State Farm Personal articles insurance?

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jhonydeep
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State Farm Personal articles insurance?

Post by jhonydeep »

Anyone purchase this? I insured a ring for $6900 and now lost it. They said I must go to their jeweler. Do they usually find bad jewelers that sell cheap diamonds? I would hate for them to say it's worth $3000 when it was appraised for $7000.
Shagster12
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Re: State Farm Personal articles insurance?

Post by Shagster12 »

You should have gotten a quality certificate when you bought it originally. That would allow you to show the quality to be used for appraisal.
Or if you have a copy of the appraisal which you mentioned then replacing the ring with 'Like kind and quality' should not be an issue.
yoyowordup
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Re: State Farm Personal articles insurance?

Post by yoyowordup »

I never quite understood Jewelry appraisals. If you buy a ring for $5,000 you can usually get an appraisal the same day for 50-100% higher than that.

They will tell you it's worth X, but you should value it at 2X for "insurance purposes". Why?
Gunther
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Re: State Farm Personal articles insurance?

Post by Gunther »

Any scheduled item, antique car, equipment, or jewelry should always be insured on a stated value or agreed value basis and not repair/replacement coverage. Simply put, you and your insurance carrier have already agreed to the value of the item before hand and there is no question to the value of the item at claim time. Hand over any salvage and they will hand you the check.

However, the ring you bought 10 years ago for $5K may have a $10K value. Consequently, You have agreed to the $5K value and thats all your going to get. It is important to have an updated appraisal every 3-5 years and update your insurance coverage accordingly when on a stated value basis.

If 'The Farm' will not write coverage on a stated value or agreed value basis then find a carrier that will.
d's insurance store
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Re: State Farm Personal articles insurance?

Post by d's insurance store »

Technically, the insurance philosophy is that you get back the same item, less sentimental value, with the same value attributes as what you originally had.

The scam in Scheduled Property Floaters is what was mentioned prior...the ability to negotiate a retail price to buy an item that is far less than what an appraiser would list as a value, and the insurance companies aren't going to willingly hand over a check for $7000 and allow you to purchase the replacement item for $3500 and pocket the difference...and that's why in this case, State Farm wants you at their preferred jeweler for replacement.

I've always suggested to insureds that they insure for their provable purchase price and not some 'feel good' inflated appraisal. Except for brand name jewelry and watches that have established list prices for replacement, the usual pieces of jewelry are price sensitive to the market conditions and metal/stone prices, and that makes for squishy values for insurance purposes. And most clients are not inclined to spend the money for reappraisals every 3-5 years.
Shagster12
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Re: State Farm Personal articles insurance?

Post by Shagster12 »

I agree 100% with d's post.
Your value is going to be subject to current market costs, so your best bet for assuring that your replacement is of comparable quality regardless of current market pricing is the Certificate which defines exactly what the item contained as far as cut, color, clarity and carat. It also details the grade of metals used and includes a picture. This takes away all the guesswork. If you don't have the certificate then good luck to you!
Shagster
kevinraz
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Re: State Farm Personal articles insurance?

Post by kevinraz »

Jhonydeep, no one is really responding to your question. State Farm has a moderate reputation for paying claims - sometimes fine, sometimes they really drag their feet - but I've never heard anything bad about them using a substandard jewelery store.

Some advice: first, read your personal articles floater. It should not be too long. Your stuck with whatever it says because it's what you bought. Pull out your original documentation (receipt, appraisal, whatever) and have that all ready.

Second, go to the jewelry store they recommend and see what happens. Might not be that bad after all. Since it's State Farm (large, national company) they are probably set up with a large, national jewelry chain, not Mike's Pawn Shop in the seedy part of town.

Third, negotiate if you want or feel you have to. Might work, can't hurt.

Fourth, what do you really want? If it's replacing the item price should not matter much, as long as you get like kind & quality. If you bought it 5 years ago, for example, you might have paid a higher price than someone would now since the economy is down, hence less demand for jewels, hence lower prices. That's life.
If it's cash you want, well, that's another story. This might not work out too well for you, but if you had sold it you would not have received what you paid for it anyway, again probably less since demand for jewelry is down.

Good luck!
Kevin Rasmussen AU, CIC
gregcw
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Re: State Farm Personal articles insurance?

Post by gregcw »

jhonnydeep, I agree with kevinraz and I did pull out an AAIS "Scheduled Personal Property" endorsement and the loss settlement would pay the least of 1) Actual Cash Value if not replaced or 2) the amount for which the property could reasonably be expected to be repaired or replaced. 3) an amount not greater than the "insured's" interest in the property or 4) the applicable "limit
Unlike "Fine Arts" is is not the "agreed value" or limit that it is insured for. The limit shown is a rating basis not an agreed value.
Gregcw
Gunther
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Re: State Farm Personal articles insurance?

Post by Gunther »

Technically, the insurance philosophy with regards to "Agreed Value" is that you get the amount stated in the schedule as part of the declarations page.

I did pull out a couple of polices and I fail to understand how an insurance company could get away with not handing over a check for $7000 regardless if you replace the item or not.
ENCOMPASS wrote:Loss Settlement: Covered property losses are settled as follows:
  • b If the Schedule indicates that "Stated Value Applies" to an item:
    • (1) For total losses to articles, including pairs and sets we will pay the stated value of the article as shown in the Schedule
METLIFE wrote:3. Other Scheduled Property Items - Agreed Value Property As Shown in the Declarations
For items indicated by an asterisk (*) in the Declarations as "Losses settled according to the
Agreed Value provisions in your policy", covered property losses are settled as follows:
  • a. Agreed Value

    If a listed item is totally destroyed or lost, we will pay the full amount shown in the
    Declarations for that item which is agreed to be the value of that item.
HARTFORD wrote:F. Conditions
  • 1. Loss Settlement
    Covered property losses are settled as follows:
    • a. Agreed Value
      We will pay, for each article or property designated in the Schedule, the full amount
      shown in the Schedule which is agreed to be the value of the article or property.
kevinraz
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Re: State Farm Personal articles insurance?

Post by kevinraz »

Gunther - that's good info you put up from those carriers but what matters here is what his policy states. If its ISO based he's probably stuck with ACV if he wants cash.

Also, it looks like you pulled up the available forms. That's all well & good but available does not mean that it's actually sold by the carrier. My personal lines days are pretty far away now but I seem to remember that Chubb was one of the few who would actually write agreed value on scheduled stuff & actually have that stated in loss settlement provisions as well. I'm pretty sure that Hartford does not write this on a standard policy. Met might as there better policies are actually old St. Paul forms and were pretty comprehensive. I do reserve the right, however, to be wrong!
Kevin Rasmussen AU, CIC
darnovak
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Inland Marine - always read the policy

Post by darnovak »

The 'pure speculation' of some posts really grabs me. I recall many IM policies which stated in the settlement provisions "the lesser of....." If you do not have a specimen policy or access to these items, you are guessing. In some instances, the 'replacement cost' settlement option under the HO (when it is a covered peril of course)is more advantageous than having the item scheduled under an IM floater which offers the lesser of ACV, Cost to repair, or cost to replace with like kind, etc. Read the policies folks - do not guess. My agency has 9 carriers writing personal lines and they are different in more ways than you can shake a stick at not only for their IM coverages, but for a lot of other important items like 'law and ordinance', 'water backup', 'guaranteed R/C', etc. The vast majority of agents and brokers have absolutely no clue as to what they are selling (product knowledge and the practical application of coverages and settlement options). My advice is to have access to electronic or hard copy specimen policies and read them. Know what you are selling. When anyone asks me one of these 'hypothetical' questions, I reply that I must examine the entire policy in order to give an opinion. To those of you who do not have access to this information, "lotsa luck." regards,
Gunther
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Re: State Farm Personal articles insurance?

Post by Gunther »

Gunther wrote:If 'The Farm' will not write coverage on a stated value or agreed value basis then find a carrier that will.
@kevinraz- You are correct. Not every company will give you the option. However, when given the option, my advice it to take it. The cost difference is usually marginal and loss settlement is a no brainer. It is what it is.

And, there must be a reason why a company may not want to offer this settlement option. My guess is that it has something to do with controling claim costs.

@darnovak- Amen! Read the policy and I would recommend reading it before your have a loss. I do enjoy reading policies, especially stuff from the E&S market. I have read some extraordinary things in various policies over the years.
darnovak
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Gunther knows.....

Post by darnovak »

My agency experienced a nice clean 'law and ordinance' claim recently. (Clean means it was covered and paid without any problems or deductions for 'betterment' required by law or ordinance) I decided to get out the 'law and ordinance' coverage parts for our 5 major homeowners carriers and look at them side-by-side. Unbelievable! Try it sometime all you agents/producers out there. Know what you are providing to your insureds or one of these days......... Regards,
Specialrisk
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Re: State Farm Personal articles insurance?

Post by Specialrisk »

This is a problem with the State Farm policy form.
Under its form, State Farm will only replace the lost item.

Ideally, you should write this type of coverage with a carrier that provides coverage
on an "Insured for & Valued at" basis.
In this case, the Insured could either cash out for the insured valued of the item, or the carrier would replace
the item with like kind & quality.

We here at Monarch E & S Insurance offer a variety of admitted & non admitted markets for Scheduled Property
that all provide the broader form of coverage and would be happy to assist in the placement of your Personal Articles Floater policies (heleneb@monarchexcess.com).
Helene Briskin
VP - Personal Lines/Special Risk
Monarch E & S Insurance
La Crescenta, Ca.
(818)249-0100
mickeyfridia178
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Re: State Farm Personal articles insurance?

Post by mickeyfridia178 »

I use State Farm there is a deductable. It is part of the Homeowners ,it is not as expenive as you might think. They take pictures everything is documented,but from what they told me the guitars are covered everywhere. I am happy and never had to use them yet.
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