I would be really grateful for some advice from forum members.

A few weeks ago we were burgled and all of my late mother's jewellery was stolen, together with my father's watch, cuff links and signet ring and a few items of my own jewellery, including a pair of earrings by a Danish designer. Oh, and a kitchen knife(!). I got a valuation for the earrings and the knife and our insurance company, More Than, sent us a cheque for the amounts involved.

Because all of the other jewellery was at least 40 years old, and in some cases over a hundred years old, we were referred to a specialist valuation company. I supplied a detailed list and some drawings of the jewellery and after a two hour telephone call with this company last week they arrived at a valuation of £4,855 and said that they would send a replacement card, to be spent at two high street jewellers. My hobby is silversmithing and I make most of my own jewellery, so I asked the loss adjustor if they would pay me cash, as I would be most unlikely to spend nearly £5,000 in a high street jewellers. The cash offer they have come back with is £3,155.75, which is 'the figure we would pay them (the jewellers), net of the available discounts'. I was taken aback at the reduction of 35% I must confess. I had expected a reduction of some kind, but not this much.

My question is, do I now haggle over the sum offered? What would be a normal discount in a case such as this? My policy says 'Where we are unable economically to repair or replace an item with an item of similar quality, we will make a cash payment equal to an agreed replacement value'. I've agreed with the £4,855 valuation, but not the lower figure. Why did they give me the full valuation of the designer earrings, but only want to give me 65% of the value of everything else? Okay, that's three questions, but you get my drift.

Any advice would be very gratefully received.

Susan

Susan,

Firstly, sorry to hear about the burglary especially where such items were taken; unfortunately there is no monetary value that can be placed on such a sentimental loss. I hope the thieving b astards are caught and given more than a slap on the wrist (or practically a pat on the back in some cases we read about these days!!).

I can see your dismay at the reduction but, in all fairness, I can see this from the eye of the insurer. I'm actually quite suprised they didn't make the original offer of supplying the replacement goods to the value of £3,155.75 in the first place. I would say that the sourcing of specific items to your taste and your own knowledge/description of the stolen items, together with such sentiment, encouraged the insurer to settle in a form of 'cash' settlement with the restricted useage at two high street jewellers.

As you can imagine, when a loss occurs, it's can be quite costly for the insurer to cover the loss - especially where high value items are being covered. It's absolutely vital that the insurer has a network of varied retail companies that offer large discounts if the relationship continues with them and with high frequency. If they didn't, the claims pay out would be significantly higher and the end result would be to put the premiums up! I'm no expert when it comes to jewellery and I have no idea how much the 'cost price' of a pair of earrings would be that retail at, say, £100. You would probably have a better idea about it than me given your trade. Following on, the insurer would have a larger discount than the average 'Sale' price because there will be a high frequency of purchases by them given that jewellery is classed as 'attractive stock' or 'attractive content' and if somebody is burgled, or if there is a fire causing a total loss, the jewellery is frequently claimed for.

It's extremely difficult for an underwriter to accept a risk that involves items appreciating in value; eg. antiques. Antique shops rarely have full cover for the items they are selling, mainly due to the selling of one item could dramatically reduce the risk value and also because the price will fluctuate. Their cover can be quite costly and will usually be found to have a 'franchise' clause - ie. claims are only met if over a certain pre-specified value or threshold, which will reduce the premium significantly because the insured agrees to meet a claim upto a certain value, lessening the risk. I'm mentioning this because this could assist you in some way, or it could be to your detriment if you don't use the advice wisely (!). You mentioned that you supplied a detailed list and some drawings of the jewellery to a specialist. This is good, but without seeing the items, how could they possibly give an accurate up-to-date valuation? Who is to say that if you took this list to three or four other valuation specialists you would get the same value? You may have got the exact same value to the penny but the bottom line is that there is no real set value to these items given the age of them and the product type. That's all I'm going to say on that bit, and use it at your own peril!

Finally, I just want to make you aware of ICOB 7.5.13 (1) Unless the insurer accepts the retail customer's claim in full, the insurer must explain why it rejects all or part of the retail customer's claim or makes a compromise offer, specifying any relevant term of the policy. (2) The insurer must offer the retail customer the choice of receiving the information at ICOB 7.5.13 R(1) in a durable medium. (Where R is a Rule. Retail Customer is anything other than commercial... you!). ICOB 7.5.18 (1) Settlement terms are agreed when: a) the insurer accepts the retail customers claim; and b) the retail customer accepts the insurer's offer of settlement. The insurer has explained that they would receive the discount, which I can understand, but you do not have to accept the compromise offer.

Nearly there now.... Arbitration! Ooh the good bit! (It's still boring, however :o( )... Many (but not all) insurance contracts contain an arbitration clause meaning that if the claimant feels that the amount offered in settlement of their claim is incorrect or unjust, they have the option of referring their dispute to arbitration. Insurers prefer arbitration to litigation because it allows the disputes to be settled in private by someone who has expertise in the subject of disputes with settlements. A court of law and the judge may have no particular expertise in the surrounding issues. Please remember that this does NOT mean the arbitrator sides with the insurer, as this is not always the case but is in the majority as the insurers have more experience in this area and get it right more than wrong!! Don't take that the wrong way?! There is usually only one arbitrator but sometimes upto three. One can be chosen by each party with the third being chosen as chairman of the 'hearing'. You can have two arbitrators but this runs the risk that they will not be able to agree. The tribunal/arbitration will allow each side to present it's case and respond to its opponent's case. Both will act impartial and fairly at all times and in return, both parties will co-operate with the tribunal. Note that the arbitrator has the same powers as the courts to order parties to do something and to order rectification. You are able to challenge the findings at the tribunal, but only on specific grounds as the arbitrator's decision is final on all questions of fact. See the Arbitration Act 1996 (as governed) RE: powers and processes to be followed. The compromised decisions are often justified by the facts and issues, but not legally. The results could impact on claims experience as parties with weak cases may decide to arbitrate rather than settle. At this stage, I'd suggest you have a 'weak case' - but it's still a case! It does have consequences for estimating the cost of the claim and the reserve amount.

You should also consider, if claiming for a higher amount, whether the insurer will take the stance that you possibly might be underinsured for the value of goods you originally specified against the loss incurred. They could schedule a check up at your property of the total value that you should be insuring for. So, to this effect, you might be opening a can of worms...?

Well, that's pretty much all I can write about on that one! I did see this post yesterday but I really didn't have the energy, so I'm sorry for not replying sooner.

My personal feeling is that you probably won't get anywhere without getting further valuations and, if you decide to go to arbitration, having somebody good at negotiating settlements with you! You do have to consider if, for the sake of £1699.25, is it really worth it? It is a fair amount of money to lose. Personally I'd stick with the original £5,000... but then I don't make jewellery lol.. what a great job though!! Certainly beats sitting at a desk pushing pens all day! (That's not an admittance of guilt there, I work hard... honest! <whistles> lol ;o))

Good luck!!

Vicissitude

Please, there's no need to apologise for taking a little time to write such a detailed reply. Many thanks for dealing with my question so thoroughly.

I'm afraid that the police have told me that there's little hope of catching anyone for the burglary. A neighbour did see two youths climbing over our garden wall, but she was unable to identify anyone from police photographs. Apparently it was a busy day for the police in our neighbourhood, which is why they took 40 minutes to respond to the telephone call from another neighbour!

You're quite right in saying that it's difficult to work out the real value of a piece of jewellery, especially items which aren't current or were made specially, as was the case with the stolen jewellery. I know from my hobby (unfortunately it's not the way I earn a crust!) that the cost of the raw materials can be very low in relation to the value of the finished article.

Arbitration sounds like a great deal of hard work for an outcome which isn't necessarily the one I would want, so I think I'll rule that out. I've done a little more investigating since posting my question and what I've found, together with your advice, is leading me to the conclusion that just over £3,000 is probably a fair(ish) offer; after all, I didn't buy most of the jewellery myself, so in the light of that, I'm doing quite well. The original valuation took me back quite a bit; if the insurance company had valued the jewellery originally at round about £3,000 I probably would have been satisfied with that.

I suppose I should get back to work editing and maintaining a web site, a job which is very productive in stress and anxiety, unlike my hobby. Bashing the hell out of a piece of silver with a mallet is extraordinarily therapeutic: I think a lot more people should try it!

Many thanks

Susan

I sincerely hope that the difficulties you have experienced encourages people to ensure that there valuable articles are valued on a regular basis. If people obtain valuations every 3-5 years it takes away a lot of the worry. Also it should highlight the need to insure your property with a high qualiy insurer. People all too often focus on price alone. I would encourage people reading this to check out a 'High Net Worth' insurance policy. Many of these types of policy are open to people with a contents sum insured in excess of £50,000 (not a lot when you total up all of your possessions).

It's certainly encouraged me to dispose of things which I no longer use, instead of just letting them hang around cluttering the place up. Also I'm going to photograph all the individual items which have some value and compile a database, including the photographs and valuations where I have them. Then if we get burgled again (which I hope we won't after all the extra security precautions we've put in place) at least I won't have to depend on my increasingly unreliable memory to supply details to the insurance company!