Adjusters don't spend too many sleepless nights wrestling with how much a popular television set costs or what the replacement value for an MP3 players might be, but specialty claims items are another story altogether. If you don't look hard enough or in the right places, you could end up overpaying a claim by a significant amount. A limited edition sculpture by Lalique, a world-renowned crystal sculpture and glassware designer, provided such a challenge to our intrepid adjuster in this installment of Contents Claims Solved.
The Lalique piece in question -- a crystal figurine sculpture of two kneeling angels -- had a small chip. The insured claimed the item as a total loss and presented a letter from a Lalique manager stating that the retail replacement price of the piece was $70,000.
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With a replacement cost policy in force, the adjuster could have left it at that and paid full retail price, but instead decided that such a valuable and unique item warranted a deeper investigation for both claim and salvage purposes. The adjuster worked with a specialist contents claims firm to help determine whether or not the sculpture could be repaired instead of paying the full replacement cost.
Case Background
Contents claim specialists contacted the Lalique manufacturer and confirmed that the glass sculpture was indeed a limited edition piece -- one of 99 such figurines produced in 2000 that had in fact a retail price of $70,000.
This limited edition sculpture had long been sold out and was no longer available from Lalique. The initial confirmation from the contents specialists had the adjuster anticipating paying his insured $70,000. The adjuster agreed to wait just a little longer to allow the specialists to complete their research.
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The contents specialists determined that repairing the figurine would restore its appearance but significantly reduce its value. A high-quality, invisible repair would cost less than $300, but since the fair market value of modern Lalique pieces is substantially lower than the retail price, the repaired figurine's value would be reduced to only $6,000-$8,000. The result would be a $63,000 diminution of value from retail replacement, plus the cost of repair.
Replacement now seemed to be the only viable option. However, by investigating upcoming auctions and insider Lalique sources, the contents specialist was able to track down the same limited edition figurine that had gone unsold, brand new and in its original Lalique packaging. The dealer would sell it for $43,000 -- significantly less than the manufacturer's retail price of $70,000 or the repair plus diminution at an estimated $63,300.
Armed with knowledge from their contents claim specialists, the carrier saved many thousands of dollars in the replacement process, which they would have lost if they had stopped their investigation upon receiving the letter from a Lalique manager. Additionally, they now had a favorable salvage opportunity to boot.
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