What Are Replacement And Reimbursement Jewellery Insurance Policies?

By Author: Ajay Agarwal
Total Articles: 69
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How does the reimbursement jewellery insurance policy work?
Let us first understand a typical insurance policy model. This model is similar to the structure of the jewellery cover provided under the general homeowner’s insurance policy. In a typical homeowners insurance policy, the jewellery is covered against loss, theft, or burglary when the jewellery is inside the house. Moreover, the process of applying for the claim is comparatively lengthier in comparison to the jewellery insurance policy. 
 
The structure of the jewellery insurance policy provided by jewellery insurance companies in India is very simple:

Buy the jewellery insurance policy
File for a claim
Settle the insurance claim
Get the reimbursement cheque

 
These processes work a little in detail, however, the point to consider is the amount that is to be reimbursed in the cheque.
 
Replacement cost vs the actual cash value
Jewellery insurance companies ...
... select the compensation value in 2 ways: replacement cost and actual cash value or ACV.
 
The case of jewellery is very unique. It does not depreciate in the same manner as other assets such as cars, houses, etc.
 
As per a jewellery insurance company, in the actual cash value method, the claimant is paid for the damages that are equivalent to the replacement value of the damaged jewellery minus the depreciation. 
 
Whereas, in the replacement value method, the claimant is paid the amount necessary to replace the damaged jewellery without deducting the depreciation. But the amount is limited to the maximum amount mentioned in the declaration of the jewellery insurance policy.
 
In general, the claimant receives a larger cheque payout during the claim if the jewellery insurance policy is derived from the replacement cost method, as most items slowly depreciate with time. Normal tear and wear could affect the jewellery’s market value, which in either way is the reference price point used to calculate the reimbursement amount in the claims in a few cases.
 
In simple terms, in a replacement cost jewellery insurance policy, the claimant receives the amount which is required for the replacement of the insured jewellery. The insurance policy based on ACV however has many loopholes and you may end up paying extra from your pocket post the claims process.
 
How does the replacement or repair of jewellery insurance work?
With the replacement or repair insurance policy, you do not need to be worried about the method used by the jewellery insurance company to calculate the reimbursement. If your jewellery is not underinsured, then you would obtain a piece of jewellery that would be indistinguishable from your original jewellery as part of the claim. 
 
Certain variables with the replacement process
With the homeowner’s insurance, the jewellery replacement or repair policy mandates that you work with the designated jeweller or the repair service to settle the claim. Wherein, you are required to provide details about the receipts, appraisals, and descriptions of the previous jewellery item in order to get a comparable jewellery piece as a replacement.
 
With the dedicated jewellery insurance policy, the insurance service provider works on your behalf and connects directly with the jeweller for the claims process. Moreover, you do not need to worry about the hassle of explaining how your original jewellery looked for the jeweller to recreate a piece of the similar jewellery. 
 
Most jewellers employ expert jewellery artisans who could recreate a piece of jewellery similar to the original jewellery, having the same value and preciousness.
 
While taking incense for the jewellery, it is important to understand the contents of the policy. Therefore, you must thoroughly read through the contents and the terms of the policy to gain proper knowledge about what is included in the policy and the terms of applying for a claim. 
 
Check through various jewellery insurance options to find out the best option for your jewellery. If you want to know about the best jewellery insurance companies India, you must visit O-Locker today.
 
It is important to understand the reimbursement and replacement of jewellery insurance policies. Visit O-Locker to know more.