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The Life of a Collector Watch Insurance 101

You just purchased your favorite watch…now what? Not only do you need to know how to use it and how to care for it, but you also need to know how to protect your watch investment in case anything unfortunate happens to it. Many people think that they can simply add their watch collection to their current homeowners or renters policy but read on for some important information to consider before going that route.

Top 10 Questions to Ask…and What Answers to Look For

1. Is the policy a “Replacement Policy” or does it have a “Cash Out” Provision?

Do you know the difference between Repair or Replacement vs. Reimbursement? Many traditional insurance policies simply reimburse you for the cost to repair or replace your lost or damaged watch. However, make sure that your insurance carrier covers the actual repair or replacement of your original piece because many policies not specifically designed to cover jewelry or watches have a reimbursement limit.

Most homeowners insurance with a repair or replacement jewelry policy dictate which repair service or designated jeweler you must work with in order to settle your claim. You may want to consider a specialized jewelry insurance company that allows you the flexibility and the comfort of working with your jeweler of choice.

2. Does the Policy Pay for “Like Kind” or “Same Kind”?

If you purchase a new watch, be sure the appraisal states it is a “New Watch” and for the “Full MSRP PLUS Tax”

Be sure all information is stated on the appraisal including the Serial Number. Photos of your watch will also help in the event a claim needs to be filed.

3.  How will your insurance company pay if you purchased a Pre-Owned watch?

Are you entitled to a new watch or a new pre-owned watch?  Does your policy pay for “Like Kind” or “Same Kind” ?
Depending on which type of insurance policy you have, if your policy includes replacement cost coverage, you will get the amount required to replace what you insured at the time you insured it. Conversely, if your coverage is based on “actual cash value” instead, this factors in depreciation and could leave you paying additional out-of-pocket expenses after a claim — something to watch out for.

4. What happens if your watch is a Discontinued model?  How will your claim be settled?

Make sure that you know what your insurance company’s policy is in regards to insuring a discontinued model. You will want to find an insurer who is open and honest about applying a realistic replacement for your discontinued model, and who will apply a suitable value.

5. Be sure that you understand the difference between Damage and Mechanical Failure.

General maintenance and “Wear & Tear” are typically not covered by insurance. Accidents happen. Look for a policy that provides comprehensive coverage.

6.  Are there deductible options available to reduce my premium?

With many insurance companies, your deductible is either chosen for you, or you have two options, one high or one low. The higher deductible you choose to pay, the lower your premium will be. Look for an insurance provider who gives you options that work for your budget. To choose a deductible, think about how much money you can afford to spend out of pocket to fix or replace the watch if something happens to it.

7.  If I have a Central Station Burglar Alarm and/or a Safe in my home, are there premium discounts available?

How you keep your watch safe when you’re not wearing it is an important step toward loss prevention. Policyholders may qualify for a discount if they have an eligible alarm system. The amount of the discount depends on the type of system you have. Make sure to discuss this with your carrier.

8.  Does my policy include an automatic increase of my insured value annually?

In an economy where the value of consumer goods generally increases each year, watches are no different. Your watch will cost more to replace each year due to these increases. To ensure that you are covered, your policy may automatically increase the insured value of your watch in case of a loss.

9.  Does my policy cover my watch “Worldwide” no matter where I am?

Whether you’re traveling abroad with your current watch, or you purchase a new watch while vacationing, give yourself peace of mind that your watch is safe during your travels with coverage that includes worldwide travel protection.

10. Does my policy cover Loss, Theft or Damage, or does it simply cover “Theft”?

Bad things sometimes happen to good people and sometimes we damage or lose our valuable possessions and there’s no explanation for doing so. Make sure your policy not only covers theft or loss claims due to a disaster, such as a fire or flood, but that it ALSO covers mysterious disappearances.

Final Thoughts

When should you insure your watch or watch collection? When they are valuable to you. Value could mean the dollar amount that you spent, or it could mean sentimental value. Make sure you choose the right coverage that gives you the ability to cover replacement costs and gives you peace of mind.

Want more information to help with your decision about insurance for jewelry and watches? Download a free ebook: The Essential Buyers Guide to Jewelry Insurance from Jewelers Mutual Insurance Company.

Jewelers Mutual is a carrier we trust and a jewelry insurance option to consider as you look for ways to protect your items. Jewelers are not licensed agents and cannot sell or offer advice about insurance coverage.

About Nicole Daddario
Positive, outgoing and energetic Marketing Director for iW Magazine and new to the watch industry. Nicole is enthusiastically and devotedly absorbing all facets of luxury watches, and is excited for the opportunity to write articles that will engage and motivate watch enthusiasts. She appreciates the “blingier” style of watches but her appreciation for the mechanics and craftsmanship that goes into watchmaking is rapidly growing.

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