CLEVELAND - Insurance policies are supposed to protect us in the event of a loss, but consumers are finding they can't recoup the true value of their jewelry when it's lost or stolen.
If you lose a valuable piece of jewelry, you won't get a similar model ring unless your paperwork is up to date. Jewelry claims don't work like most car insurance claims where you typically get a check to cover the replacement of a similar make and model car if your vehicle is totaled.
I hadn't thought about it until it happened to a friend of ours," said a consumer named Janelle.
Consumers unable to replace lost or stolen jewelry
Tales of loss and theft are common in the jewelry business, but there's a new layer of heartbreak that consumers are learning the hard way.
"We know someone who lost her ring and when she went to get a new ring, she had to pay a considerable amount of money because the value of gold had gone up," Janelle said.
"I think it's very common that people are underinsured," said Sharon Riley, Certified Gemologist Appraiser with Gasser Fine Jewelers .
As a certified gemologist with the American Gem Society , Riley works with customers and insurance companies on replacing jewelry.
She said insurance companies pay the amount on your appraisal even if it doesn't cover replacement at today's costs. For example, say your appraisal from a few years ago says $300 and you lost that piece of jewelry.
"If the customer is not insured high enough and the piece is worth $900, he is only going to get $300," Riley said.
It's easy to be under-insured today because the price of gold is up considerably. In the last 10 years, the spot price of gold is up $1,600. This week, it's closing at more than $1,700. The spike in prices means you can make money and lose money. Most people are focusing on making money by selling their gold. It isn't until the worst case scenario happens that consumers are realizing they can lose money.
"Insurance companies suggest you get your appraisal updated every two to three years," Riley said.
Updating them every few years is important because you want an accurate value. You don't want an appraisal that's too high, because you'll pay a higher insurance premium than you have to.
Once you get that appraisal, talk to your insurance agent. Under most policies, you need to schedule expensive jewelry. It's not automatically covered under your homeowners policy. Your agent can help you with specifics and pricing.
Finding a trained appraiser
Gold jewelry is not the only item rising in value.
"One carat diamonds have really gone up a lot," Riley said. Riley knows what's hot in the industry because she takes a test every year to maintain her status as a certified gemologist with the American Gem Society.
When choosing an appraiser, ask about their credentials. What tests have they taken? Do they belong to any trade groups?
"I find insurance appraisals are not very complete they are not detailed enough," Riley said.
Riley measures, weighs, inspects, grades, photographs and cleans all jewelry and gemstones she appraises. Her cost -- $125 for one or two rings. But, prices vary.
"We did not have to pay for the appraisal," Janelle said.
If you have a good relationship with your jeweler or your jewelry is not that old, you may not pay anything. It doesn't hurt to ask because it can really pay off.
"Both rings together, my ring and my husband's ring, went up about 20 percent altogether," Janelle said. That's after just three and a half years. It's a surprise the couple wasn't expecting.