IFSO Case Study

Jewellery is commonly lost, damaged or stolen. You can help your clients by encouraging them to take simple steps now to avoid problems later. The best time to take action, and to understand insurance policies, is before anything does go wrong. 

Help educate your clients by encouraging them to: 

The following case studies about jewellery claims demonstrate that sharing lessons from complaints could help your clients avoid issues in future. 

Case Study: 00210697 (2018) 

Carol’s* house was broken into and a significant amount of her jewellery was stolen. When she made a claim, her only proof of ownership was photos of herself wearing some of the items. 

Carol engaged a local jeweller to prepare an “Estimate After Loss” to calculate the value of the jewellery stolen in the burglary based on her description of the items. This report concluded the replacement value of the jewellery was $56,887. 

The insurer also engaged a jewellery valuer to prepare a report based on Carol’s descriptions of the items, and the photographs Carol provided. The insurer’s report concluded the replacement value of the jewellery was $24,513. 

The insurer offered Carol a settlement of $24,513 for the jewellery portion of the claim. Carol requested a review. The insurer reviewed the first offer and increased the figure to $27,846. Carol wasn’t satisfied and made a complaint. 

The IFSO Scheme case manager explained that, in situations where there is very little substantive proof of ownership or value, it is largely at the insurer’s discretion how it will settle the claim. It is common for insurers to decline to pay for items for which no proof of ownership has been provided. 

Where photographic evidence has been provided, an insurer may opt to settle the claim, but for a significantly reduced amount, due to the difficulty of accurately valuing an item of jewellery from a photograph. 

In certain circumstances, such as in this case, an insurer may be willing to pay what it believes to be the most likely value of the jewellery, based solely on the insured’s description of the lost items. However, it does not have any obligation to do so, because the insured has failed to discharge the onus of proving a prima facie claim. 

The case manager believed the second settlement offer of $27,846 was a fair and reasonable settlement of the claim. 

Case Study: 00210229 (2019) 

Tim’s* contents insurance policy included cover for the market value of jewellery. Tim separately specified an engagement ring. When Tim’s partner lost the ring, he made a claim. The insurer accepted the claim and paid Tim the ring’s market value of $2,200. 

Tim made a complaint on the basis that the policy schedule specified the sum insured for the engagement ring as $3,390. 

Tim said he had been told by the underwriter that the ring would be insured for $3,390 for 10 years, and that the underwriter underlined this figure on a piece of paper for him. The underwriter disagreed. Replacement value was only available under the policy for furniture and appliances under 10 years old. 

Because there was conflicting oral evidence and no documentary evidence, the IFSO Scheme case manager was unable to uphold the complaint. 

Case Study: 00211088 (2019) 

In January 2019, Henry’s* house was broken into and a large amount of jewellery was stolen. Henry’s insurer accepted the claim and made a payment of $5,153.19 to Henry. A dispute arose as Henry believed the total “market value” of the jewellery was $3,792.85, which was higher than the insurer’s estimate. 

The insurer had relied on a jeweller’s opinion to estimate the “market value” of the jewellery. Henry provided auction listings, which he said proved some of the items were worth significantly more. 

The IFSO Scheme case manager acknowledged the subjective nature of “market value”. As there were many items, a minor increase for each item would have amounted to a significant increase in the claim settlement. Therefore, the case manager asked both parties to consider a compromise. 

Following these discussions, the insurer offered to settle the claim based on a further payment of $1,200; which amounted to an average increase of $25 per item. Henry accepted this amount. 

Case Study: 132922 (2015) 

After Paula’s* watch was stolen, she engaged a jeweller, who valued the watch based on an equivalent model and found its replacement value was $6,375. However, when Paula had set up her contents insurance policy, she didn’t have her watch valued and its estimated value was recorded as $2,900 (under the $3,000 limit for non-specified items). The insurer paid Paula the policy limit for non-specified items: $3,000 only. 

*Not real names. 


  • Check their policy: Check for limits on specific items, and exclusions. Check for obligations such as keeping jewellery in a safe place, taking “reasonable care”, reporting incidents immediately, proving ownership and loss. 
  • Specify special items of value: Complaints show us many people don’t realise that items over a specific value (e.g. $3000) must be specified on the policy schedule and, if they’re not specified, the maximum cover for individual items will apply. 
  • Keep receipts and get valuations: Many people don’t realise if they make a claim, they will need proof of purchase or ownership. Valuations should be reviewed regularly. 
  • Travel safe and wise: Your travelling clients will be grateful for the reminder to take extra care of jewellery, check their policy for specific requirements, don’t leave bags unattended in public places, and report any loss immediately. 
  • Tell the truth and provide accurate evidence: The consequences for being dishonest are far more serious than most people realise. 

Lessons from complaints to share with clients 

  • Keep receipts and get valuations. Receipts prove ownership and valuations prove the value of the loss. Insurers will ask for this evidence. 
  • Obtaining regular valuations is the only certain way of establishing replacement value. 
  • Photographs will not generally be sufficient evidence. 
  • A post-loss estimate based solely on the insured’s recollection of the items lost won’t generally be sufficient to prove value or a prima facie claim. 
  • If your client cannot provide sufficient proof, it is largely at the insurer’s discretion how, or if, it will settle the claim. 
  • As jewellery is very personal, it is often difficult to replace with like-for-like items. 
  • Policy limits for single items or all jewellery may limit the claim. 

Dec 2019

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