Jewellery insurance provides essential protection for valuable items, from engagement rings to antique pieces. Understanding the terminology related to jewellery insurance is crucial for ensuring comprehensive coverage and making informed decisions. This glossary offers clear, concise definitions of the most important terms in the world of jewellery insurance, assisting both new and experienced policyholders.
Abandonment
A condition that prevents an insured individual from transferring damaged property to the insurer for repair or disposal. The policyholder typically retains responsibility unless the insurer decides otherwise.
Actual Cash Value (ACV)
The value of property at the time of loss or damage, is calculated as the replacement cost minus depreciation. Jewellery often has a depreciation period of around 25 years.
Additional Insured
An individual added to the policy who receives the same coverage as the policyholder. Commonly includes a partner or fiancé who might possess the insured item.
Admitted Carrier
An insurance company licensed to provide coverage in a specific state or country, complying with local regulatory standards.
Agreed Value
A policy type for items that cannot be easily replaced, such as antique jewellery. The insurer and policyholder agree on a set value, which is typically higher in cost.
Appraisal
A professional report that assigns a monetary value to a jewellery piece. Essential details often include stone characteristics, metal type, and overall quality.
Appraisal Software
Technology that assists jewellers in creating detailed appraisal reports. These tools often pull data from precious metal and gemstone databases.
Appraised Value
The calculated value of a jewellery item for insurance purposes. This value is used to determine replacement costs in the event of loss or damage.
Binder
A temporary agreement that provides proof of coverage before the formal policy is issued.
Cancellation
The termination of an insurance policy by the insured or insurer before the policy term ends. Notice is typically required.
Claim
A formal request made by the policyholder for compensation under the terms of the insurance policy.
Claimant
The individual making a claim under an insurance policy.
Conditions
The section in an insurance policy outlines the responsibilities and duties of the insured and insurer.
Current Market Value
The current replacement cost of an item is often used when insuring high-value items like watches.
Declarations Page
The first page of an insurance policy lists essential details such as the insured items, coverage limits, and premiums.
Deductible
The amount a policyholder must pay out of pocket before insurance covers the remaining cost of a claim.
Depreciation
The decrease in value is due to wear, age, or other factors over time.
Diamond Certificate/Report
A detailed report assessing a diamond’s quality, including carat, colour, clarity, and cut. This report does not assign a monetary value.
Endorsement
An amendment to an insurance policy that modifies coverage or adds terms.
Exclusion
Specific situations or risks not covered by an insurance policy.
First Notice of Loss (FNOL)
The initial report of loss, theft, or damage is submitted to the insurance company to begin the claims process.
Fraud
Deliberate deception or misrepresentation to secure an unfair or unlawful gain from an insurance policy.
Gemological Institute of America (GIA)
A non-profit organisation that sets standards for gemstone quality, providing certifications for diamonds and other gems.
Home Safe
A secure, fireproof safe used to store valuable jewellery. Policies may require a home safe for coverage endorsement.
Indemnification
The principle is that insurance coverage should restore the insured to their financial position before the loss, without profit.
Insurable Interest
A vested interest in an item such that loss or damage would cause financial harm to the insured party.
Insured Limit
The maximum amount the insurer will pay to replace or repair a covered item, is usually set at the appraised value.
Lapse
A situation where an insurance policy becomes inactive due to non-renewal or non-payment.
Mitigation
Steps were taken to prevent further loss or damage after an incident occurs.
Named Perils
Specific risks outlined in a policy that are covered. Claims are valid only if damage results from these named perils.
Policyholder
The individual who owns the insurance policy and is entitled to coverage.
Premium
The payment is made to maintain an insurance policy, which may be paid monthly, quarterly, or annually.
Preventative Maintenance
Repair work that prevents further damage to a jewellery piece, such as stone tightening or prong re-tipping.
Proof of Loss
Documentation submitted to support a claim, detailing the date, nature of loss, and description of the items.
Quote
An estimated insurance premium is provided based on preliminary information before policy issuance.
Replacement Cost Value (RCV)
The cost to replace an item with a new one of a similar kind and quality without depreciation.
Rider
An additional policy provision that offers extended coverage for specific items or risks not included in the main policy.
Settlement
The final payment made by an insurance company to a policyholder to close a claim.
Subrogation
The process by which an insurer seeks reimbursement from a third party responsible for an insured loss after compensating the policyholder.
Underwriter
The individual or company was responsible for assessing and accepting insurance risks and determining the policy terms and premium.
Valuables
High-value items covered by insurance, such as jewellery and watches.
