Chubb’s Tannie Ng explains how to protect your luxury watches
Tannie Ng is the vice president of art, jewelry and valuable-collections management at Chubb, the largest insurer of high-net-worth families. A collector herself, she has a deep understanding of current issues and trends for valuables and knows how insurance coverage can help keep those tangible assets safe.
There has been a rash of recent watch thefts in the U.S. Why now?
We’ve been following this trend closely and noticed the uptick in watch thefts in the last few years. It seems to be a combination of factors: a growing awareness by the general public of watch brands and their value; the fact that watches are small, portable objects; and an active and increasing secondary market due to rising customer demand. In the past, only watch collectors and enthusiasts could easily identify a Rolex, a Patek Philippe, an Audemars Piguet or a Richard Mille. But with social media and influencers providing information in real time, watches can now be more easily identified by nearly anyone.
We had a client with a limited-edition, six-figure Richard Mille that he’d worn for decades. It was stolen right off his wrist in Miami. Chubb paid the insured value on the valuable-articles coverage policy as a cash settlement with no obligation to replace the watch. With the increased risk of theft, it’s important that collectors take measures to protect their watches. And that includes getting the right insurance coverage.
How can ultra-high-net-worth watch collectors protect themselves from theft?
First, jewelry and watch collectors should buy separate insurance coverage — a valuable-articles policy — that provides all-risk, worldwide coverage for theft and mysterious disappearance, preferably with no deductible. A homeowners policy is typically not enough to protect a high-value watch and jewelry collection from loss or damage because many of those policies have limited coverage and low special limits of $1,000 to $5,000 for these items. That leaves collectors with high-value watch and jewelry collections exposed with little or no coverage in the event of a loss.
Second, collectors should review how their jewelry and watch collections are protected at home. It’s important to have multiple layers of protection around a high-value collection, including a comprehensive monitored home alarm system and a high-security safe. The home alarm system should include motion sensors throughout the house and contacts and glass-break sensors on perimeter doors and windows, including second-story openings. We’ve seen entry points like these easily scaled and targeted in home burglaries. Also, not all safes are created equal, and ultra-high-net-worth collectors should store their valuables in a bolted, high security safe that weighs over 750 pounds and has a security rating equivalent to a TRTL-30x6. That rating means that it will take at least 30 minutes, with a professional torch and tools, to break into the safe on all six sides.
Third, watch collectors should consider which timepiece they wear when out in public, especially when traveling. Instead of wearing your most expensive or hyped watch, choose one that will be less noticed and might fly under the radar. If packing valuables for travel, ensure they are stored in nondescript boxes and in a carry-on bag that is kept with you and within sight at all times. Never pack watches and valuables in checked luggage even if you’re flying by private plane, as we’ve seen examples where items have gone missing following travel. If staying at a hotel, call ahead to make arrangements to store valuable watches and jewelry in the hotel’s main vault. Avoid using the in-room hotel safe, as it does not offer adequate protection.
How does luxury watch coverage work?
It’s important to speak to your insurance agent or broker to see what options are available to ensure comprehensive coverage for luxury watches. At Chubb, we understand the value of having options in the event of a loss, so you have the flexibility to replace the watch you’ve lost or purchase something else altogether. With our valuable-articles agreed-value feature for scheduled items, we will provide 100% of the agreed value as a cash settlement, and you can decide how you want to spend the money. We also offer market protection up to 150% — which means that if, at time of loss, the market value of a watch exceeds the amount it's insured for on the policy, we’ll pay up to 150% of the amount, itemized on your policy, up to the total itemized amount of coverage for your watches.
Having said this, the watch market is very dynamic, and collectors should review values for their very collectible pieces at least annually and work with a watch appraiser on items valued at $100,000 or more. With certain models selling for multiple times their retail price, even when newly purchased, collectors will want to insure these pieces at their current secondary-market value so they can be made whole again in the event of a covered loss.
In addition to watches, what trends are you seeing in the luxury jewelry market?
Signed pieces by luxury jewelry houses like Cartier, Tiffany & Co., Harry Winston or a contemporary master like JAR and Viren Bhagat are sought after by collectors and are selling at a premium at auction. These pieces tend to hold greater value over time when compared to a comparable jewelry piece that is unsigned. Provenance — including previous ownership by royalty, important historical figures or celebrities — can have a significant impact on the value of a jewelry item and multiply its value beyond its physical worth. As an example, back in June, Sotheby’s sold all 11 jewels from the collection of Constance Prosser Mellon and Constance Barber Mellon, achieving a total of $6.9 million. It’s not surprising that the top piece was a Cartier diamond ring centered with an emerald-cut, 33.51-carat sapphire of Burmese origin that sold for $3.2 million, well above its $2.5 million high estimate.
To help make traveling more carefree and protect their most expensive pieces, we also see collectors investing in “travel jewelry,” where they work with their jeweler to create replicas of their valuable items. Some collectors feel more comfortable wearing these stand-ins not just for travel but, in certain cases, in their everyday life.
How should collectors be thinking about protecting larger jewelry collections as well?
While many collectors think about protecting their most valuable watch and jewelry pieces, they may forget some of the lower-value items. To help ensure all items in the collection are adequately protected, we offer collectors the option to buy scheduled and blanket coverage. To determine the right amount of blanket coverage, collectors should inventory their jewelry and watches and ensure updates are accounted for annually. While most collectors prefer to protect their watch and jewelry collections with scheduled coverage — as the items are all scheduled, and they do not have to produce a list at the time of a loss — blanket coverage is a helpful solution when there’s a larger number of lower-value items.