Myths, Lies, and Half-truths, Part 1*
Each Piece is Unique
"Most every jewelry loss is unique in the sense that an item bearing the same exact description has never been lost before."
This is hardly the case. The majority of jewelry sold comes from outlets like Zales and Macy's, and a certain percentage of these are involved in losses. Such pieces are not unique, handcrafted items, but mass-produced work. They can be described through manufacturer and style number, as well as other details.
Jeweler/appraisers like to omit mentioning the manufacturer and style number because such information would: a) destroy the romantic illusion that all jewelry (no matter how low-priced) is somehow one-of-a-kind and irreplaceable; and b) allow the customer to comparison shop.
The fact is that much jewelry comes from suppliers. Not only chain outlets like Zales but also independent jewelers use these suppliers. If a customer comes in saying she wants a bracelet in style #123 from Such-And-Such manufacturer, the jeweler can find it in the supplier's wholesale catalog, add his own reasonable markup, and give her a price. She could go to several jewelers, then choose the best price.
Such a scenario could eliminate the effect of advertisements for "HUGE DISCOUNTS! 60% OFF!" A customer who comparison shops would easily see through a store's artificially high "list price," and find that the "sale" was no bargain at all.
For the insurer, comparison shopping would hopefully mean that the valuation on the appraisal would reflect the store's selling price—it would not be an artificially high "list price" that no one ever pays. For the adjuster, having the manufacturer and style number for pricing a replacement would greatly simplify the claims process.
It happens that the law is on the customer's (and insurer's) side. The National Gold and Silver Marking Act requires that any jewelry marked as karat gold (e.g. 14K) or silver be also stamped with the manufacturer's trademark. The purpose of the law is to identify manufacturers and hold them responsible for their claims. If the manufacturer's mark is not on the piece, the customer has reason to doubt the claim that the piece is karat gold or silver.
* Claims, a magazine published by National Underwriter, recently carried an article discussing the importance of appraisals in jewelry loss investigation http://www.claimsmag.com/ Issues/archives/ feature.asp. This issue is part of a series in which we use the Claims article as a jumping-off place for discussing some common misunderstandings about jewelry and jewelry insurance.
FOR AGENTS & UNDERWRITING
The law requires that the manufacturer's trademark be on any jewelry marked as gold or silver, but the jeweler should disclose the name of the manufacturer using this mark. Although the law requires the manufacturer's mark only if a karatage mark is present, each piece has a manufacturer. Insist that the manufacturer's name appear on the appraisal, along with the style number, if there is one. Explain to policyholders that this information gives a way to verify the value of the piece and, in the event of a loss, insures an appropriate replacement. You might also mention how the law regarding manufacturers' marks was established to protect the consumer.
Disclosure of the jewelry's manufacturer makes it easier for the consumer to buy at a competitive price, and more likely that the fair selling price will be listed on the appraisal.
"The values set forth herein are an estimate of the current replacement cost at which the appraised jewelry may be purchased in a retail jewelry store and reflects the price at which the appraised or similar jewelry may be purchased at this store (unless stated otherwise)."
The jewelry manufacturer is almost never disclosed on an appraisal. This presents a greater challenge to the adjuster. Begin by asking the policyholder where the piece was purchased. If you know the seller, anyone doing jewelry replacement valuation can analyze who the seller does business with and determine the quality of merchandise the seller generally carries.
You might try calling the seller and asking who made the item. Mention the fact that the law requires disclosure of the manufacturer on all jewelry stamped with karatage.
When an appraisal lacks information on the manufacturer, notify the agent and recommend he be wary of other appraisals by the same appraiser. Suggest that he recommend ACORD 78/79 appraisals to his customers. Such communication between agents, underwriters and adjusters would make everyone's job easier and ultimately would benefit policyholders.
SPECIAL OFFER FOR AGENTS
Help your policyholders learn how to shop for jewelry. JCRS's Consumer Services Site can be incorporated into your own web site and function as a service to your customers.
Explore the Jewelry Consumer Service web site yourself, to see the wealth of jewelry information and shopping advice. Then contact JCRS about having this valuable resource linked to your agency's site.
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