Jewellery, replace & Repair options

Insurers usually agree to settle claims – but often do so in a way that the policyholder considers inappropriate.

The insurer may, for example, offer to repair a damaged item when the policyholder wants instead to receive a replacement. In other instances, the insurer agrees to a replacement but insists that it is obtained from a specific retailer.

Most household policies now provide 'new-for-old' cover but leave it to the insurer (not the policyholder) to decide whether the claim should be settled by repair, replacement, reinstatement or cash settlement.

Where insurers opt for repair, if the repairer is chosen by the insurer – or its agents (such

as loss adjusters) – It is likely to be concluded that the insurer will be responsible for ensuring any deficiencies in the repair are put right. If the policyholder has insisted that a particular repairer should carry out the work, then it is likely to be concluded by the insurer that the policyholder will be responsible for the quality of that work.

Where insurers opt for replacement, it is important to consider whether a reasonable replacement can be obtained in the way the insurer has proposed.

If, for example, the item concerned is jewellery that is antique or specially-commissioned, then it would be considered unfair for the insurer to insist on the policyholder buying a modern substitute from a major high-street retailer. In such cases, the normal advice of an appraiser would be that policyholders should be allowed to choose where they purchase a replacement and are entitled to a cash settlement (without the deduction of any discount) if they are unable to find an acceptable replacement.

Where a reasonable replacement can be obtained from a high-street retailer, insurers often specify which one – because they have a discount arrangement with that particular retailer. It is likely that the advice would be that this is reasonable if the consumer lives within easy travelling distance of that retailer – and the retailer can provide a reasonable replacement.

Sometimes, policyholders prefer to have a cash settlement even though there is no practical reason why they could not visit the insurer's preferred retailer – and that retailer is able to provide a reasonable replacement. In such instances it not usually considered unreasonable for the insurer to deduct from the cash settlement any discount it would otherwise have obtained from the retailer and they usually will.

At all times of claim however it is vitally important that the claimant can prove ownership or purchase at the very least. A proper, detailed valuation by a member of the Institute of Registered Valuers (IRV) or The Association of Independent Jewellery Valuers (AIJV) is a guarantee that the claim will be settled satisfactorily. The valuer will be able to explain the options during the valuation process and prior to any claim arising and the policyholder will be able to deal with the claim knowing all the facts beforehand.