(Photo courtesy of: https://www.aarp.org/money/budgeting-saving/info-2020/insurance-policies-during-coronavirus-faq.html)
You’ve just acquired a grail watch. It may be extremely valuable to you in terms of the dollar amount or it could have a significant sentimental value. If that is the case, you may want to check what your current insurance policies include or exclude, and if you do not have any insurance you might begin looking for options. The solution for you may be different from others, but it is important to find the right coverage that gives you the ability to sleep well and not constantly worry that you might not ever be able to replace your piece or pieces. So here are some questions you should look to ask or answer in your search for an insurance policy, or even determining if you need one at all.
Is the policy a “Replacement Policy” or does it have a “Cash Out” Provision?
Make sure that you understand the differences between a repair or replacement and a reimbursement. Many traditional insurance policies will simply cut a check for the cost of repair or replacement of your lost, stolen, or damage watch. Make sure that the policy specifically covers all repairs or replacement of your original piece because many insurance policies do not cover jewellery or watches. In the case that your existing home insurance does not cover watches, you will want to look for a specialized jewerllery insurance company that allows coverage of watches and jewellery.
Does the insurance policy pay for “Like Kind” or “Same Kind”
You will want to be certain that a new policy appraisal states that it is a new or used watch, and that it should cover the full amount, including taxes. You should also ensure that the appraisal includes the serial number of all watches being insured. A good habit is also to keep pictures of your watch, the serial number and the original receipts.
Know how the policy will pay out if you purchased a pre-owned watch
When shopping for your new policy, you will want to know if you are entitled to a new watch, or a new pre-owned watch. And, does this policy pay for “Like Kind” or “Same Kind”. If you chose a policy that includes the cost of replacement,, then you will get the amount required to replace the timepiece(s) that were insured. However, if the coverage is based on the actual cash value instead, which could factor in depreciation, you could end up paying out of pocket to replace the watch.
What if your watch has been discontinued?
If you’re debating between multiple insurance coverage options make sure to find out their policy in regards to discontinued models. Ideally, you will want an insurer who can compensate you for the true market value of a discontinued watch.
Know the differences between Damage and Mechanical Failure
Most coverage will not include general maintenance or wear and tear. Of course, some accidents can occur, so you will want to be sure that your policy provides comprehensive coverage.
How can I reduce the premium or deductible?
Most insurance policies will either force high deductible and a low premium, or a higher premium with a lower deductible. Obviously, this choice is up to your lifestyle, budget, and risk tolerances, but there are things you can do to reduce them. You should inquire about whether you qualify for discounts by having a home alarm system, or storing watches in a safe.
If the value of my watches increases, am I still covered?
If you have a sought after watch, or discontinued model that has increased in value or trades over retail or what you had paid, you need to check your policy to find out whether or not that policy will cover the increased value. Generally, policies like this will also have higher premiums year after year.
Am I covered worldwide?
Watch enthusiasts and collectors generally love to travel and take their watches with them sso having a policy that insures your timepieces while out of the country is important. Make sure to do your due diligence so that you have peace of mind when travelling.
Loss, theft, or damage, what’s covered?
Many policies will only cover theft as a default. If you’re looking to be covered from loss or damage, be sure that you read the fine print and find a policy that will cover you for loss, theft, and damage.