How Much Is Your Jewelry Worth?
The retail price of a piece of jewelry is an indication of its value. However, retail price is for insurance purposes only and also applies to new pieces. Consumers usually have their jewelry pieces that have just been purchased appraised to find out how much it will take to have them replaced.
Jewelry Insurers Pay Lesser
There are two different types of jewelry replacement insurance which are referred to actual cash value and agreed value insurance. A large percentage of consumers often buy actual cash value insurance and such buyers need to know that this type of policies do not make it mandatory for the insurer to pay them the appraised value. However, the insurer works with the replacement value of the jewelry.
Actual Cash Value
This is defined by insurers as the actual cash value before depreciation due to wear and tear and obsolescence of the jewelry piece. The premium is calculated on the degree of risk which means that the insurer can pay a much lesser amount than the figure stated on the policy.
Agreed Value
Agreed value policies offers a guaranteed full-dollar amount that is equivalent to its retail replacement value. Such a policy is usually more expensive than actual cash value policies as it represents an agreed up-front value that will be paid in case of a theft or loss. Nevertheless, this means that there needs to be an adjustment to the value every two years or so to reflect the exact retail market price.