According to the National Retail Federation, consumers were expected to plunk down $18.2 billion last month on gifts for significant others, family members, friends, classmates, teachers, co-workers, and well — yes, pets. Almost one in five givers (18 percent) will buy jewelry, spending a grand $4.3 billion on sparkle, all told.
That's a lot of jewelry, and it's only a matter of time until a certain percentage of those pieces are damaged, lost or stolen, resulting in jewelry insurance claims.
The most common cause of loss?
Theft is one of the most common causes of loss for jewelry, representing four in 10 claims.
According to FBI statistics, burglaries are most common in the summer. They're least common in February. That said, our data shows a run up in burglary claims during the holidays, tax time and back-to-school season.
Jewelry is a category leader and in particular, rings — everything from copper baby rings to gold high school class rings — top the list for most claimed item. Looking at Enservio claims data, more than 46,000 rings were claimed by insureds in 2013. In 2016, overall jewelry claims represented a replacement cost value (RCV) of $100 million, a jump of 54 percent since 2013.
When worth matters
Unlike some other household contents, the value of jewelry is not black and white. Pieces can appreciate or depreciate over time, and sentimentality may come into play. For example, the perceived value of an heirloom piece can be much different than the actual value.
Without policyholder guidance and proactive communication on the topic of jewelry valuation, jewelry claims can quickly become customer experience landmines.
(Photo: Shutterstock)
Pre-claim communication
Long before a jewelry claim is filed, insurers should educate their customers on essential jewelry inventory and valuation practices. They should also educate customers about covered causes of loss and what to expect in the claim filing process.
1. Take an annual inventory of your jewelry pieces using a home inventory app. Your inventory should include photos or videos of your jewelry from every angle. Keep a written description of your pieces, along with receipts, purchase dates and any other relevant information. Do it yourself via mobile devices is the mantra for millennials who demand 24/7 self-service access such as insured access portal that allows insureds to build inventories, redeem payment and choose payment options.
2. Visit a jeweler who is qualified to perform an appraisal. If the insured piece includes precious gems (including diamonds), it should be sent to a gemological lab, such as GIA, which will issue a certificate of its worth.
3. Once you have an appraisal, confirm its accuracy on the street. Find out if local jewelers are willing to buy your piece at the appraised value.
4. Verify the source of unique pieces. If your jewelry piece carries the brand of a particular studio or artist, document and verify with an official certificate of authenticity.
5. Be aware of jewelry insurance policy limits and terms. Ensure that your insurance policy limits keep pace with any increases in your jewelry's value. Clearly understand the covered causes of loss under the policy. For example: Is mysterious disappearance covered? Are international losses covered?
(Photo: Shutterstock)
Below are a few ways that claims professionals can improve jewelry adjusting accuracy:
- Routinely collect receipts, appraisals, purchase documentation and police reports. Make it easy for policyholders to submit this documentation through your online claims filing portal or mobile app.
- Gain access to a database of average jewelry retail values and claims category leaders.
- Use technology and predictive analytics to establish rules and processes for approving routine claims and red-flagging suspicious or high-value claims.
- Beware of the highest-volume jewelry claim months of December, April and September. Consider adding an additional layer of review during these months.
When you educate policyholders on proper jewelry valuation and claim submission procedures, insurance loss ratios should trend downwards and customer satisfaction will rise. And that's the kind of sparkle that withstands the test of time.
With more than 20 years in insurance, Scott Lacourse is director of marketing at Enservio, a provider of contents claim software, payments solutions, inventory and valuation services for property insurers. Contact him at slacourse@enservio.com. Disclaimer: Enservio does not sell or market the products mentioned in this article.
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