Proper coverage needs a proper appraisal

Valentine’s Day can mean jewellery – so it is a great opportunity for brokers to reach out to clients and suggest an appraisal of everything that glitters.

Risk Management News

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Valentine’s Day can mean jewellery – so it is a great opportunity for brokers to reach out to clients and suggest an appraisal of everything that glitters.

“Jewellery represents a major token of love and passion at Valentine’s,” says Christiane Fischer, president and CEO of AXA ART. “This presents a perfect opportunity to speak with collectors about protecting their jewellery, integrating the topic of valuation into the conversation, as insureds might not be aware of the actual growth in the value of the jewellery collection over time.”

Most home insurance policies include coverage of expensive items such as jewellery. However, many policies include a low limit of liability on the loss of jewelry in the event of a claim.

Opening a conversation on the subject can seem a bit awkward – but Valentine’s Day is the perfect excuse to do so, Fischer told Insurance Business.

“Insurance brokers should have conversations with their clients about the protection of their collectible assets,” she says. “The conversation could start with questions such as:  ‘Are your art and collectible items including jewellery adequately valued? How recently have you assessed the value of your valuables? Does the size of your collection warrant a quote from a specialized carrier which has the resources to review values and advise if your limits are adequate or need updating?’” (continued.)
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Fischer says that questions like these can often prompt a collector to put into perspective just how significant an asset their jewellery collection really is.

Jonathan Smith, regional underwriting manager for national underwriting services at Aviva Canada, says a reappraisal should be done at least every five years.

“Here at Aviva, we require an appraisal every five years,” Smith told Insurance Business. “We don’t want to put an insured to an expense that is unreasonable – it is $120 or $150 to get an appraisal – so we want to be reasonable in our requests.”

Although there is a cost involved, there are two very good reasons to have an appraisal, Smith points out.

“One – to ensure the clients is going to be indemnified for the full value of their item. If the item is 10 years old and has appreciated over time and there is a loss, they are only entitled to what is on the policy,” he says. “And on the flip side, with all fairness to the insurer, it ensures we are getting the appropriate premium for the risks that we have.”

Including a note in the renewal bringing the need for a reappraisal to the attention of the insureds that they do have special limits in the policy, and if the insureds have any items over that amount, then they should contact the broker to better assess what they options are, says Smith.

But as he admits, clients recognize the need for insurance of their valuables, but are reluctant to pay the adequate premiums.

“You can sell them the coverage; they begrudgingly pay the premiums at the end of the day,” says Smith.  “I think if the broker explains it properly, an insured will understand.”

 

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