Insurance: How best to insure jewellery

By John Grant If you don't have Contents insurance and you have become the owner of an expensive piece of jewellery then you will need to think about how best to insure it. If you are still living with your parents, then a simple solution is to specifiy the item under their Contents policy. However this is not always possible and you may then need to look at getting your own insurance coverage. Jewellery is one of the more common items that are claimed for on insurance policies and therefore insurers are naturally keen to make sure that they are accepting a balance between high-risk items like jewellery and the lower-risk general Contents cover. Therefore it will be a lot more difficult to get the cover if, all you want is to insure the jewellery. This will especially be the case if the item is very valuable. If you already have a relationship with an insurer (car insurance, for example) then try them first. If you can, consider taking out a policy that includes cover for both your personal effects as well as your new item of jewellery. Most companies have a minimum sum insured, and will also be less than enthusiastic if the item to be specified on the policy is a significant proportion of the overall policy. How much to insure for The cover provided by most insurers is for "replacement"; that is, when a claim is settled the lost item will be replaced. If you would rather have the cash then the claim will be settled on market value, or depreciated value. This means that if you want cash then all you will receive is the amount you would get if you had sold the item. Policies specify how this works and you should read the policy wording carefully to understand your insurer's rules. If you are not sure then call them and ask them how they settle jewellery claims. Valuations Most insurers will require a valuation to support the amount of cover you are after for the item of jewellery. Almost any jeweller can carry out a valuation, and the basis should be on the cost to replace the item. You need to be aware though that this is not the amount the insurer will pay if you wish to have a cash settlement instead of replacement of the item. If your item was purchased overseas then you will need a New Zealand valuation. If it was given to you then a valuation will be needed to confirm a likely replacement value. But the initial jeweller's valuation is only ever an indication, and the settlement figure will only be determined at the time of a loss. Your premium will be calculated however using that initial valuation so make sure it is realistic. What to do if it is lost? If your item of jewellery is lost or stolen, your first responsibility is to notify the police. Next, you need to call the insurance company and notify them. They will require the details of where and when the loss was reported to the police.