Hi, I’m after advice from anyone who has had to make a claim for a specified valuable (jewelry) item. When I insured my ring I provided a valuation certificate. I distressingly lost my ring at work and made a claim with AAMI. They had their jeweller provide a replacement valuation that is 60% of the valuation I had received at the time my ring was made. Their jeweller is their chosen ‘supplier’ and a wholesaler, so they can obviously get the ring made cheaper. They also valued it at lower than my valuation (which was only about a year old). At no time when I took out the policy was it made clear to me that they would pay a wholesale price for replacing the ring. They were however happy to accept a premium for the retail value of the ring. I feel doubly ripped off and robbed. I don’t want their jeweller to make the ring as I have my own, and also I feel like it is diminishing returns if I get a ring replaced by them, given their valuation. I have spoken with their customer service and also complained to AFCA, still waiting to see what happens there. Has anyone got any experience or advice in dealing with this? Many thanks
Hi @sticky38, welcome to the community and your first post.
Who provided you with a valuation certificate?
If it was a valuation certificate provided with the ring at the time of purchase, these are often higher than the real replacement value of the ring and are used often as a marketing tool to justify the price on a ring. It appears this might be the case from your statement that…
valuation I had received at the time my ring was made
If you commissioned your own independent valuation at the time that the insurance was taken out, then this should have reflected the estimated fair replacement value at the time that the valuation was performed.
Hi, I had a jeweller make it from old jewelry I provided. They sent it to an independent valuer. I had no idea of the value of the individual pieces I was getting made into a ring, hence getting a valuation for insurance was very important.
This isn’t what could be called independent. An independent valuer is one that you commission and has no association with the retailer/jeweller. Unfortunately, the valuation you have might not be able to be relied upon as an independent and accurate valuation to argue against the insurer’s valuer. It is possibly only a insurance type valuation often given at the point of sale to give an indication of the amount the jewellery should be insured. These can be optimistic (which is the case in ones we have ourselves) and are done to ensure that jewellery isn’t underinsured.
What does the AAMI specific valuable item insurance cover say? Does it only allow for a cash settlement, or it is possible to get a like for like replacement…that being that they make a replacement for you using the same gold, diamond size and class etc? If it allows for the like for like replacement, this might be the best option for you rather than getting a cash settlement. It might mean that you need to pay the excess upfront.
You may also find this website page of interest…
It is common for a jewellery valuation to reflect a price up to 30% more than the purchase price.
Welcome to the forum. Unfortunate that you lost your new ring so quickly.
You will need to read your contract very carefully. You may well have agreed to AAMI valuing and replacing using their chosen supplier.
If that is not in your contract, then you can ask for the piece to be remade by the jeweller you wish.
Their chosen jeweller may also be making the ring with inferior quality stones (assuming the old jewellery had stones), and less setting material than you provided in the old jewellery to save money.
How can you be sure the valuer was really independent? It may have been a legitimately independent business, or it may have been an associate or colleague of the jeweller with a different business name. It is even possible that it was a different business name which was also owned by the manufacturing jeweller.
If you don’t know the original values how can you be sure of the veracity of the valuation given to you by the manufacturing jeweller.
The only way to be sure to get a truly independent valuation was for you to take the piece to a recognised and reputable valuer.
You could always take the new ring to an independent valuer, or if you prefer, the business that valued your original ring and ask for a new valuation. It may well be higher. But would you then want to pay premiums on the higher valuation? Or it may be lower. How would you feel then?
If you search the forum (use the magnifying glass icon) for AFCA, you will find lots of reports from people about how useless they are at helping consumers, appearing to generally side with the industry.
Thanks very much for all the information you’ve provided me @phb and @meltam
I feel like the whole jewelry valuation and insurance business is not worthwhile - at least not for the consumer! That article pretty much sums things up.
I don’t think I’ll get a replacement ring - it had great sentimental value as well as monetary, and I do worry about the quality of the insurers jeweller too, for the reasons you mentioned.
Looks like I’ll have to put it down as experience and learn from it
Unfortunately insurance can’t cover sentimental value one places on things.
It depends on on how much risk you think is acceptable and willing to take.
If you didn’t have insurance for the loss of your jewellery, you would be out of pocket for its whole value. While you have paid a premium for the cover, you are likely to be well in front if the jewellery had only been insured for about a year. And you will receive what is determined by the insurance companies valuer, the ‘fair’ value of the jewellery.
I would also be asking for a detailed valuation report/report from the insurer. State that the jewellery lost has great sentimental value and you would like to see how the valuation was made and its methodology. Hopefully the insurer is forthcoming with their valuation report for you.
In the future, for an expensive item which specific cover, ask if the insurer will adopt a valuation accepted by both parties (you an the insurer). This may mean that you will have to pay for an independent valuation using an valuer agreed to by the insurer. It may also require revaluations done after a nominated time period (1, 2 3+ years) to ensure the valuation currency. Currency is important as components costs can change over time, labour costs can change over time or ‘fashions’ change. I mean fashions as for things like art, the market can change where an artist is in favour but years later falls out of favour (or visa versa). These can impact on the currency of a valuation.
As a general statement many insurances pay ‘market value’ not ‘replacement value’, eg what a reseller would pay you at the current market. Jewellery has high markups and I suspect most policies would pay out an amount that an estate jeweller would pay for the item if one walked into the shop to sell it.
A bespoke item made to replace one lost would probably be valued at 60% of retail possibly much less depending on the gemstones, metals and design. Consider all the 50% off sales from commodity jewellery shops to make a point regarding markups and true values.
The easiest analogy would be a car policy where ‘market value’ is what a used car dealer would pay if you sold the car to them at the time of loss. In comparison ‘agreed value’ is the maximum the insurer will pay for the same loss, usually more than ‘market value’ and thus those policies cost more. Collector and special interest cars are individually unique problems requiring considerable attention to how a particular policy would pay out if a claim had to be made. eg. Is that 1965 Holden Torana an old junker or a $500K item and how does the policy establish which?
AAMI’s overview of listed item insurance has an important wording, up to. Many policies are equally guilty of wording to lull policy holders into unwarranted senses of security re cover.
Thank you @PhilT . I am discovering it is all in the wording. Once bitten twice shy now. I guess I thought that if a valuation was provided, it was an ‘agreed value’. Silly me! Thanks
While this statement may be correct for car insurance, it isn’t correct for contents and potable items insurance.
Most contents insurance is a ‘new for old’ replacement policy, where an item which is damaged beyond repair or lost is replaced. Some insurers require the policy holder to obtain replacement through their network of retail suppliers (e.g. an electrical store which can process claims for the insurer and possibly provide good pricing to the insurer for a particular item’s replacement). It appears to the case for AAMI. Other insurers only require the policy holder to provide evidence of the replacement cost and they will pay a cash settlement based on this.
Likewise with portable items such as jewellery. Insurers will provide a replacement where a replacement is possible, but where replacement isn’t possible, they will pay out the replacement value for the item subject of the claim. AAMI provide an example in their PDS of how this process works for specified items cover, like that taken out above for jewellery. The example related to an artwork:
Your contents sum insured is $100,000 and includes specified contents of $8,000,
which consists of 2 paintings listed at $4,000 each.…
For the paintings you are able to provide us a sales of receipt (that includes a description of the
item, a purchase price, and the date of purchase), some photos of the lost paintings and a valuation
certificate by a professional valuer. A member of our supplier network determines that the paintings
cannot be replaced ‘new for old’ and that their value immediately before the loss or damage
exceeds $8,000. We pay you the specified contents item sum insured for the paintings ($8,000).
It also appears from this example that AAMI will also agree to a valuation if the valuation is from a professional valuer that they accept. I suspect that the valuation provided at purchase of the jewellery wasn’t what they consider to be a ‘valuation certificate by a professional valuer’, as it was not independent as outlined above…nor agreed to at the time the specified item cover was taken out. In such case, AAMI will determine the value immediately before loss or damage, and if replacement isn’t possible and this will be the amount settled for the loss of the jewellery (assuming that the policy cover is greater than the determined value). I suspect replacement isn’t possible since you piece have a sentimental attachment to the item, being unique and made from a number of individual pieces you had.
Changing fashions also applies to jewellery; for example diamond cuts.
I should have said that the amount settled will be less any excesses which may apply.
Something this thread has raised is the valuation of home contents. We have discussed this with family members and some have based their contents cover on what they think their contents are worth (say a 10 year old fridge worth $100) rather than the new for old replacement value ($1000 for a 10 year old fridge replacing it with a like for like current model). Estimating what one’s contents based on that one may think they are worth rather than what their new for old replacement value is means that one’s contents will be significantly uninsured in the event they need to be replaced. When calculating contents cover value, one should be looking at the cost for new to old replacement.
There are some documents and online calculators that can be printed out or filled in for helping to estimate contents values. They have each room as a header and then space to list contents. Then it becomes the user’s place to value the items and create a total (as you say value at new for old pricing).
A selection of some of the calculators and lists none of which I make any recommendations about:
Another good thing to do (as recommended by our insurance broker) is to take photographs of items covered by a contents policy (back these up off site).
Also keep receipts for major purchases.
Both these are useful when making claims as they can prove ownership.