This normal for the US insurance industry. Most insurance companies have
arrangements with suppliers of all kinds of items. In return for all or a
large percentage of the insurance companies replacement business the
suppliers are required to give the insurance companies a very good price.
If you where an insurance company you’d do the same thing.
Even with this way of doing business, the insured is still entitled to th
e same size & quality of stone as the damaged one was before the damage
occured. The insurance company will probably require the insured to give
them the damaged stone. None of this precludes the insured from having
their own jeweler inspect the replacement stone. This stiuation points out
the value of having an appraisal done on valuable items.
Typically, most homeowners policies will only pay up to $1,000.00 on an
unlisted jewelry items. If you want a more expensive item covered, it
generally must be added to the policy on a rider, for which an addition
premium is charged. Appraisals are generally required for jewelry riders.
Very few people think to check their policies about the technicalities of
how a claim will be handled when the policy is purchased.