Most Homeowners and Business Insurance policies cover jewelry losses at a reduced limit – typically a maximum figure between $1,000 and $2,500 (depending upon the insurance company). This would include any piece that consists of precious metals (gold, silver, platinum) and precious stones (diamonds, colored gemstones). Therefore the cost of replacing or repairing high-value jewelry could be a considerable amount of money if adequate insurance coverage is not in place. Different insurance carriers, different types of insurance policies, and different options within policies allow for or require different types of valuation of the property. Understanding the definition of these valuations is vital in understanding your policy and in making choices about what type of coverage you wish to purchase. Jewelers unBLOCKed™ Collector Edition™ can also integrate Homeowners along with proper VAC coverage.
Types of Coverage
Valuable Articles Coverage
Valuable Articles Coverage (VAC) provides the individual collector with the ability to cover their jewelry collection by “scheduling” pieces (individually listing and describing each piece). Jewelers Block coverage provides a business (i.e. jewelry dealer) with insurance to cover stock held for sale. In each case, the policyholder may elect to cover their entire collection or stock, or selected individual pieces – providing flexibility and allowing for differing risk tolerances of the insurance buyer.
Replacement Cost. This valuation provision provides for replacing the old damaged property with new replacement property at today’s replacement cost, without any deduction for depreciation. In order to determine this cost, the claims adjuster will review the appraisal on file for the piece that is the subject of the loss, and replacement will be of like kind and quality.
Actual Cash Value (ACV). This provision is determined by subtracting depreciation from the property’s replacement value. The evaluator determines what it would cost to replace the jewelry and then applies a depreciation factor based upon the age of the piece.
Specified Value. Also referred to as Agreed Amount, this valuation clause stipulates that the limit agreed to (at the time of policy issuance) by both the insurance company and the policyholder with regard to a specific piece is the maximum that will be paid for that piece in the event of a loss. Generally, the appraised value is used, but it could be set at the appraised value plus some percentage if the piece is one that will appreciate in value over time.