Property & Casualty Insurance/Pay replacement vs replace jewelry
Rabbijo wrote at 2012-12-05 22:59:13
Very sorry to hear about your grandmothers loss. After 15 years in the actual Insurance Replacement business, and several more years as an insurance adjuster handling Lloyd's of London claims I can assure you there is little recourse here.
Jim gave an excellent description of the process, and he is right, an insurance agreement is a legally binding contract where the insured (your grandmother), and the insurance company obligate themselves to the exact language in the contract. Ultimately she is responsible to choose the best coverage for her possessions. Sadly sometimes the selling insurance agent does not ask enough questions and you end up here when there is a loss.
Many people get hung up on the "I've paid premiums for years..." My suggestion is let that idea go, you won't win that one.
When I worked for a major jewelry chain who specialized in this business, typically we would recommend one of several options: 1)There is no way to replace the sentiment attached to the items, so people would choose something completely different and begin a new 'relationship' with that item. 2)Accept the money. Hold onto it, and at her age, perhaps offer to help a grandchild with their hat engagement purchase - turn the bad experience into a positive one. 3)If she needs the money (and it sounds like that may be the case), you can hire an "Independent Agent" who will act in your interest. They are not attorneys, but in some cases they can recover more $ for you, but be advised, they charge a fee, so in the end you may not actually get much more.
One note - I have seen situations where the insured can recover some of the loss by listing the difference on their taxes. They can claim a "loss" of the difference in value between the insurance payment and the original value. I've seen it both succeed and fail. A Lloyd's claim we handled for over $600,000 paid less than $400,000, and the insured was able to declare the difference as a loss on their taxes, but that is not always the case. Check with your tax professional before you try that one.
One last thing - many completely legitimate jewelers work directly with insurance companies, and because they handle many claims, they offer the insurance company a really good discount. In most cases, those jewelers will allow your grandmother to purchase something in their store at the insurance company's discount pricing. That would allow her to get something which appraises at the actual value equal to her original item, but she would not pay full price.
I hope that helps.