Luxury watches – hard to trace, easy to sell, and sky-rocketing in value.
It should come as no surprise then that watch crime in London is more prevalent than ever. London police reported 621 watch robberies in the first seven months of 2022 alone, with almost one third occurring in the West End, Belgravia, and Chelsea.
For those fortunate enough to own these luxury items, watch criminals are a serious concern. Private client insurers at Hiscox estimated last year that luxury watches now hold a similar status to rare classic cars and supercars for insurance purposes due to the exorbitant premiums they command when sold on the second-hand market.
The investment value of luxury watches has been accelerated in recent years by the rise of e-commerce and the pandemic, both of which have encouraged more seamless online purchases and trading of higher-value items such as Rolex watches, often for investment purposes.
Readers of this article may in particular be familiar with the ‘grey market’ for luxury watches, in particular Rolex watches, which involves the resale of such watches outside of the usual boutique-customer sales channel, often at highly-inflated prices, giving customers access to watches for which there otherwise might be long waiting lists.
All of this raises a crucial question for watch-owners: should an investment-grade watch get lost, stolen, or damaged, how can they ensure that they receive its current market value rather than its retail value when indemnified by insurers?
Watch-owners have the following options when selecting insurance for their timepieces:
- Home/Contents Insurance
This may cover theft and/or damage to the watch in the home itself, yet might offer little other benefit to the policyholder where the watch is of a particularly high value or part of a collection.
Policyholders could, of course, list their watch as a specified item to ensure that its proper value is covered. However, in doing so, the insured must also consider any increase in the watch’s market value during the policy period and what it might cost above normal market value to source a replacement immediately.
- Specialist Watch Insurance
Watch-owners will consider this to be far more preferable to contents insurance for a plethora of reasons. Most importantly, a specialist, tailored policy should cover the total replacement value of the watch to reflect its current standing in the market, irrespective of the circumstances in which the policyholder is deprived of it. This is enhanced by the fact that worldwide cover is also usually included.
Procuring specialist insurance for your watch also carries intangible benefits. Primarily, a policyholder will be granted access to insurance professionals who fully understand the specific intricacies of the luxury watch market, which is an invaluable aid to policyholders looking to procure tailored cover and have claims processed efficiently.
The policyholder should ensure that any specialist watch insurance includes an ‘extended replacement cover’ clause to ensure they are indemnified for the watch’s current market value. The policyholder should also obtain regular valuations, especially if the value of the particular watch is likely to be subject to significant fluctuations.
In the event of a claim, it is important to have all of the relevant documentation in place and ensure that any policy conditions have been complied with. It is best practice to:
- keep all receipts, service documentation, and the manufacturer’s warranty to ensure that you can prove to insurers that you are the rightful owner of the watch in the event you have to make a claim;
- avoid wearing your watch(es) in dangerous areas, or areas generally notorious for watch crime; and
- use the Watch Register, the largest international database of lost and stolen watches used by police forces, insurers, and theft victims, to have the best chance of recovering your watch should it be stolen.
At Edwin Coe we have specialist insurance solicitors who are able to assist in any claims arising from damage to or loss of luxury watches and any policy coverage issues which might arise. If your policy has not been arranged correctly, there might also be a claim for professional negligence against your insurance broker.
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Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.
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