply proof of ownership. It’s a good idea to get a valuation from a registered valuer — tell them the valuation is for insurance purposes and where you’d shop to replace the jewellery. Shop around for the valuation, as there are big differences, especially for expensive jewellery.

Since insurers buy large amounts of jewellery each year, they get a big discount from suppliers and therefore may offer you a store credit at their preferred jewellery store instead of a cash settlement. If you’ve a specific jeweller you’d like to go to instead, your insurer may agree. If you’d prefer a cash settlement, the insurer might agree, but only offer you the wholesale value.

Case study 1: No sign of forced entry

George* (not his real name) says: “We discovered on the weekend we were surreptitiously burgled. The thief stole a lifetime collection of valuable gold and diamond jewellery conservatively estimated at $20,000 in total. I found out the maximum my insurance will give me is $4,900 (minus excess) – much less than my loss,” George said.

George did most things right; his insurance was up to date, the jewellery was stored away safely, he filed a police report as soon the loss was discovered, he had photo evidence and even valuations. The problem occurred because most policies place limits on high-value items, unless you specifically apply for a higher limit. Doing this will probably affect your premium, but in the event of a claim, it’s usually worth it.

The story doesn’t end there, either. “I may have a fight on my hands. There was no sign of forced entry, which means the insurer may deny my claim on the basis I invited the thief onto my property at some point. Although, the assessor told me thieves can bypass some locks, so hopefully my claim will still be paid,” George said.

*George’s case is ongoing so we can’t give his real name or further details of his situation.

Case study 2: Unsuccessful claim

Marie (not her real name) lost all her jewellery when her home was broken into. The items had a total value of $7700, including her $3000 engagement ring. When Marie made a claim, she was advised the jewellery limit was only $2000 in total. When taking out the policy, she had specifically asked if all her jewellery was covered — the company assured her that it was.

She appealed to the Insurance Ombudsman but wasn’t successful. The Ombudsman’s panel said it wasn’t possible to establish details of the conversation between Marie and the insurer’s customer service department, and therefore it must rely on the conditions of her insurance policy.

Checklist

  • Check your contents policy for jewellery per item and total limits.
  • Specify your items for additional cover.
  • Check what proof you need for a claim such as receipt, close–up photograph or valuation certificate.
  • Go to a registered valuer and let them know the valuation is for insurance purposes and where you would usually shop to replace the jewellery.

For advice on purchasing jewellery, see our report Buying a diamond.

 
 

 

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