Insure to match the market
It’s time to review insurance if you own gold and diamonds, writes Sarah Daly.
GOLD and diamond prices are on the rise, but owners are not insured to match current market conditions, industry experts say.
US gold prices peaked at more than $US1900 an ounce earlier this month and last weekend it was trading at almost $US1830 an ounce.
RAA insurance claims manager Tony Phillips says market information also indicates a 40 per cent increase in the wholesale price of diamonds under 0.5 carats, and 15 per cent for stones over 0.5 carats.
‘‘Most people are likely to have diamonds in the under-0.5-carats range and I see too many cases where customers want to replace a cherished piece of jewellery and have to settle for a lesser piece because their valuation is out of date with current market conditions,’’ he says.
Mr Phillips says there is an unbalanced focus on new purchases when it comes to rises in gold and diamond prices: ‘‘It’s easy to overlook the rings and favourite items we wear every day, but they may be worth a lot more now.’’
Ian Berry Insurance spokesman Paul Modra suggests reviewing your home-and-contents policy once a year to make sure it is up to date. ‘‘You should always review your level of cover because even though you may have taken out $20,000 three years ago, because of jewellery values going up, the amount may no longer be enough,’’ he says.
Mr Modra says conditions vary by policy and insurer, so it is also important to consider your specific policy: ‘‘Although you may have, say, $50,000 of home and contents insurance, it may not cover the total cost of your jewellery, so you need to make sure you have specified valuables cover,’’ he says. ‘‘You may also have to get more expensive items valued, depending on the limits set by your insurer and the specific policy.’’
Despite the rising prices, Class A Jewellers managing director Brad Mucklow says he has not noticed more customers having their jewellery revalued.
‘‘In the past, valuations have stayed relevant for as long as five to 10 years but . . . I would recommend a new valuation if your existing one is more than two years old,’’ he says.