What is Like Kind and Quality in Jewelry Insurance?
Understanding the Fine Print
When it comes to insuring your valuable jewelry, the term “like kind and quality” is a crucial concept to grasp. Often found in insurance policies, this phrase outlines the type of compensation you can expect in case of loss or damage. But what does it truly mean for your prized possessions?
Essentially, “like kind and quality” signifies that your insurer agrees to replace a lost or stolen item with another of similar nature and value. Rather than simply providing a cash payout for the declared value, they commit to finding a replacement piece that matches the original as closely as possible.
Why Do Insurers Offer Like Kind and Quality?
The decision to replace rather than reimburse stems from financial considerations. Jewelry appraisals frequently inflate the value of items for insurance purposes, often exceeding their actual replacement cost. Insurance companies can typically procure a replacement piece for significantly less than the appraised value due to their buying power and industry connections.
For instance, if you purchased a ring for $10,000 but it’s appraised at $20,000 for insurance, your insurer might be able to find a comparable ring for less than your original purchase price. This discrepancy benefits the insurance company while providing you with a replacement that closely matches your lost item.
The Importance of Accurate Appraisals
To ensure you receive a suitable replacement in case of loss, it’s vital to have an accurate jewelry appraisal. This document serves as a blueprint for the insurance company when determining the “like kind and quality” of your replacement. It should meticulously detail the jewelry’s specifications, including:
- Gemstones: Type, carat weight, color, clarity
- Metal: Type, karatage
- Design: Style, setting, unique features
By providing comprehensive information, you help prevent any disputes or misunderstandings when it comes time to file a claim.
What Makes Something “Like Kind and Quality?”
But that’s not the end. What makes something like kind and quality ? That’s one of the reasons they’re asking for an appraisal in the first place. It’s in the description, photos, weights, dimensions, etc. from the appraisal.
The appraisal effectively becomes the purchase order for the replacement. They need to meet or exceed the specs provided or it’s not like kind and quality.
If you had a 1.06-carat diamond, for example, they need to get you a 1.06-carat or greater replacement. If it was VS1, they need a VS1 or better. Every line item works this way.
If it’s not on the report, they make assumptions and they get to negotiate. That’s where a lot of trouble sneaks in and this is one of the reasons they’re asking you to provide the appraisal instead of just doing it themselves. They could, you know.
For example, if it doesn’t say who made it, they get to use anyone they want to make the replacement. Even if it DOES say, they can offer an artist of ‘like kind and quality’. If it doesn’t say if it was fabricated or cast, they get to make it however they want. Origin of stones can be a problem. Australian opal is a very different marketplace from Ethiopian opal for example.
Age can be an issue. An antique piece can be replaced with new if it’s not appraised properly. Hearts and Arrows symmetry in diamonds have been a bit shopping topic lately and if it doesn’t say, they get to pick. If it was important to you when you were shopping, it should be in the appraisal.
Choose your appraiser carefully, just like you do your jeweler. They’re not all the same and it’s not just part of the packing materials. A bad appraisal is worth less than it costs, even if it’s free because it undermines your insurance. It makes like kind and quality something that the replacement jeweler gets to decide instead of you.
Professional Like Kind and Quality Jewelry Appraisals in Denver, Colorado
The American Gem Registry provides a variety of jewelry appraisal services in Denver, Colorado:
- Like kind and quality Appraisal for Insurance
- Gem and Jewelry Appraisals
- Estate Evaluations
- Expert Witness
- Pre-Custom Consultation
- Re-Cut Consultation
- Damage Consultation
- Restoration Evaluation
- Re-Cut Consultation
If you have any questions, please call during my normal business hours at the number below. Or, you can schedule your Jewelry Appraisal Appointment online today!