Your jewellery WILL have increased in value – the question is by how much?!
09/02/2021
09/02/2021
It is widely known that the value of jewellery will increase over time. What many people don’t realise though is just how much and how quickly this growth in value can happen. There are a huge range of different factors that can influence this, not least the availability and demand for the raw materials.
According to www.gold.co.uk (a bullion investment and vaulting company and the UK’s largest authorised distributor of Royal Mint bullion coins), since November 2018, the cost of an ounce of gold has increased by 60%, silver by almost 85%. Much of this growth has occurred over the last 6 months, as the effect of COVID has taken hold on the economy and, as is commonly the trend at times of economic concern, investors have turned to precious metals. James Lowe, Watch and Jewellery specialist at Doerr Dallas Valuations, goes further “The price of gold in 2003 was about £340 per ounce and it’s about £1130 per ounce today having peaked around 2012 at £1313 ” this is just short of a 335% increase.
There are a number of other factors that will influence the retail price of a piece of jewellery; fashion trends, manufacturing costs and retail mark-up can all have a considerable impact. James adds that “Profit mark-ups are a big variable – about 30 years ago when I was first involved with jewellery the tacitly accepted mark-up was to double the cost price and add VAT. Now, for a retail shop, mark-up can be a whopping 300% to 350% plus VAT”.
If you’re not someone who buys jewellery regularly, this may all seem a long way removed from you, but market changes such as this could mean that the items in your jewellery box are now worth significantly more than when you bought or were given them.
To help emphasise this, James gave a few examples of pieces he has valued and how they have increased over the years…
A pair of Chopard 18 carat white gold and diamond ‘Happy Diamond’ drop earrings.
A pair of Tiffany platinum and diamond ‘Victoria’ ear studs
An 18 carat yellow gold and mother of pearl 20 motif Vintage Alhambra necklace from Van Cleef and Arpels
You are likely to be aware that policies have a ‘single article limit’ but did you know that there will also be ‘an overall limit’ on the total value of jewellery in the house, one that is much lower than your total contents sum insured? Do you know the implications if you exceed either of these limits?.
The ‘single article limit’ is the most the insurer will pay per item of jewellery. If you have any items that exceed this figure, (for example, a limit of £2500 and an engagement ring worth £3,000) they must be specified on the policy and an up-to-date valuation will likely be required. Failing to specify an item will mean it is underinsured or it may not be insured at all.
The ‘overall limit’ is the most the insurer will pay out in any one claim for these items. It may also be the most they will accept being in the house at any one time. If the total value of your jewellery and watches exceed this figure, you must tell the insurer. Hopefully they will simply extend the cover for you, but they may tell you that you are not eligible for the policy and you will need to find a more suitable contract. Even if you’re happy to accept the standard limit of cover they provide and to take the risk of being underinsured, do not be tempted in keeping quiet. If the insurer finds that you have not disclosed an accurate sum insured and if they would not have offered you cover had they known the correct figure, then they will be within their right to declare the entire policy null and void. The most likely time this will come to light is in the event of a claim, by which point it’s too late.
Its important to note that some policies, particularly those that give a ‘blanket’ sum insured for Contents i.e. one that has a pre-set limit of ‘up to’ £75,000, £100,000 or similar, and even those policies that provide an ‘unlimited’ sum insured, will potentially group jewellery and watches under a wider heading of ‘Valuables’ or ‘High Risk Items’. This will generally include other items such as art work, cameras, items made of precious metal and some other collectables. In some cases it may also include electrical equipment such as laptops and tablets. The overall sum insured they allow for this section therefore needs to be sufficient to cover all of these items, as well as your jewellery and watches and can quickly be exceeded.
If you’re fortunate enough to have quite a bit of jewellery or a number of valuable pieces, and you aren’t already on a specialist High Net Worth policy, you may want to consider moving to one. As well as being able to cater for higher overall values, these policies will carry higher single article limits. A typical home insurance policy will have a single article limit ranging from £1,000 up to £5,000, whereas a High Net Worth policy will generally start at around £15,000 to £20,000 with many going higher than this. This will reduce the number of pieces you have to specify and give greater room for unspecified items to grow in value, without becoming under or un-insured.
A High Net Worth policy should also provide more flexible terms in respect of security, allowing higher sums insured before they apply requirements in respect of burglar alarms or a safe.
If you are at all concerned as to whether you have the right policy or if there is another that would be more suitable for your needs, please just call or email us. We’re here to help and can easily give you the necessary guidance to ensure you have the right cover for your personal circumstances.