Having the right cover, providing proof of ownership and proving value are common issues with jewellery insurance. Read this guide to find out how to avoid problems.
Lost, stolen or damaged jewellery is usually covered by contents insurance when a sudden and unexpected event occurs. Your insurance policy will give details of when your jewellery items will or won’t be covered.
Jewellery is precious and often holds sentimental value for the owners. Consumers expect their insurance will provide cover for their jewellery if it’s lost or stolen, but sometimes they are tripped up by common issues, meaning they don’t receive the claim settlement they expect. There are important features of contents insurance that apply to jewellery claims, and consumers should take time to understand their policies.
Vera’s* declined jewellery claim
Vera made a claim for stolen jewellery that a post-loss report said was worth $57,000. The insurer requested proof of ownership and Vera provided one photograph of herself wearing the jewellery. The photograph was not sufficient proof of ownership and the insurer decided to make an offer to Vera of $27,000, due to the lack of ownership information. The IFSO Scheme said this was a fair and reasonable outcome to the claim.
Sophia’s* worn-out ring
Sophia made a claim after she discovered a ruby was missing from her wedding ring. She said the ring had caught on something and this dislodged the ruby. The insurer provided an independent report confirming that Sophia had worn the ring every day for 42 years and the ruby had fallen out because the claws were worn out. The insurer declined the claim because the loss was due to wear and tear. After obtaining an independent expert’s report, the IFSO Scheme agreed the insurer could decline the claim.
Sanje’s* low claim settlement
Sanje had jewellery worth about $50,000 stolen from his home, and complained when he was only offered $16,000 by his insurer. The IFSO Scheme found that the insurer had correctly applied the terms and conditions of his policy, which had a $15,000 limit for jewellery and watches, a $1,000 limit for gemstones, and no individual jewellery items specified.
Jewellery not kept in safe
Mr and Mrs Sullivan* held contents insurance and had jewellery specified on their policy at a total value of $105,000. The policy stipulated that, if the specified jewellery was not in a locked safe, it had to be worn by, or in the presence of, Mr or Mrs Sullivan. When renovating their house, they moved a pair of diamond earrings out of their safe to a concealed box in their bedroom. When the earrings went missing, the insurer declined their claim, and the IFSO Scheme was unable to uphold their complaint.
*Names have been changed
Most contents policies have limits for the amount the insurer will pay for jewellery claims. This means a claim for any jewellery that has not been “specified” (listed on the policy schedule, together with the value it is insured for) will be limited to the maximum amount shown in the policy for jewellery, usually only about $2,500.
Read your policy to understand the claim limits that apply to your jewellery. If you believe the value of your jewellery exceeds the claim limit in your policy, you need to ask your insurer to specify the individual jewellery pieces on your policy schedule and for an extra premium. The insurer will then include these specific items when calculating your premium.
Owning an expensive piece of jewellery increases the risk to the insurer. If you do not tell your insurer about the jewellery by specifying it on the policy schedule, your insurer will use the claim limit amount to settle the claim, because this is what your premium was based on.
You can tell your insurer about the jewellery you would like to specify:
Insurers will often require a recent valuation before they will specify high value items and, sometimes, they will require valuations to be updated at regular intervals.
Jewellery must be specified before any claim event occurs – you cannot ask for jewellery to be specified for a higher amount after it is lost, stolen or damaged; that is fraud.
Your insurer will let you know the process for specifying the jewellery and any information it requires from you.
When you make a claim, you will need to show you are the owner of the jewellery. The type of proof that is required depends on the circumstances of the claim and the items that have been lost, stolen or damaged. The type of proof that you may be required to provide includes:
Different insurance policies will contain different wordings. It is important you understand your policy wording and the requirements that apply to you. If you are unsure what proof of ownership is required, talk to your insurer and they can provide more information.
If you do not have proof of ownership available, tell your insurer the reasons why. Your insurer will then decide how this will affect your claim. If you do not meet your proof of ownership obligations under the policy, your insurer may decline your claim.
Your insurance policy will explain how your insurer will settle a jewellery claim. This will include confirmation of whether the policy provides replacement cover or indemnity cover.
Replacement cover means your insurer will:
Indemnity cover means the insurer will provide a cash settlement of:
If you are unsure of the type of cover you have, contact your insurer. It can provide more information about the policy and how it applies to your specific circumstances.
It is a good idea to get regular professional valuations for items of specified jewellery, or for any unusual or special items (even if they do not exceed the individual policy limit). Jewellery purchased or gifted overseas should be valued in New Zealand when you return.
Having a valuation can speed up the claims process and enable you to receive an appropriate settlement of your claim. Valuations also assist in proving ownership of the jewellery.
Valuations should be obtained from a qualified jewellery valuer. They should include a photograph and full description of each item and its replacement value or its indemnity value (market value), depending on the policy type you have.
Three common reasons jewellery claims may be declined are:
You can request a review of the claim decision through your insurer’s internal complaints process. If you are unhappy with the complaint response, you can ask the IFSO Scheme to investigate your complaint, for free.
Read your policy
Read your insurance policy and make sure you understand the claim limits and claim settlement requirements that apply.
Talk to your insurer if you are unsure about the cover, or if you would like to specify any jewellery items.
Keep receipts and take photographs of your items
For jewellery, it is a good idea to keep receipts and up-to-date photographic records. Photographs are a good way to prove that certain items existed. However, they do not usually provide conclusive proof of ownership and your insurer may ask for additional information.
Obtain regular valuations
For high-value jewellery, obtain regular valuations and store these in a safe place.