However you choose the insurance coverage, it is important to remember what the cost of replacement would be.

Case in point, when my car was totaled, the insurance only paid for the blue book value of the car which was 8K on a 3 year old car which was not enough to replace it with a new car. That was when I found out a family friend had her car stolen but the insurance coverage replaced it with a new car. She paid a little extra for that kind of coverage. I did not know such coverage exist at the time so now I do have that kind of coverage on depreciable assets.

Communication and education, that’s what it is all about.

In general, you need an appraisal for items about $10k in value. The problem with bloated appraisals is that you are paying more premium than what the replacement cost of the ring actually is. If “you” can buy the ring for much less than what is appraised, means the actual replacement value is much less than the appraised value. Don’t get caught up in the warm fuzzy that you bought a new ring and someone appraised it for $x thousands over what you paid.

Replacement value means just that. So, Jim, I must clarify a few of your points. You can insure anything for however much you want, but that doesn’t mean that you will get that amount even with replacement value. If you insure the ring for $5k and have replacement value coverage, you don’t necessarily get $5k compensation. If the ring can be bought for $2k, you will get $2k. Remember it is replacement coverage–that is, what it cost to replace the ring with like kind. The $5k means that the insurance company will pay no more than $5k, but does not mean the insurance company won’t pay less. The insurance company also has the option to replace the item of like kind, especially when there is such a disparity between what was appraised and what you bought the ring. Since insurance companies are volume buyers, they will be able to obtain diamonds below what you as an individual buyer can buy the same diamond.

Although you might get an appraisal far higher than what you paid for the ring, I would turn the appraisal in, but insure for what you bought the ring for. Bottom line is that the actual replacement cost lower than what you paid for the ring to begin with.

Second Jim, despite having coverage with Jeweler’s Mutual, it isn’t independent of your home owner’s insurance. Insurance points still accumulate and go on your CLUE Report (you can get a free CLUE report each year). Claims made with Jeweler’s Mutual can affect your home owner’s premium if your insurance points add up. so, it’s not necessarily mutually exclusive; however, if you are prone to losing things, then having a separate insurance company schedule your valuables is probably better so that your home owner’s insurance company doesn’t drop you for having too many claims with them. This is the reason for having separate insurance providers.

the negative to having separate insurance providers is that you can often get multiple policy discounts in having only one insurance provider for home owner’s/renter’s, auto, liability, umbrella, etc.

last thing Jim, you schedule items because the value exceeds the standard limits of the general insurance policy, not because you’ve had them appraised. Your home owner’s/renter’s insurance policy does cover jewelry up to a set limit (normally no more than $500). Because things like jewelry can exceed that value, you schedule or have a separate rider on your insurance policy to insure the items beyond that limit. It’s good you opted out of the general unschedule coverage, since your home owner’s/renter’s insurance already covers those items. You also schedule items that aren’t covered in the general insurance policy.

there is a formula for everything and insurance companies have great actuaries to come up with models. Your scenario would more than likely result in an actual difference, but overall insurance premium doesn’t skyrocket based on given factors. If you have filed claims before, that would affect more than anything, as would poor credit history.

Really the last, last Jim…you are more likely to get less for a claim with an insurance provider that deals strictly with jewelry, because as I mentioned above, the insurance company can be a volume purchaser and has a much better valuation of what your jewelry is worth since it only deals with those kinds of claims. With a general insurance provider, the chances are they will simply write a check rather than go through the hassle of replacing the jewelry with like kind.

Thanks!

I bought my wife’s ring from Blue Nile and it came with an appraisal. In your experience do you recommend getting another independant appraisal or just basing it off the one we receieved from Blue Nile?