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Last week in Los Angeles news spread fast that hip hop superstar PNB was robbed and tragically murdered for a diamond necklace and watch he flaunted on Instagram. In March of this year, a customer at Il Pastaio in Beverly Hills was robbed of his $500k Richard Mille watch while dining with friends. Newsworthy stories like these seem to be popping up more and more in Los Angeles. Thieves that target high-end jewelry know exactly what they are looking for and are not shy about going after it, even in broad daylight.
While nobody is likely to grab my G-Shock digital watch while I dine at IHOP, this did get me wondering whether these jewelry collectors and entertainers have their jewelry insured. (yes, every thought in my mind is about insurance – don’t judge me!). Generally, most of my clients with lots of jewelry will insure it. Even if you don’t wear jewelry while out eating on a patio somewhere, jewelry is easy to lose. I honestly cannot count how many vacuum cleaner bags I’ve seen people go through looking for that diamond that fell out of their ring or necklace.
Because jewelry is easy to lose, it’s also expensive to insure. Insuring most jewelry will likely cost around 1.8% to 3% of the value annually. It may not seem like it, but that’s a pretty big difference in rate. That means one person with a $10,000 Rolex will pay $180 a year while another person with the same Rolex pays $300. So…who pays more to insure jewelry and who pays less?
First, who pays less? Not too many surprises here. If you put your jewelry in a bank vault you’ll pay a lot less. The challenge is that you’ll need to call your insurance person every time you take pieces out of the vault and if you have a needy insurance person like me – I will ask to be invited wherever you are going.
Secondly, if you have no recent insurance claims then insurance companies like you. No surprise there. Of course, if you are having a burglar alarm, living in a gated community, etc. all help. One additional piece though is occupation, someone who is a CPA or architect is going to pay less than some um….riskier occupations.
So, not part of that first group above? You might pay more. Certainly, if you have a history of insurance claims you will have trouble getting coverage. Insurance companies don’t care if you are careless or just have bad luck, they don’t want any part of it. No appraisal? You’ll also pay more and that’s if any carrier will insure you without one. An appraisal gives proof the item exists and someone who doesn’t want to shell out money for an appraisal says they might not care about the item as much as they say.
Lastly, is the factor of occupation. New money is bad. Anyone who made their money fast is generally a claim waiting to happen. The job type is also crucial. Sports stars and young entertainers don’t have a great reputation for being responsible for expensive things. Most carriers want someone 5 years into pro sports before they are insurable for a lot of things. Lastly, insurance writers read tabloids a lot. I think insurance underwriters keep most of the supermarket newspapers at the checkout stand in business. If an underwriter sees you in the tabloids it’s a hard no. Being in a tabloid generally equals bad life choices which might include wearing a $500k watch to a spaghetti lunch.
So there you have it, some people pay more for jewelry insurance! I would imagine the injustice of a wealthy baseball player paying more to insure his Patel Phillippe will bother you greatly. Just one more reason you made a good decision to give up your career as a rapper to do real estate.
