Help please,re jewellery claim, insurer trying to presurise to go with their preffered jeweller or accept a ridiculous c

[dizzyblonde1966]

Help please,re jewellery claim, insurer trying to presurise to go with their preffered jeweller or accept a ridiculous cash alternative of 50%

 

Hi, could someone please help, its quiet urgent as insurance are calling him back tomm

 

Basically It involves a friend of mine who needs help,

His wife had an expensive item of jewellery,a diamond necklace , worth approx £6000 which was lost on a night out

It was insured so no real problem there, had all the documentation,valuations a year or so earlier by an approved valuer,pictures of wife wearing item etc, all sent off to insurer as requested

 

Insurer has been back in contact and have agreed to settle claim, however they have given him a few options, they have said they can make him a similar necklace, however hes obviiously worried about this as he wouldnt be able to view it beforehand and if he didnt like it or didnt think it was of same grade/quality diamonds afterwards would have to reject it and the process start all over again,

 

The necklace had 30 diamonds of various quality of diamonds in it, SI1 and SI2 and hes worried they will put more of the lesser grade ones in to save money, and he wouldnt know the true spec himself of the replacement until he had it independantly valued,which is a catch 22 cause he would have to sign and accept it before he could get it valued independantly

 

The other alternative they have offered is a gift card for the full amount of £6000 (minus the excess) which can be used at various high street jewellers , A gift card is is ok by him but they say it has to be one of their approved jewellers, ie samuals, goldsmiths etc , but he would rather pick his own jeweller as samuals/goldsmiths etc who the insurer want to use are very expensive and he feels he will get a better value replacement if he sources elesewhere,

 

Can the insurance demand he uses their approved jeweller or can he pick his own, and if so is there any wording/cases that he could quote so they cant pressurise him to accepting a gift card with the insurers approved jewellers only ,

 

Lastly the other alternative is a cash settlement,which is his preferred option but they have offered him a ridiculous 50%, he feels this is an insult and they are doing it to pressurise him ,he would prefer a cash alternative as he is going on a cruise in march and there are lots of specilaist jewellers in ports for him to have an extensive choice to pick from.

He understands the cash setlement wont be for full amount based on the kickback they get from the jeweller, but he was hoping for at least 70%, not 50%

 

Any advice greatly appreciated

Thanks

Edited December 11, 2012 by dizzyblonde1966

[honeybee13]

Hello there.

 

I hope the insurance guys will be able to get here in time, but from what I remember from my insurance studies, it is allowed for the insurer to ask the policyholder to go to an approved jeweller. I understood that the theory was that the wholesale type cost should provide the same value for the claimant and save the insurer money. But I believe the insurance company can ask to replace the item rather than to pay out cash.

 

But a 50% discount sounds quite high, so maybe the insurance guys will be able to comment.

 

My best, HB

[dizzyblonde1966]

Thanks,

Forgot to add in the initial post,

It wasnt a standard/common design , hes searched all the major high street retailers online and cant find anything of the same sort of design,

Dont know if this makes a difference but its highly unlikely hede be able to walk into a high street jewellers and buy an identical style necklace .

Thanks

Edited December 11, 2012 by dizzyblonde1966

[caro]

Having had a major insurance claim myself (not for jewellery), and worked in a jewellery factory I have to say that this doesn't surprise me. The insurance company can replace the necklace much more cheaply than your friend could on a like for like basis, and from my days at the jewellery factory, retailers would as a bare minimum be able to charge double what they paid.

 

Also the insurance company would be able to claim the VAT back if they paid for the goods, so cash settlements will always have the equivalent VAT amount deducted.

 

He may well get better value elsewhere, but he should not be better off than he would otherwise have been. If he doesn't think £6k will get him something of equivalent value he could try and negotiate.

[dizzyblonde1966]

I think hes just shocked at the 50% reduction for cash, ie £3000

They are offering a gift card for the full amount of £6000, i have read that insurers get a kickback of around 20% from the retailer,if this is true, would mean the claim is stil costing them £4800 , so £3000 seems very low,

Edited December 11, 2012 by dizzyblonde1966

[caro]

I don't know about kickbacks, but when our house flooded we were offered about half the amount if we didn't replace our goods via the insurance company's supplier.

 

As for jewellery, if items came back for repair I remember they could have price tags on of up to 4 times what we sold them for. I've also done accounts for an independent chain of shoe shops, and they generally paid about half the amount the customer paid so from a business point of view this doesn't surprise me. Insurance companies aim to make profits.

 

As a customer it does seem shocking, but without the VAT a £6k necklace would be £5k.

 

Is it the actual insurance company offering this or a loss adjustor?

[dizzyblonde1966]

Its the loss adjusters who are making the various offers , they appear to be a specialist jewellery claims service used by alot of the major insurance firms,

[caro]

One option might be for your friend to appoint his own loss adjustor. I don't know what it would cost but I'm told it can be worthwhile, as they're working for you instead of the insurance company.

 

Alternatively he could contact the insurance company direct and express his concerns about the LA. We sometimes found this helped but I don't know in this case.

[dizzyblonde1966]

Thanks,

Will suggest to him he rings the insurance company up direct in the morning and express his concerns to them before the loss adjuster calls him back in the afternoon ,

[unclebulgaria67]

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/92/92-insurance-claims.html

 

Read up on how the FOS deal with these claim situations, then speak to the Insurers and Loss Adjuster.