Gold Price
23/08/2011 Gold Price at all time high - what effect on your insurance
Gold Price at all time high - what effect on your insurance – controlling the cost of your insurance
Since gold has soared again in value Policyholders have to be mindful to check their sums insured.
Currently the task of keeping insured values up to date with these record prices is a very difficult. One might say that we are all placed “between and a rock and a hard place”.
The basis of valuation applied to most of GJIS policyholders is replacement cost price at the time of loss. This means that your stock and goods in trust sum insured should reflect today’s price plus labour and fashioning charges.
Higher sums insured will mean increased premiums and most Policyholders wish to avoid any kind of increase in their overhead. Therefore you may wish to change the basis of valuation. There are various options
- Replacement cost price at time of loss – given the current market this will mean an increasing your sums insured – unless you sell off and de-stock
- Original Cost Price – plus an agreed additional percentage which will enable you to gear your sum insured to the premium you can afford to pay.
- An agreed valuation based upon cost per gram of gold which will enable you to gear your sum insured to the premium you can afford to pay.
The important thing to remember is that whatever basis of valuation you use to value your stock you must calculate your sums insured on the same basis.
Not surprisingly we have experienced a number of extreme examples of underinsurance in recent times and this can cause a problem and disappointment when it comes to making a claim.
If there is a material change in the values at risk you must discuss this with your insurers/GJIS in order that we can re-evaluate the exposures in risk and advise you regarding your sums insured and levels of security you have in place to protect the insured interest.
Due to the nature of a Jewellers' Policy you have the option to insure full value or a selected sum insured…. providing you have advised your insurer of the full facts, meaning the full values at risk based upon your chosen basis of valuation.
The main areas of value at risk and to check are:
- Your premises and including the values you display in the windows or that is left out of safe when you are closed.
- Sales Representative stock or sample ranges
- Exhibitions
- Entrustments to others, e.g. Approbation and Outworkers
- Parcel limits in respect of Sendings by post or carriers
We are all mindful of the higher values at risk, however many do not realise just how much the value of gold has changed over the years.
