Beware of online valuations

On-line valuations are cheaper and all I have to do is send a picture of my jewellery and they send me a valuation. Why should I get one from a professional jewellery valuer? The existence of this type of document is well known and understood in the personal insurance market and responsible insurers will reject them out of hand when they come across them. The reason for this attitude is simple, by any definition they are not a “valuation” but an opinion of possible value based on a layman’s description and photographs. Valuers have to personally inspect the item and test the metals and identify the gemstones used and you can’t do this from a photograph.

You can also come unstuck if your insurer doesn’t request a valuation at the time an item is added as your insurer will not know that the “valuation” is not a professional document but an on-line version, so is unlikely to be accepted by them. The first time you, as the policyholder, will be aware of a problem is when you try to make a claim and the online paperwork is challenged. The insurer’s claims handlers, often via a management company, will carry out a post-loss validation based on the photos etc. with all the usual problems this entails to ascertain what they think the item is and how much they feel it would cost to replace. You do not want to find yourself in this position.

Not obtaining a good quality, professional valuation at the time you add an item to your insurance is folly. Even if your insurer says they do not need a valuation when you are adding the item, make sure you get one, and send it in to your insurers so if they have any queries about the item they can raise them at the time the item is added, not after it has been lost. One other factor to take into account is that insurance should never be measured by how cheap it is, how glossy the literature is or how little information is needed to organise a policy; it is the quality of the cover and the way a claim is dealt with that is important. Speak to your insurers and ask them how they would settle a claim for the loss of an item of jewellery, particularly if you have an older or hand-made item, and if you are not happy then look for an insurer who would match your expectations.

How does a good quality valuation help settle a claim?

We spoke to John Watson, the Personal Lines Director at T H March, the official Insurance Brokers to the NAJ, and he explained:

“We have been looking after the personal jewellery insurance needs of our retail jewellers’ customers since 1887 and realised long ago that the secret to a speedy and satisfactory outcome following the loss of an item of jewellery is a professional valuation. “We ask for a supporting valuation for every item of jewellery valued at £1,000 or above. We do get a few negative comments along the lines of, “No one else asks for a valuation”, but once we explain the relevance of having a valuation and the effect it will have on a claim most are happy. The reason we do it is to ensure we know what we are insuring and the replacement cost to speed up the claims process. 

How does this help the claims process?

In basic terms a claims handler asks three questions:

1. Is the item covered? 2. How much will it cost to replace? 3. Where are we going to replace it?

“Our approach means we only have to consider 1, which is easy for us as we understand insurance and the cover provided. Point 2 has already been sorted out, there is no post loss validation needed, the replacement cost is as per the valuation we have which has also given us the answer to 3, where will it be replaced? As a result of this we are able to settle genuine jewellery claims far quicker than most insurers. 

“Without a valuation an insurer will have no idea what it is they are insuring and will have to start their underwriting process after a loss, rather than when they actually agree to cover the item, to establish what the item is and how much THEY think it will cost to replace. “We survey every jewellery claim we settle and our satisfaction rate over the last year stands at 98.5%. I guarantee it would be a lot lower if we did not have a valuation upfront. That is why we will persist and continue to ask for valuations upfront.”