Your jewellery is precious to you, not only because of its monetary value, but because such treasured items often have a story to tell. An engagement ring tops the list of most valued possessions for many people, but you may own a number of other pieces which have a deep sentimental value to you.
Unfortunately, high-quality jewellery also tops the list of things criminals are keen to get their hands on. A ring or bracelet is easily slipped into a pocket and hidden away, and these items fetch good money, even at black-market prices.
To make matters worse, the sentimental significance of a special ring, necklace, brooch or bracelet cannot realistically be quantified or covered by insurance.
Insuring hand-me-down items may prove especially complicated. Unlike functional possessions, such as cell phones, cameras and laptops, for which you are likely to have receipts, it may be difficult to show proof of purchase, or establish the replacement value of each item. Take, for example, an antique silver necklace inherited from your late great-aunt. You may feel that it’s not worth the price of valuation by a professional valuator. A photograph of the necklace may constitute proof of existence but will not necessarily reflect its value.
So how do you go about insuring new and old jewellery – the things you wear regularly and those you hardly ever wear? And how do you make sure that, in the event of loss, you receive a fair pay out or replacement from your insurer?
Items you wear regularly
Going back to that engagement ring: let’s say it consists of a solitaire diamond set in 18 carat gold and that it was bought from a reputable Sandton jeweller 20 years ago for R10 000. It’s probably worth about triple that now, although you haven’t had it revalued. But you do still have the original receipt from the jeweller. You wear it every day, and when you garden, or wash the dishes, you slip it off and put it on a counter top somewhere.
Typically, the ring would have to be insured under an All-Risks policy, which is normally linked to your household contents policy. Under the All-Risks section, your ring would be covered both while you’re wearing it and when it’s off your finger at home. In addition, it would have to be specified (listed as a separate insured item) under the policy, which means it would have a separate monthly premium, which would increase your overall premium.
Because the ring has a high value, you would also need to have a valuation certificate for it, and it would have to be insured for its replacement value, which is what you would pay a jeweller today when buying a ring of the same quality.
Different insurers set different thresholds for the value at which items need to be specified under the All-Risks section, and the value that must be supported by a valuation certificate. For example: Santam requires a valuation certificate for items valued at more than R10 000, and the certificate must be provided before cover will be granted.
All insurers apply an excess (the upfront amount that you are liable for in the event of a claim) to specified items, which may be a fixed amount, or an amount based on the insured value of the item.
It’s important to update the insured value of your ring and other jewellery regularly, so that your policy reflects its current replacement value. If the cost of replacing a ring is higher than the amount you’ve insured it for, your insurer will only pay out the insured value, leaving you to pay in the difference.
Some insurers require you to have jewellery revalued at least every two years; others are satisfied with a single valuation certificate, as long as you revise the insured value regularly, or you allow your broker or insurer to revise it upwards automatically each year.
Bear in mind: the value of your jewellery is affected by inflation and other factors, such as the exchange rate and the gold and diamond price.
It’s also important to check your policy terms & conditions. Some policies have a safe warranty, where they require items (usually with a value of more than R50 000) to be kept in a locked safe when not worn. This means that if a ring worth R55 000 is left on a bedside table or countertop and is lost or stolen, there will be no cover.
Another important condition under which your ring will probably not be covered is if it’s subject to what’s known as “gradual” damage: wear and tear, rust, mildew, corrosion or decay. For example: if you notice that a stone is loose, the responsibility lies with you to take the ring to a jeweller to have it fixed before the stone falls out. If it falls out and is lost because, for example, the claws holding it have corroded, you will not be compensated.
Another stipulation of most policy schedules is that the insurer will not replace a full pair or set if only one item in the pair or set is damaged or lost. This applies particularly to earrings and engagement-wedding ring sets.
Rarely worn items and collections
Your collection of rarely worn jewellery might include heirlooms and antique jewellery for which you have no proof of ownership and no idea of value. Is it worth specifying these items under an All-Risks policy, bearing in mind that unspecified personal items under a certain value (usually about R1 500) are automatically covered? And is it worth having each item valued by a professional valuator?
Most Insurers say that if the items are rarely worn, it’s sufficient to have them covered under your home contents policy. But you will have to go the valuation route if you want to be secure in the knowledge that valuable items are covered for their replacement value.
For items of low value, it’s probably sufficient to keep photographs as proof of ownership. At the other end of the spectrum, if you have a jewellery collection containing items of very high value – to the extent that the collection may be worth half-a-million rand or more – it may be worth approaching a specialist insurer to have your collection separately insured.
For substantial or high-value jewellery collections, it may be well worth considering having your collection insured by an insurance company that deals exclusively with high-net-worth individuals.
This way you can obtain a more personalised policy, and one that may be more cost-efficient than those offered by the mass-market insurers.
At GRIB we offer Private Wealth insurance that provides an alternative to the traditional All-Risks cover. Assets Out is an innovative feature of an exclusive Hollard product that will automatically cover your jewellery without the hassle of having to specify each individual item.
From your luxury cars, to your homes and everything inside them, we offer high-net-worth insurance products specifically suited to your unique lifestyle.
Feel free to contact Melissa on 044 382 0550 should you be interested in finding out more about how to properly insure your jewellery.