Monday, 23 April 2012

With sharp rises in Diamond values, don’t be underinsured

What has happened to diamond prices in the last few years?
Diamond prices have increased dramatically in the last couple of years and in particular in 2011. When precious material prices increase, the value of your Lucie Campbell jewellery climbs too.

If we look at the classic Lucie Campbell engagement ring in the picture (below) then its value would have increased by over 32% during 2011 and by over 55% between 2009 and the end of 2011.

Platinum six claw ring setting with diamond set shoulders with a 0.90ct FVS2 GIA Triple excellent diamond

The same ring with a 0.70ct stone of the same quality would have seen a more than 15% increase in value between the beginning and end of 2011 and a more than 40% increase in value between 2009 and the end of 2011.

What governs the price of diamond jewellery?
Jewellery values are affected by lots of highly variable factors: Exchange rates are a major factor since diamonds, like most commodities, are traded in US $. As with other commodities, there is a price list for diamonds. Jewellers are able to buy diamonds at a discount or premium against this list. Both the list price and the discount are determined by supply and demand for diamonds, in their various sizes and qualities. Changing prices and discounts greatly affect the retail price of diamond jewellery. Then also the price of gold and platinum changes continuously, which is likewise reflected in the cost of jewellery settings.

What has driven these sharp increases in diamond prices?
The biggest driver is the explosion in demand from China and India, which continues to push prices. And demand is always highest for the finest stones, of which there is always a limited supply. Nearer to home, lots of investors have turned to commodities like gold and diamonds with the uncertainty in financial markets.

Other gemstones have also increased dramatically in price: see our March 2012 article on Sapphire Values.
Platinum Diamond Briolette Treble Bow Earrings 2.75cts

Why might our insurance be inadequate?
Dramatic rises in precious materials means corresponding rises in jewellery values, but many people’s insurance cover has not kept pace. If you were unfortunate to suffer a loss you would not be able to replace your jewellery at anywhere near its purchase price.
In a BBC news article back in September 2011 Ian Davies Head of Underwriting at Churchill Insurance, reckoned 40% of those claiming for jewellery and gold losses were underinsured. That same article reiterated that it’s not sufficient to rely on the threshold set in your insurance, because an insurer would insist on the formal valuation rather than the amount the items are now worth.

What should I do?
Here’s our checklist:
1. Inform your insurer when you buy a new piece of jewellery or when the value of an item exceeds the single item limit in your insurance.
2. Make professional jewellery valuations part of your routine – You need to have regular valuations when prices are moving so rapidly. We’ll value your Lucie Campbell items for free – see below. Just drop into the shop - no appointment necessary.
3. Keep copies of your valuation documents with your bank or solicitor.
4. Keep photographs of your jewellery showing details, marks and scale.
5. Have your jewellery properly maintained so that it’s clean and the settings and clasps are secure.
6. Keep your jewellery in a safe or safety deposit.

Platinum 8 rows diamond briolette 44.54cts bracelet with pave diamond set clasp
What’s involved in a Lucie Campbell Free Valuation?
We will value Lucie Campbell pieces free of charge.
Just come into the shop with your jewellery – you don’t need to have an appointment.
When you bring in your Lucie Campbell jewellery for valuation we will first check the jewellery carefully, to make sure everything is in order, that the settings are all still perfect and that the clasps still work well. We will advise you if it needs any work or attention. Whilst you wait we will clean your jewellery.
We will prepare the valuation and it will be posted to you within a few days of your visit. It is not necessary for you to leave your jewellery with us for the valuation to be done, however you will need to bring the pieces in for us to study.

Who can I ask about jewellery values and valuation?
If you want our advice please don’t hesitate to get in touch: 0207 629 4647 or visit the shop.

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We hope you enjoyed our blog. Your comments and suggestions are welcome. Richard.