Re: State Farm Replacement info??? Anybody?
, 08:54 AM
Insurance policies can vary quite a bit from one to the next even within the same company so it’s hard to give a straight answer about the details of YOUR policy. This is what your agent is for. Call them up and ask questions. This is what they get paid to do. In general, State Farm offers replacement policies, which means that they are agreeing to replace the item with another of ‘like kind and quality’ in the case of a loss. This is importantly different from an agreement to pay you a certain amount of money in the case of a loss, especially when the amount is set by an unrelated and possibly unqualified 3rd party (the appraiser). They hire a staff of professional shoppers who will try to find a vendor to do the replacement based on the description that was agreed to up front when you started the policy. This will be in the body of the appraisal that you submitted. They’re pretty savvy folks and they drive a pretty hard bargain at the jewelers. If they can get it for less, and they usually can, that’s what they do.
As you point out, this is pretty typical. Is it a raw deal? That depends on what you want. ‘Stated value’ policies, which is where they ARE agreeing to pay a specified amount in the case of a loss are difficult to find and usually the premiums are more. Often quite a bit more. Around here (Denver), a stated value from Chubb usually costs roughly triple the premiums of an otherwise similar replacement type policy from State Farm.
For most people with items that are actually replaceable, the solution is fairly easy. Get a reasonable appraisal and then go for the replacement policy. Start by reading the description in the appraisal. This will become the purchase order for your replacement in the case of a loss and it should contain all of the details that you want considered for the replacement. This includes the obvious grading on the stone(s) but also weights, materials, craftsmanship, photographs, manufacturers, condition and other details that will be required to make you whole again. At least for new purchase customers, the value conclusion is usually the easiest thing to evaluate. You already know what it cost and you probably have a pretty good idea what it would have cost if you'd bought from a competitor. If the appraisal says something importantly different from the facts, make sure you know why. Appraising is a completely unregulated business and putting out a big number may make you feel good but it’s doing you no favors on your insurance. It raises your premium but it doesn’t change the replacement procedure one bit. They’re still going to shop wherever they can for the best deal on ‘like kind and quality’.
As with all insurance matters, it’s the policy that counts, not what your appraiser says, not what your jeweler says and not what some guy on the internet says. Your policy is a contract and it’s entirely possible that yours is different from mine or someone else’s. Read it, and if you don’t understand what it says, talk to your agent.