Below is a list of some common questions about appraising and some questions I recommend you have with your insurance agent when deciding what coverage is the best fit for your needs. If you have questions that aren't answered below, please feel free to send me an email and I'll be happy to help. Joel@VonHasle.com
"Why choose an Independent Appraiser?"
An independent appraiser has a more focused approach and specializes in value methodology and the appraisal profession in general. Think of an independent appraiser as a specialist as opposed to someone who does them as just a segment of the services they offer. Here is an excerpt from from a statement from The Appraisal Foundation in response to a recent court ruling:
“Consumers are the biggest beneficiaries of this ruling. Personal property assets will be better protected when a qualified and independent appraiser is retained to value one’s personal property assets,” said John Brenan, vice president of appraisal issues at The Appraisal Foundation. “This also means wealth managers and estate attorneys now have a greater fiduciary duty to their clients to fully understand appraiser qualification criteria and appraisal standards when vetting personal property appraisal experts.”
Click here for the full release.
While there might be highly competent appraisers in a retail jewelry store, an independent appraiser removes the appearance of partiality.
"What is an appraisal?"
An appraisal is a document that gives an unbiased third party opinion on the quality or value your jewelry. The document that a jewelry store provides with a purchase of an item is technically not an "appraisal" as it doesn't fit the definition of "unbiased third party." It might be called an "Estimate for Replacement" or "Insurance Documentation" or something else along those lines and usually gives the price at which the item could be replaced at that particular store. Valuation of jewelry is not an exact science, so the value on an appraisal and "Estimate for Replacement" might vary.
"Is an appraisal necessary to secure full coverage?"
Most insurance companies require current appraisals (usually less than 2 years) to have the pieces individually scheduled on your policy. Sometimes, the receipt from where you purchased the items may be sufficient. Remember, the more detailed and accurate your appraisal is, the more detailed and accurate your replacement will be should you suffer a loss.
"Is my claim, or replacement value, more likely to be accepted if the appraisal is performed by a certified appraiser?"
A properly trained appraiser is best qualified to give you the most accurate and detailed evaluation of the piece as well as the most accurate value of the item. A gemologist is trained on the "what is it?" where an appraiser has additional training to give more accurate information regarding the "How much is it worth?" question. Some companies require more qualified appraisers, and sometimes second opinions on higher value items.
"What is the difference between scheduled and unscheduled coverage?"
Scheduled coverage, often referred to as a "rider," lists each piece being covered, with its own individual value and detailed description of the item.
Unscheduled coverage refers to a general collective dollar amount that varies by policy. Unscheduled items may have different limitations for claims and covered perils.
"Is there a deductible? How much is it, and can I change it?”
Most policies have a deductible that will be deducted from the final settlement amount should you suffer a loss and file a claim. Some companies offer different levels of deductibles and adjust the premiums accordingly.
"Does my policy cover all risks?"
This is where reading your policy and asking questions is extra important. Some policies are "all-risk," meaning they cover anything that happens to the ring. (partial loss, theft, damage, mysterious disappearance, etc.) Some policies limit what risks they cover, and might exclude something such as "mysterious disappearance." (When your jewelry is missing/lost, and you don't know what happened to it.)
"Do I still have coverage if the claim is due to my own carelessness or negligence?"
Most policies cover things that might be careless or negligence. That's why we have insurance after all. But again, careful reading of your policy can help determine what might not be covered.
"What if the loss occurs while the item is in someone else's possession?"
Unless specifically excluded, most policies cover the items whether in your possession or someone else's.
"Do I have the choice of a full cash payout, or will the amount be less?"
This is one of the most misunderstood things in jewelry insurance. Most policies allow the insurance company to decide how the claim is settled. (Replace the item with like kind and quality or issue you a check for the current replacement value of the item) The amount you have the item insured for sets the maximum that the insurance company will spend to replace the item. Getting clarification on this up front can save a lot of headaches later, should you suffer a loss.
"Do I have the choice where I can go to have the item replaced?"
Some insurance companies have their own source for replacing lost items. They may still allow you to choose, but they will usually only pay out to you what it would cost them from their source.
"If my replacement is from the insurance company's source, will I be allowed to have it independently verified by an appraiser or qualified gemologist?"
Many policies use the term "like kind and quality" when describing the replacement. In most cases, any verification would be at your own expense. There may be wording in your policy regarding disputes of replacement items.
"Are there any geographical limitations to my coverage?"
Some policies are limited to the US. It's an often-overlooked question, particularly for a newly married couple headed out of the country on a honeymoon with their new wedding jewelry.
"How often should I have my appraisals updated?"
Well, again, that depends on your policy and can vary from company to company. Our recommendation is that you have them reviewed every 2 years to make sure your values are correct, and you have adequate coverage. It's all about making sure you're not under, or over, insured.
"In the event of a claim, am I limited to the appraised value should there be a significant increase in value?"
In almost all cases, yes! The appraised value sets the maximum amount the insurance will pay in the event of a loss. Even more reason to have your appraisals updated regularly.
"If there is damage to a piece, can I replace it, or will I be limited to repair?"
It will really be up to the insurance company as to what will cost them less. If the item is damaged beyond repair, it would be replaced with an item of like kind and quality. The damaged items then usually become property of the insurance company.
"What if the insured item is irreplaceable? (One of a kind, antique, etc.)
If an item of like kind and quality can't be found, then companies often allow the insured to get a similar item of comparable value. They might also pay the loss in the form of cash settlement. However, if the item in question is truly irreplaceable, then a "replacement policy" was probably not the best choice in the beginning. A policy which assured a cash settlement would be a better option. (That is a policy where the value is agreed upon in advance.)
"What if only part is lost? (the center diamond, only one earring, etc.)
Most policies will pay to have the missing part or piece to be replaced. If they can't replace a matching piece, they might choose to pay out the entire amount, or replace a new similar set, with the remaining pieces becoming property of the insurance company.