How does jewelry insurance work? Reimbursement vs. Reimbursement | You’ll see words such as “reimbursement,” “compensation” in the definition of insurance. This makes sense since insurance policies will reimburse you for any losses and give you a check.
A cash payout is not always the best option for jewelry insurance.
Continue reading to see a comparison between jewelry insurance for a replacement policy and a traditional reimbursement.
How insurance for jewelry is reimbursed
Let’s begin by explaining the traditional insurance system. This structure is typical for jewelry coverage under most homeowner’s insurance policies.
It is effortless to understand how jewelry insurance works at a high level:
- Resolve the claim
- Get your check
There’s more to it than that, but the main question is how much the check will cost.
Actual Cash Value vs. Actual Cash Value vs.
Two main options for insurance companies to value your compensation are actual cash value (ACV) and replacement cost.
According to the Insurance Information Institute, actual cash value “pays damages equal to the replacement value of damaged property minus depreciation.” Alternately, replacement cost is the amount required to replace damaged personal property. It does not deduct for depreciation and is limited by the maximum dollar amount on the declarations page.
You will generally receive a higher payout when you file a claim if your insurance covers replacement costs. This is because most things depreciate.
Jewelry is an exceptional case. It doesn’t always depreciate in the same way as a house or car. The fair market value for jewelry can be affected by normal wear and tear. This baseline is used in some instances to determine whether claims are eligible for reimbursement.
It is simple: Replacement cost coverage is entirely transparent. At the time of your insurance, you will receive the amount necessary to replace the insured. ACV is more complex and can leave you with additional out-of-pocket costs after a claim.
However, in either case, you will have to deal with not only the emotional pain of losing a precious symbol but also the stress of trying and getting a replacement. This may not be easy, depending on how well your provider knows the intricacies of jewelry.
How does insurance cover jewelry repair or replacement?
You don’t need to worry about how your insurance company calculates the reimbursement with a repair or replacement plan. You would receive a piece that is identical to the original if your jewelry was not underinsured. (If you insure through us, it will be of the same kind and quality!)
Variables in the Jewelry Replacement Process
Many homeowners insurance policies that cover repair or replacement jewelry require you to deal with a specific repair service or designated jeweler to settle your claim. To help them find a similar piece, you may have to give them any receipts, descriptions, or appraisals of the original item.
With specialized jewelry insurance like Jewelers Mutual, GroupYour insurance company will deal directly with the jeweler you choose. To help the jeweler match your exact piece, you don’t need to explain every detail. Jewelers Mutual has jewelry experts who can use your most recent appraisal to help you.
Understanding your policy is the best thing to do when you insure valuable items.
There are many options available, but not all of them are right for everyone. Therefore, it is essential to choose the one that is best for you.
Want to find out how much Jewelers Mutual jewelry insurance could cost you each year? You’d be surprised at how much it could cost you. For a quick quote, click the button below. There is no need to provide any personal information.