Most insurance policies charge for coverage based on a dollar amount per hundred dollars of coverage. Actuaries employ reference files that provide average costs of replacement for different levels of coverage on different kinds of items.
Therefore, the premium is usually based upon the insurance company’s cost of replacement, and not on the appraised value.
There are different types of insurance policies and coverage. A Full Value Replacement Policy (Agreed Value) will give you 100 percent of the appraised value if you decide to cash out. Under an Actual Cash Value policy, you will receive only the insurance company’s cost of replacement, as determined by the actuary at the time of loss if you decide to cash out. The FVR policy premium will only be slightly more than an ACV policy. Chubb, Traveler’s and Safeco are a few that offer the FVR policy. You should check into it. This may hold true with other personal property as well as jewelry.
Cos Altobelli is a third generation jeweler and president of Altobelli Jewelers in Burbank, previously located in North Hollywood for 60 years. His specialty is appraising for all functions and acting as an expert witness. He holds a graduate degree from the Gemological Institute of America and the title of Certified Gemologist Appraiser from the American Gem Society. He is the author of three appraisal books and has appeared on ABC-TV’s “Prime Time Live.” Altobelli can be reached at (818) 763-5151.