Rising gold prices could impact the worth of your valuables
With the price of gold having more than doubled in the last four years and rising 28 per cent in the last 12 months alone*, the gold jewellery that you own may currently be worth a lot more than you realise.
According to the London Bullion Market Association (LMBA), where the gold price is fixed twice each day, the current price of gold per troy ounce is £628, equating to around £20.19 per gram.
In October 2008, the LBMA said the same amount was worth £14.55 and four years earlier, it valued a gram of gold at £8.51.
With fluctuations in the gold price such as these, you might be wondering whether you should re-assess the value of your jewellery, and according to the managing director of Cash my Gold, an online business which buys unwanted gold, this would certainly be a sensible thing to do.
Managing director, Justin Prichard, said: “If an item had a high gold value content then it could be worth more today than at any time in several decades.”
This is a view also supported by the chief executive of online scrap gold buyer, Gold-Traders UK who also says people should “most definitely” be re-evaluating the worth of their jewellery.
Surprisingly then, research by Confused.com shows that those who went through the quote process for a home insurance policy in the last 12 months, registered their valuable items as being worth less than the year before.
Consumers unaware how rising gold prices affects the value of their contents
For example, during the month of August 2008, around 14.8 per cent of Confused.com’s customers searching for a home insurance quote listed their valuable items as being worth on average, £2,416.
However, in August 2009, the average worth of valuable items being listed by Confused.com’s customers dropped to £2,063.
Do a regular audit of your valuables
Head of home insurance at Confused.com, Darren Black, said it’s important to regularly take stock of your valuable belongings so you are not under-insured but so you can also make your insurance company fully aware of the valuable items in your possession, particularly in light of the recent gold rush.
He said: “The best way to value them is to always keep a record of what you paid at the time of purchase.
“You can do this by keeping your receipts, bank statements or even taking a digital photo of your item alongside the receipt and uploading it to an internet hosting site such as Flikr, so you can access it even if you lose everything. But make sure you restrict access to the public.
“For items such as jewellery, ideally you would have them appraised by the jeweller you originally bought them from. Alternatively use any one of the high street jewellers.”
He added: “It may also be worthwhile updating any insurance policies already held, and at the very least making sure the policy covers your contents fully. It may also be worth having a replacement based policy in place.”
Be aware of each insurance companies single article limit
According to Black, it is important to remember that each insurance company’s home insurance policy differs in terms of the single article limit for valuable items, so it is essential to read the small print.
For example, Zurich encourages independent valuations for any single articles you believe are worth over £2,500, and says it is in the customer’s best interest to keep abreast of current market valuations.
Axa on the other hand, advises its customers to get any expensive jewellery and gold items independently valued every three years, which it said will also help in the event a claim is made.
A spokeswoman for Axa, said: “It would be advisable for customers to have any expensive jewellery and gold items evaluated every three years.
“This doesn’t need to be submitted to us but will be useful when validating a claim and to also ensure they are not exceeding their total sum insured. Exceeding the sum insured will lead to a policy being invalid.”
Remember to add inherited items to your home insurance policy
Simon Douglas, director of AA Insurance, also warns that if you have inherited any items it is important to get them valued immediately.
He added: “Talk to your insurer about cover [and] review the security of your home. Insurers may insist on certain security measures such as for jewellery or paintings.”
“Don’t just assume that once you have moved valuable pieces into your home, that your home insurer will automatically cover them.
“Some estimates suggest that two-thirds of insured homes are in fact, under-insured so in the event of a significant or total loss, an insurer may adjust their payment downward to reflect the level of underinsurance.”
*Prices correct as of 2 October, London Bullion Market Association
