This subject has again become a hot topic as over the past 12 months the price of gold has increased by a further 47%. This means that since 2001 the price of gold has increase by a whopping 537%!
It has caught the attention of mainstream media as recently the BBC ran a report on Breakfast news about how this has effected to price of jewellery and watches and more importantly how it affects insurance policies – see the video news feed below.
Owners of jewellery and watches should be aware that their items now cost substantially more to replace compared to a few years ago, let alone 10 years ago.
This means if policy holders have jewellery items that they have not had professionally valued over the past few years then it is likely that the values on their home insurance policies are well under stated.
In the event of a claim owners of these items can find themselves out of pocket, or not being able to replace lost, stolen or damaged items to the same specification.
Index linking, a practice that increases the insured amounts on a home insurance policy at each renewal, is not adequate. This is because the index linking percentage rate is linked to the retail index and is designed to increase the general contents amounts on a policy.
Jewellery items have a market value, and so index linking is irrelevant. I tend to find low quality home insurance policies index link jewellery as the insurer’s expertise is not suited to insuring jewellery items correctly.
Insurers will only pay out up to the amount specified on the policy schedule, or their policy limit if items aren’t specified. The policy limit should be checked to ensure they are adequate.
So what can be done to avoid under-insuring jewellery? Here are a few pointers:
1. Read the insurance policy to be familiar with the cover
2. Lay out all your jewellery, including anything inherited, as these items are often overlooked
3. Take your jewellery to be valued or if you have many items of high value contact a professional jewellery Valuer. They will come to your home to conduct large valuations.
4. Consider moving your insurance to a broker that has experience and policies to correctly insure jewellery. Direct insurers and call centre staff are unlikely to be expert in the area.
5. Send your jewellery valuations to your insurance broker so they can arrange appropriate cover.
6. Put the cost of premiums and valuations last. Losing your jewellery and having it under-insured will cost you a lot more money and heart-ache.
7. If you have a safe then you could substantially reduce your premium, especially if some items are always kept locked up.
8. Consider putting items you never wear in a bank safe or safety deposit, especially high value items. You can still insure your items here and the premiums are very low because of the low risk of theft.
For further advice call Entrust Insurance Services on 0844 272 5358 or visit their website.