Personal Inland Marine Loss

Our insured had a loss to a diamond ring scheduled on an HO-61. She found to her amazement it appeared to have cracked. She took it to two different jewelers, both of whom stated the diamond was indeed cracked. The jewelers said she could have bumped it against something, but she does not remember doing anything to cause this damage.

There are two opinions concerning damage for this. One opinion is that there is no coverage, since the diamond must have had a latent defect or it would not have cracked. The other opinion is that the coverage is “open perils” and the loss is covered, since there is no way to prove the ring had a latent defect.