Whether it be for a special occasion or as a family heirloom, some of us may be lucky enough to have items of jewellery that are worth a lot of money. In these cases, you need to make sure you have adequate insurance in place for them.
The most fundamental question you need to answer when looking at insuring jewellery is how much it is worth today. Particularly with inherited or antique pieces, this may not be as simple as looking online to see how much it is to buy new today.
The price of gold has nearly doubled over the last five years. That means that your jewellery could potentially be worth a lot more than you think, which means you might need more cover than you currently have in place.
Some insurers have found that as many as 40% of claims involving gold end up being underinsured for this reason. But is underinsurance that big a problem for you?
In reality, underinsuring your belongings can be one of the most expensive mistakes you make when it comes to insurance.
Imagine you insure yourself for £20,000 worth of contents, when in fact you have £40,000. Let’s say you need to come to claim for £10,000. The insurer comes to investigate and realises you are only insured for 50% of your value. That means that they might only pay out 50% of your claim, meaning you only receive £5,000.
If the value of your jewellery may actually be twice what you thought, then it’s not impossible that you only get back 50% of the money back on claim, meaning you couldn’t replace the item.
So how do you find out the real value of your valuables?
There are several ways to do this, and it will depend on the valuable in question and services in your local area. Antiques and paintings may often require specialists to come to your home to examine the piece. Jewellery is the most common item that needs to be specified on a policy though, and this can usually be taken to your local jeweller for an appraisal. Many independent jewellers run ‘valuation days’ where an expert valuer comes into the store and you can book a slot to turn up with your pieces, and come away with a certificate of value which you can use for your insurance. Some of these may charge a fee for the consultation and/or a fee per item. This is where it can vary by your local store or circumstances.
Yes, you may incur additional costs to get a reliable and accurate valuation, but consider that the alternative is possibly an expensive shock when you come to claim.
Given the fluctuating price of precious metals and jewels, values will not remain static and you’ll need to ensure your cover remains up to date. Many insurers may automatically include an inflationary rise in the specified item value at renewal each year, but some won’t so make sure to review your policy documents at renewal.
Typically, we would suggest that you always have a valuation on hand for any high value items that has been carried out within the last three years. Anything longer than this, and the price could have notably changed enough to affect your required cover.
So you’re confident in the value of your items, but how should you specify them on your policy?
Most insurers will differentiate between two areas – things that only ever in the property (artwork/antiques/collections etc) and things that come out of the home with you (jewellery/watches etc). At coverbaloo we call these ‘high-risk items’ and ‘personal belongings’ respectively, but other insurers may differ.
The most important thing to check, and a mistake that we sometimes have to contact our customers about following an online quote, is that your personal belongings are listed under the ‘personal belongings’ section of cover and not the ‘high-risk items’ section. Doing so would actually mean that they are not covered away from the home, leading to a situation where you could come to claim only to realise that you can’t.
So make sure that if you expect to claim for things away from home, they are listed under the correct section and at the correct and sufficient value each year.
There is no need to also specify your personal belongings under the high risk item section of your policy. In our case, doing so won’t impact your price, but with other insurers it may cost more if you have more high risk items in the home.
Likewise, there is no reason to add high-risk items like paintings to the personal belongings section of cover, as you would be needlessly paying more to cover items that (presumably) you don’t actually plan on taking out of the house with you.
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