Vouchers instead of cash hand-outs are a favourite way for home insurance companies to settle claims.
But vouchers can lead to problems for householders who cannot easily replace the stolen property.
Any custom-made or unique item falls in to this category – like art, antiques and jewellery.
The usual way for an insurer to settle the claim is to offer vouchers for a high street store as a replacement.
For example, if someone steals a laptop, it’s easy to value the item and issue a voucher as a cash replacement.
The policyholder can take the voucher to the store and pick up a new laptop and the job’s done.
Insurers like vouchers because they can buy wads in at a discount because of the huge numbers of customers they send on to the retailer.
Policy holders with items that they can’t pick up in the high street, like a valuable ring inherited from a great-grandmother, for instance, should not accept the vouchers.
The problem is the valuation will drop because the insurer will deduct the cash discount received from the retailer. The Insurance Blogger advises refusing this offer and holding out for more.
The aim of insurance is for any pay out to put the policyholder back in the position they were before a claim.
If the possession is old and a close replacement is unavailable, then the insurer should pay the full price without any deduction.
If the original supplier or insurer’s supplier cannot match the possession exactly, then they should pay the full cost of having an identical item made.
The best way to make sure the claim settlement is fair is to have a recent professional valuation to hand for the item.
An insurer is unlikey to argue with a ring or necklace valuation from a suitably qualified jeweller.