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The Value, and Risk, in Your Jewelry Box

In a white paper published by ACE, Roger Ponn, a Chicago-based appraiser with more than 40 years in the business, spoke to the example of a long-time client's jewelry collection he recently reappraised. In 2004, the collection was valued at $384,000. Six years later, its value had risen to $682,000.

Ponn cites another example, that of a high-net-worth family in Wyoming who saw their jewelry collection of more than 400 pieces increase in value by 45% over two years. The high quality of the jewelry made the value rise more than it would have for most collections.

"Quite a few of their handmade pieces were 22- and 24-karat gold, with 24-karat, of course, being pure gold," he says. "Higher karat content means faster price appreciation, when precious metal prices rise. This is similar to what occurs with gold bullion and gold coins, which appreciate more rapidly than most gold jewelry, simply because they are made of pure gold."

Courtemanche cites Asset Archives, a global appraisal firm based in Atlanta that works with his firm, in estimating that clients who do not actively manage their treasures can be underinsured by up to 40% to 60%.

Don't assume your home policy or renter insurance has you fully covered. Most homeowner policies limit the amount the insurance company will pay for jewelry, money (including gold coins), silverware and other collectible items.

A typical policy will have a $1,500 limit on jewelry and a $200 limit for gold coins and other forms of money. More expensive policies may have higher limits, such as $10,000 for jewelry, but the affluent consumers willing to pay for high-end coverage are likely to have collections that exceed that. If they already have valuables coverage, they should ensure that the coverage amounts reflect the cost of replacement at today's prices.

Beyond making sure your valuables are properly insured, it is important to inventory and assess the value of your collection at least once a year, Courtemanche says. Take photos and videos of every piece of jewelry or heirloom that may be made of a precious metal and keep multiple copies in separate locations, such as a safe deposit box.
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