Value your jewellery? Check your insurance policy

Precious jewellery can be damaged, stolen or lost. To make sure you have insurance cover should you ever need it, take a moment and check your policy, says Insurance & Financial Services Ombudsman, Karen Stevens.

“Declined insurance claims for damaged, stolen or lost jewellery are a common complaint, and many could be avoided,” says Karen. “The best time to think about insurance is before you need it. Insurance does come with obligations on the insured, and jewellery is a good example of this. It pays to check your policy and take note of what you need to do to ensure you’re covered.”

For 23 years, the IFSO Scheme has provided a free and independent service for insurance and financial services complaints. “Complaints contain lessons, for both consumers and the industry,” says Karen. “Jewellery is precious, and often of sentimental value too. We’ve investigated hundreds of cases where people find themselves without both jewellery and insurance. We hope the following tips, and IFSO Scheme complaint examples, can help people avoid some common issues.”

1. Check your insurance policy

Check for requirements, limitations and exclusions. For example, keeping jewellery in a safe place, taking ‘reasonable care’, proving ownership and loss. Check for limits on specific items, and exclusions, such as wear and tear.

Case example: check your jewellery for wear and tear

When Mrs B* discovered her wedding ring was missing a ruby, she made a contents insurance claim to get it fixed. The claim was declined as the policy included a general exclusion for losses caused by wear and tear. Mrs B wore the ring every day for 42 years and its claws had worn out, which contributed to the ruby’s loss. The entire claim failed.

2. Specify special items of value

Most contents policies require you to specify items over a specific value (e.g. over $3,000) on your policy schedule. If you don’t, then the maximum cover for individual items will apply.
Case example: get a valuation and specify the item on your policyschedule

After Ms P’s watch was stolen, a jeweller found its replacement value was $6,375, based on an equivalent model. But when Ms P had set up her contents insurance policy, the estimated value for the watch was recorded as $2,900 (under the $3,000 limit for non-specified items). Despite a recommendation, Ms P didn’t have the watch valued at the time. The insurer only paid $3,000, the policy limit for non-specified items.

3. Keep receipts and get up-to-date valuations

When making a claim, you need to provide proof of purchase or ownership, such as valuations, receipts or credit card statements. Lack of proof can be grounds to decline a claim.
Case example: Photos are often not enough

Ms C’s only evidence of her stolen jewellery was photos of herself wearing it at a party. She commissioned a post-loss report, which valued the jewellery at $56,887. The insurer offered $27,846. Because she had been unable to provide sufficient proof of ownership, the insurer had the discretion to decide. A recent valuation would have helped her claim.

4. Travel safe and wise

Most travel insurance policies require you to take “reasonable care” of your belongings, report incidents to police immediately, and not to leave bags unattended in public places.

Case examples: your policy will specify the timeframe to report your loss (ie 24 hours)

When Ms X returned from Fiji, her jewellery was missing from inside her handbag. Her claim was declined because she failed to show any evidence of an “unexpected event” including a police report, as required by the policy. Mrs K lost her antique necklace while shopping in Melbourne. Rather than go to the police, Mrs K waited until she’d returned home when she wrote to two of the shops she’d been to, asking if they’d seen it. She then obtained a loss estimate (valued at $3,175) and made a claim. Her insurer declined the claim as the loss hadn’t been reported within 24 hours as required by the policy. Later, the insurer accepted the letters as proof of an unexpected event and agreed to make an ex-gratia payment of $900

5. Tell the truth

Think twice before you inflate your insurance claim. The consequences are more serious than most people think. When we investigate complaints involving dishonesty, false statement or fraud, the IFSO Scheme looks at the policy, and considers whether the insurer has been able to provide evidence to the legal standard.
Case examples: Your claim, and the evidence you provide, will be checked

Mr G made a claim for jewellery and other items stolen from his home while he was away on holiday. Metadata found the photos he provided (as proof of ownership) were taken during the period he was on holiday. The claim was declined on the basis of fraud. When Ms X provided photos to support her stolen jewellery claim, they were found to be from a commercial website of costume jewellery (valued at 30 euro), rather than her description of a ruby pendant on a gold chain with diamonds. The claim was declined, and the policy avoided. In this case, it was unlikely she would ever obtain insurance cover in the future.