Complaint 1 of 8 in “Offering Too Little Money”

Consumer Complaint:

I had a wedding ring insured for $11,500 which was lost. When I filed the claim, travelers insurance had their own jeweler appraise the ring at $6300. I have since taken the E.G.L. and all the information about the ring to 3 separate jewelers. the estimates were $11,100 – $10,630 – $11,399.

Insurance Expert Answer:

It's important to find out exactly what your policy says, how your policy is written to determine what was promised to you and thus what you reasonably can expect. Was it replacement value at retail at time of purchase (or loss), or the wholesale value at loss, or did it provide the carrier could provide an actual replacement with a stone of equivalent size, cut and quality? One of the historic problems that is particularly acute with insuring diamond rings and other jewelry is that insurance companies have lots of experience with claims that shows some claims are made when a couple breaks up and the ring is \"lost\" or hard times hit and the ring gets \"lost\" and the proceeds will NOT be used for a replacement ring (\"Nothing can ever replace the original engagement ring, It had priceless sentimental value.\")

Thus my understanding is some policies only provide for the company to provide a replacement stone, which the company knows it can buy wholesale for half or less of the retail price. (Many jewelry items are sold at \"triple keystone.\" Just go to 47th Street and Fifth Avenue in NY to see how mark-ups and prices can vary, and how typical standard gem stones -- not the Hope Diamond -- are priced.) Having provided them 3 local estimates, you demonstrated likely local retail value. But if their policy clearly provides for a different standard, the company only has to pay what the policy promised. The best approach is to send them a polite letter, attaching copies of the 3 retail appraisals, asking them how they calculate their value and to explain the difference. The alternative is a letter of complaint to the State Insurance Department or small claims court. We would love to learn how this turns out.