Like-kind and quality.
Most jewelry insurance policies are designed to make a customer whole again in the case of a loss. They’re agreeing to replace a lost or destroyed item with another of “Like-kind and quality”. What that means is that they’re agreeing to replace your piece rather than just write you a check for the declared value.
They do this because of the money. Jewelry appraisals routinely will price things for ‘insurance’ at many times what it costs for the company to actually replace it. Put bluntly, they can usually get it for less than you can. If you bought a ring for $10,000 that the seller said is worth $20,000, chances are good that your insurer can get one of like kind and quality for less than your original $10k. They’re savvy and big volume shoppers while you probably aren’t.
But that’s not the end. What makes something like-kind and quality? That’s one of the reasons they’re asking for an appraisal in the first place. It’s in the description, photos, weights, dimensions, etc. from the appraisal. The appraisal effectively becomes the purchase order for the replacement. They need to meet or exceed the specs provided or it’s not like-kind and quality. If you had a 1.06-carat diamond, for example, they need to get you a 1.06-carat or greater replacement. If it was VS1, they need a VS1 or better. Every line item works this way. If it’s not on the report, they make assumptions and they get to negotiate. That’s where a lot of trouble sneaks in and this is one of the reasons they’re asking you to provide the appraisal instead of just doing it themselves. They could, you know.
For example, if it doesn’t say who made it, they get to use anyone they want to make the replacement. Even if it DOES say, they can offer an artist of ‘like-kind and quality’. If it doesn’t say if it was fabricated or cast, they get to make it however they want. Origin of stones can be a problem. Australian opal is a very different marketplace from Ethiopian opal for example. Age can be an issue. An antique piece can be replaced with new if it’s not appraised properly. Hearts and Arrows symmetry in diamonds have been a bit shopping topic lately and if it doesn’t say, they get to pick. If it was important to you when you were shopping, it should be in the appraisal.
Choose your appraiser carefully, just like you do your jeweler. They’re not all the same and it’s not just part of the packing materials. A bad appraisal is worth less than it costs, even if it’s free because it undermines your insurance. It makes like kind and quality something that the replacement jeweler gets to decide instead of you.