Jewellery Insurance FAQs
I have suffered a jewellery loss, what should I do?
If you have been unlucky enough to lose your jewellery you should first contact the police and obtain a crime reference number (if stolen) or lost property reference (if the item has been misplaced). If you intend on making a claim on your insurance, read your policy document very carefully, paying particular attention to the statement of facts, and any exclusions that may apply. If you do not have a copy, ask them to send this to you and check what the excess fee is. You should be told who the claim handler is (their name, contact details) and any claim number associated with the loss.
What service should my insurance provider offer?
Jewellery has an emotional value far greater than the precious metals and gemstones it is made from. When an item of jewellery needs to be repaired (or replaced) your insurance provider should have your interests at heart when you make a claim. We are confident that you have faithfully paid your insurance company for this privilege, and so when making a claim the process should be simple and hassle free.
You should expect a professional service at all times. One which pays for the repair of your jewellery (when required) or replaces it with an item of equivalent quality and of the same value, or failing this, a cash settlement to maximum liability established by your policy.
However, insurers respond differently to claims, and some insurers fail to mention all the settlement options available that you are entitled.
We would also recommend that any correspondence with your insurance provider should be in writing (and an email is fine). This is particularly important for any settlement options they offer you, as it helps to avoid uncertainty. Finally, we recommend that you never agree to anything over the phone, or ‘on the spot’, before you have had time to consider all the options. Please read our other FAQs below, and if you have any concerns in regards to the suitability, source or type of item that is offered to you as replacement, please do not hesitate to contact us to discuss this further.
Repairing Jewellery
My insurer is insisting on choosing a repairer for my jewellery (or I am being asked to obtain multiple quotes), but this is something I am unhappy with. What can I do?
If the item needs repairing the insurance provider may attempt to convince you that they know who should repair the jewellery. However, if you would feel happiest choosing the repairer yourself, perhaps your local jeweller or the goldsmith who made the item, then this wish ought to be respected. Furthermore, if you are being asked to obtain multiple quotes you should be told precisely, by each repairer, what work is being proposed for the price quoted. If your insurance provider believes they should repair the article themselves, then they too should be saying exactly what they are going to do to repair it.
Lost/Stolen Jewellery
I do not have an insurance valuation for the item I am claiming for, what should I do?
If you do not have a valuation document, you should ask your jeweller to prepare a Post Lost Assessment which you can submit instead of a valuation. This is a specially researched report which will provide you with a realistic replacement figure on your lost jewellery. This is a service which needs to be undertaken professionally and thoroughly if the insurer is to accept it.
I have seen an item of jewellery in a shop window (or catalogue, web page etc.) similar to the item I have lost, can I use this as the basis of a claim?
We would strongly advise that this method of substantiating the value of jewellery is avoided. The item you have seen may not reflect the true market value or quality of the lost/stolen item. An insurance company, upon receiving a claim based on this evidence, would be more likely to contract a claims management company to investigate. These companies charge the insurance provider a fee for such investigation. The claims management company usually also offer replacement jewellery, and they allow a discount or nullify the fee to the insurance provider if they do so. We hear a large a number of complaints about these companies; typically, that the claim is settled in a manner that is more accommodating to the claims management company than it might be to the client.
I have a valuation that is over three years old, will this be sufficient?
We would recommend that jewellery be valued every three to five years, as values can change over time. If your valuation is between three and five years old it could be beneficial to have a reassessment made. If your valuation is older than five years it would be highly recommended to have a reassessment made. This will allow you to submit current replacement values for your jewellery.
Why do many insurers insist on settling claims by replacing items rather than paying cash?
Almost all household policies reserve the right to replace items which are the subject of a claim, rather than pay cash. Many also say they may do so through their chosen supplier. That is generally to the advantage of most insured persons: it enables insurers to obtain a discount from suppliers, and avoids fraud by the small minority who fake a loss as a means of creating cash, both of which help to minimise premiums.
That replacement process works well for claimants who have lost, say, a television where insurers can easily seek an equivalent model. It works less well with jewellery where small differences in quality and style can greatly affect price and your acceptance of the replacement.
If I am offered a replacement item of jewellery, how can I ensure that the replacement offered is true to the original?
Most insurance providers, or their representatives, do not use the services of qualified Valuers (such a JVA member). They will instead use their own approach to valuing jewellery, which might involve a telephone interview or self-completing questionnaire. Do not be fooled into thinking that even if a claims management representative visits you at your home address they are in anyway doing any other than conducting the same approach as those simply using the telephone or self-completing questionnaire.
Therefore, if the only description you have of your jewellery is that it was “a 3-stone diamond ring, purchase price £750”, you may not know whether the quality of the replacement ring offered by insurers is similar. In this scenario, you should have a Post Loss Assessment written. If you have been offered a replacement and would like to talk through this option, then we may be able to provide assistance – please contact the shop and ask for the Valuer who prepared the valuation/post loss report.
I wouldn’t want to replace my item of jewellery with an identical piece because the original had sentimental attachment and the replacement wouldn’t, or I would like a change. What can I do?
Often the sentimental value of the jewellery can exceed the monetary value, particularly so in the situation of loss. As such a claimant, will often feel that they would rather choose an alternative piece of jewellery. This may be an option for you which you’d need to enquire about with your insurance company.
In most cases so long as the replacement article(s) is an identical price, or if you wanted to 'upgrade' (choosing a replacement article of jewellery which costs more than the claim and opting to pay the difference) this again may be acceptable to your insurance company.
I have been offered a gift card/ credit note/ voucher etc. What does this mean?
We hear many complaints about various credit schemes. In the experience of some of our customers vouchers, prepaid token cards, or other form of credit only serve to limit the client’s choice, meaning they can only go to shops who are in some way connected to the settlement company. These arrangements are usually for the benefit of the insurance provider, and we would like to remind you that the whole process of making a claim should be centred on your best interests; not for their convenience.
I would be happiest choosing jewellery from my local jewellery shop rather than accept vouchers, choosing from a catalogue or be referred to a chain shop. Can I do this?
The Financial Ombudsman rulings make it very clear to insurance companies, and their subcontractors, that unless the policy specifically states otherwise you can insist on replacing your jewellery exactly where you want to – without any discount or limitations. This means that if you would be happiest choosing your jewellery from an independent specialist then you can.
Please remember, even if your insurance company, or a loss management company acting on their behalf, haven’t told you that you can settle a claim in this way, doesn’t mean that you will not be allowed to.
My insurer has agreed to pay cash, but is offering less than the replacement value. Is that fair?
It depends on whether they have met the Financial Ombudsman Service rules. If they have, then they have the right to pay you only what it would have cost them to replace. If not, they should pay the full replacement cost, or the sum insured on that item if less.
How long does it take from submitting a claim to receiving settlement?
This depends on your insurance company, the nature of the loss and the method of settlement. In our experience most claims take around four weeks, though some claims can take six months or longer. However long it might take, to get the best settlement is the most important thing - the time spent during the claim procedure is a small price to pay against the lifetime you can expect to enjoy your jewellery.
What can I do if I am not happy with my insurer’s offer of replacement (or repair)?
If normal negotiation fails, your insurance policy will set out a complaints procedure. If this fails you could take legal action, or use the Financial Ombudsman Service (FOS), which is free. The FOS takes the view that it is perfectly in order for insurers to replace jewellery, or pay a reduced cash settlement in the situation of replacement provided:
* It is fair to do so.
* The insurer has taken reasonable steps to explain when you took out or renewed the insurance that they would handle claims in this manner. Given the length of most household insurance policies, the Ombudsman may expect the insurer’s right of replacement to be drawn to your attention in a policy summary.
* The replacement item (for lost/stolen jewellery) is reasonably identical to the item it replaces. A professional valuation helps ensure the replacement is reasonably identical.
With respect to the repair of jewellery, the FOS takes the view that it is perfectly in order for insurers to repair jewellery using their preferred service provider, provided the work is done to a reasonable standard by appropriately qualified experts.
If you feel that the service being offered to you is inappropriate then you need to contact the Financial Ombudsman Service. We would recommend that you always have in the back of your mind this question, “am I being treated fairly?” If the answer to this question is “no”, then do not accept the settlement option presented to you and contact the Financial Service Ombudsman.
Information from the Financial Services Ombudsman
The below extract is taken from the Financial Services Ombudsmen website.
“repair, replace or cash - disputes about how insurance claims are settled – Issue 92 February/March 2011.
“We frequently see complaints where an insurer has agreed to settle a claim - but wishes to do so in a way that the policyholder considers inappropriate.
“The insurer may, for example, offer to repair a damaged item when the policyholder wants instead to receive a replacement. In other instances, the insurer agrees to a replacement but insists that it is obtained from a specific retailer.
“Our selection of case studies illustrates the types of complaints brought to us and the way in which we have resolved them. Our approach to such disputes has not changed over the years - and we outline here the general principles we follow.
“Most household policies now provide 'new-for-old' cover but leave it to the insurer (not the policyholder) to decide whether the claim should be settled by repair, replacement, reinstatement or cash settlement. Where a case is referred to us, we consider whether the insurer has exercised this power reasonably, in the circumstances of the individual case.
“Where insurers opt for repair, we consider whether they have explained the implications of any choices made by either party. If the repairer is chosen by the insurer - or its agents (such as loss adjusters) - we are likely to conclude that the insurer will be responsible for ensuring any deficiencies in the repair are put right. If the policyholder has insisted that a particular repairer should carry out the work, then we are likely to conclude that the policyholder will be responsible for the quality of that work.
“This does not mean that every repairer who has provided a policyholder with an estimate will be regarded as the policyholder's chosen contractor. We have considered complaints where the insurer told the policyholder to obtain estimates and the policyholder sought the loss adjuster's assistance in doing this. In these circumstances, we are likely to conclude that it is the insurer, rather than the policyholder, who is liable for any shortcomings in the work.
“Even if the policyholder chose the repairer entirely independently, we are likely to conclude that the insurer is responsible for rectifying deficiencies in the work if it (or its agents) 'controlled' the repairer, for example by requiring the repairer to cut costs or to use certain materials or parts. In those circumstances, the repairer can no longer be regarded as the policyholder's 'agent'.
“Where insurers opt for replacement, we consider whether a reasonable replacement can be obtained in the way the insurer has proposed. If, for example, the item concerned is jewellery that is antique or specially-commissioned, then we are likely to conclude that it would be unfair for the insurer to insist on the policyholder buying a modern substitute from a major high-street retailer. In such cases, we usually conclude that policyholders should be allowed to choose where they purchase a replacement and are entitled to a cash settlement (without the deduction of any discount) if they are unable to find an acceptable replacement.
“Where a reasonable replacement can be obtained from a high-street retailer, insurers often specify which one - because they have a discount arrangement with that particular retailer. We are likely to conclude that this is reasonable if the consumer lives within easy travelling distance of that retailer - and the retailer can provide a reasonable replacement. Similar issues arise if the insurer offers vouchers that can only be exchanged for goods sold by a particular retailer.
“Sometimes, policyholders prefer to have a cash settlement even though there is no practical reason why they could not visit the insurer's preferred retailer - and that retailer is able to provide a reasonable replacement. In such instances, we will not usually consider it unreasonable for the insurer to deduct from the cash settlement any discount it would otherwise have obtained from the retailer.”
It could be worthwhile visiting the website and reviewing the case studies illustrated as they may have similarities to your experience during an insurance claim.
http://www.financial-ombudsman.org.uk/publications/ombudsman-news/92/92-insurance-claims.html.
If the claim concerns antique jewellery, then page 22 of this recent set of case studies should be read: