Jewelry Insurance Alert- You May Be Underinsured

September 29th, 2012 by James L. Sweaney, CGA, FGA. GG

Because of significant price increases for diamonds, colored gemstones, and precious metals over the past few years, we are advising many of our clients to update their jewelry appraisals and to increase their jewelry insurance to reflect current pricing.

For example, prices for round diamonds 1.00 to 1.50 carat have increased on average 20% at the wholesale level over the past year. In some cases, larger diamonds have shown even greater increases. To the consumer, this means a one carat diamond that sold for $6300 one year ago will now cost at least $7900!

Fine quality colored gemstones, especially rubies, emeralds, and sapphires over one carat are in scarce supply and are fetching very high prices. High demand in Asia and low levels of mining activity have led to a kink in the supply chain.

Gold, after an historic 5 year increase of around 300%, has risen about 25% in just the past year.

If you insure your jewelry and haven’t had your jewelry appraisals updated within the last 5 years, you may be underinsured. Should you need to claim a loss on jewelry, for whatever reason, your insurance may not cover your loss.

We strongly recommend having your jeweler review your jewelry appraisals to see if you need updating and an increase in your jewelry coverage. The increased cost of insurance is small compared to the increased cost you may incur in replacing your jewelry if you are underinsured.

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