Precious metal (such as platinum, gold and silver) and diamond prices can change drastically over short periods of time. This means your clients could be paying too much (overinsurance) or, more likely, paying too little (underinsurance) for their insurance premium.

Underinsurance occurs if you a policyholder is unfortunate enough to make a claim and it transpires they are underinsured, their insurance will not be enough to cover the cost of an identical replacement. Therefore, they will only receive the amount specified on the policy for that particular item. You can either have a downgraded version of their item or can choose to pay the difference for an identical replacement.  Either option can be easily avoided by having the correct level of insurance cover in place.

Consider this example from a leading insurer, where a valuable collection of jewellery, worth over £30,000.  The jewellery was never valued and not specified on the policy, which had a single article limit of £5,000.  The collection was stolen and the client received just £5,000.

Underinsurance can easily creep up on a client.  A further example occurred where a Gents Mont Blanc watch – last valued in 2003 at £3,129 – was stolen.  The insurer paid that sum to the client when the watch was stolen, however the watch had increased in value and a replacement in 2015 would cost £10,695.

The three scenarios described above can easily be avoided by following these three tips.

Tip 1

Get an up-to-date valuation

Higos strongly recommends that every client who owns precious items arranges valuations in order to ensure the value specified on their insurance policy is correct and appropriate for their needs.  This will prevent any problems occurring in the unfortunate event of a claim being made.  We recommend valuations take place once every five years, as the value of precious materials can rise steeply in a short period of time.

Tip 2

Make sure the valuation contains detailed information

It is extremely important for clients to have a professional valuation, so there is no confusion in the event of a loss. A valuation that states simply … “A Solitaire diamond ring: £20,000”… is ineffective. There are no details of carat weight, indications of grading, details of the mount, whether the ring is antique or modern, or made by a particular designer. This level of information is vital when seeking a replacement stone or piece.

A professional valuation should be fully descriptive with accurate details of the gemstones and materials used, a clear colour photograph (extremely important with unique pieces), and an accurate replacement value stating whether it is an ‘Antique Replacement Value’, ‘Second Hand Replacement Value’ or ‘New Replacement Value’, along with references to any reputable gemstone

Tip 3

Make sure your home insurance policy matches your needs

There are a huge range of home insurance policies available.  At Higos we have access to a number of products from leading insurers, enabling us to make sure the needs of every client are catered for and their possessions properly protected.

To find out more call Higos today on 01458 270 382, email platinumteam@higos.com or visit www.higos.co.uk