Insurance Coverage and Discontinued Models

[wclowe]

I’d like to connect two discussions we often have on these forums and get your opinions.

In terms of insurance coverage we often lament the fact that standard coverage will not pay more than MSRP - even if it would realistically cost much more given the scarcity of some models.

Discontinued models too have been a popular topic lately in light of the upcoming Watches and Wonders event in April.

My question is this: If a model gets discontinued, and therefore can only be obtained afterward on the secondary/ pre-owned/ grey market, is it then insurable at the higher (non MSRP) price with standard insurance coverage?

Thanks for your opinions!


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[928ktgold]

Yea get it appraised and submit that to insurance

[EconTigerOrange]

Originally Posted by wclowe

I’d like to connect two discussions we often have on these forums and get your opinions.

In terms of insurance coverage we often lament the fact that standard coverage will not pay more than MSRP - even if it would realistically cost much more given the scarcity of some models.

Discontinued models too have been a popular topic lately in light of the upcoming Watches and Wonders event in April.

My question is this: If a model gets discontinued, and therefore can only be obtained afterward on the secondary/ pre-owned/ grey market, is it then insurable at the higher (non MSRP) price with standard insurance coverage?

Thanks for your opinions!


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The watch needs to be insured on an Agreed Value basis.

[tirefryer]

How often do you update the appraisal or established value of your watch?

[Sephiroth]

Originally Posted by EconTigerOrange

The watch needs to be insured on an Agreed Value basis.

+1

Doesn't matter if its discontinued. Find a top tier insurance company that does agreed value policies and read the terms carefully.

[Jack T]

Originally Posted by EconTigerOrange

The watch needs to be insured on an Agreed Value basis.

Agreed Value basis...is that the same as Replacement Cost?

Rolex AD’s are not supposed to provide appraisals on discontinued Rolex models because of the significantly inflated resale prices on the grey and secondary market. Find an reputable, independent appraiser for that.

[EconTigerOrange]

Originally Posted by Jack T

Agreed Value basis...is that the same as Replacement Cost?

Rolex AD’s are not supposed to provide appraisals on discontinued Rolex models because of the significantly inflated resale prices on the grey and secondary market. Find an reputable, independent appraiser for that.

Since we are talking about Rolexes, which have a tendency to appreciate above MSRP:
Agreed Value > Replacement Cost > Actual Cash Value


Agreed Value you and the insurer agree what the value of the property will be if there is a total loss.
Replacement Cost (RC) is the cost to replace the damaged property with new property. This shouldn’t be confused with the limit shown on the policy. Many states will allow you to overinsure your property...you just won’t collect the limit on the policy in the event of a total loss and will really just have overpaid. RC leaves open the possibility of a dispute in the value of the property between you and the insurer.
Actual Cash Value (ACV) is Replacement Cost minus depreciation. The amount of depreciation is open to debate as is the starting RC value.

The JM policy wording basically says that if you and JM can’t agree on the value, then you will duke it out via appraisals. It’s just too messy for me.

[Cigars&Watches]

Paul Thorpe has a couple videos on YouTube on the topic that might be helpful.

[EndlessEight]

Jeweler’s Mutual will insure for whatever the appraisal says.

For example my Hulk is insured for 20k....

[EconTigerOrange]

Originally Posted by EndlessEight

Jeweler’s Mutual will insure for whatever the appraisal says.

For example my Hulk is insured for 20k....

May want to check with JM to see if they will pay on Agreed Value. I checked their sample policy and it does not look like they do without an endorsement. Just because the policy says the limit is $20k doesn’t mean the insurer will pay that much unless on Agreed Value. Below is the wording from my policy.

Agreed Value Loss Settlement – Scheduled Property Only
i. We will pay the full amount shown in the Declarations for each article or item listed under the class category with the verbiage “Agreed Amount Applies”. That amount is agreed to be the value of the article or item.
At our request you will surrender the article or item to us if not lost or stolen

[bram]

Originally Posted by EconTigerOrange

May want to check with JM to see if they will pay on Agreed Value. I checked their sample policy and it does not look like they do without an endorsement. Just because the policy says the limit is $20k doesn’t mean the insurer will pay that much unless on Agreed Value. Below is the wording from my policy.

Agreed Value Loss Settlement – Scheduled Property Only
i. We will pay the full amount shown in the Declarations for each article or item listed under the class category with the verbiage “Agreed Amount Applies”. That amount is agreed to be the value of the article or item.
At our request you will surrender the article or item to us if not lost or stolen

What does this mean?


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[EconTigerOrange]

Originally Posted by bram

What does this mean?


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The limit on the policy is usually used as the rating basis and then various other factors are applied depending on the valuation selected - Actual Cash Value Replacement Cost, Agreed Value.

The policy limit does not guarantee that is the amount you will get paid in the event of a total loss, unless it’s on Agreed Value. Insurance companies love the phrases “the lesser of” or “the least of” when it comes to payment.

[MCOSUB]

Originally Posted by EndlessEight

Jeweler’s Mutual will insure for whatever the appraisal says.

For example my Hulk is insured for 20k....

You need to check that. I just talked with them today and they told me that the policy is replacement only. She said you could insure it for more but they will only replace the watch with new or similar from a jeweler that they would pay directly.

[dannyp]

Originally Posted by MCOSUB

You need to check that. I just talked with them today and they told me that the policy is replacement only. She said you could insure it for more but they will only replace the watch with new or similar from a jeweler that they would pay directly.

I don’t know that the two are in conflict. Perhaps they’d be sourcing a secondary market/pre-opened piece at customer request, up to the insured value. Otherwise, the default would be a new 126610LV from an AD of customer’s choosing.

[BillA]

I am glad this topic came up, I wondering how to get appraisals for discontinued models and then give to the insurance co.

[Bryan81]

I just switched to Hodinkee. I had been with Jewelers Mutual. Hodinkee is definitely more expensive, but they offer a lot of flexibility and cover appreciation of up to 50% before you need to revalue the watch (subject to the total collection value insured). No appraisal needed unless a piece is valued >$100k.

The higher is price for me is also due to Hodinkee only offering zero deductible while I had a deductible with JM.


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[scombs263]

JM will insure for appraised value which is great. Just know a Hulk cost say $9K from an AD and is around $20K on the grey market will cost u accordingly. Your annual fee will be based on the $20K amount. So if u have several desired SS watches which appraise for a lot more than msrp, stand by. U could be paying thousands per year to have them insured.

[Jas14]

Anyone ever turned in a claim with Hoodinkee insurance?