When you think about protecting your diamond, it is important to consider having your diamond insured. You wouldn’t hesitate to insure a high-end car like a Ferrari, and why shouldn’t you do the same for a diamond? Your diamond piece of jewelry will be protected against theft, loss, or any other unfortunate events. There are three types of insurance available: Actual Cash Value (Replacement Value), Agreed value, and Advanced Value. It is important to be familiar with the different types of insurance policies available before you decide which coverage is best for you.
Today, Replacement Value Coverage is the most popular type of insurance policy. It is not the most widely used insurance policy, but it does not necessarily mean it is the best. This policy, as its name implies, is based on a predetermined replacement monetary value that will be used in the event of a diamond being lost. The insurance company is not liable for the full amount stated in the policy. They could instead seek out the preferred diamond jeweler they prefer, who may be able to provide a replacement item for a lower price than the policy’s fixed replacement value. It is important that you consult a third-party appraiser to confirm that the replacement item is comparable in quality and value to your original diamond jewelry.
Contrary to Replacement Value Coverage which provides a fixed monetary amount, Actual Cash Value, often abbreviated simply as ACV, works in a completely different way. The policy provides that the insurance company will pay the current appraised price of the diamond in the event it is lost or damaged beyond repair. Although the method of calculating this value varies from insurance company to insurance company, they all use the current exchange rates for diamonds. This policy has a disadvantage. It does not consider the original amount paid by the customer. Instead, it only takes into account the current value.
All things considered, many people believe that ACV policy is not reaching its full potential when it comes to diamond insurance. The Agreed Value policy is the best. This coverage is based upon a monetary agreement between the insurance company and the client regarding the value of the diamond. The policy holder is responsible for providing the exact amount agreed to by the insurance company. Every policy is unique and each one is different. Also, the insurance company is obligated to provide the exact amount agreed upon with the policy holder. This type of coverage is not offered by most insurance companies. They consider it to be too expensive and unprofitable. Even if an Agreed-Value policy is offered, policy holders will need to pay a higher rate of premium in return.
There are three main types of policies available for diamond jewelry coverage. They are very different. The Agreed Value policy is the best option for coverage. If this policy is not possible, the Actual Cash Valu insurance should be considered. Even though Replacement Value Coverage may be the most sought-after policy, it is not the most desirable.
No matter which diamond insurance policy you choose, they will all take into account the monetary value of your diamond as well as the location in which it is located. You could pay more for diamond insurance if you live in an area with high crime rates or in a poor neighborhood. Protecting your investment in diamond jewelry is an important step you can take.
