Olympic medals not worth more than their weight in gold

One of the big talking points of the 2012 London Olympics is the size and value of the medals awarded to the athletes, particularly after the notable gold medal success by South African competitors. It is estimated that at today’s commodity prices, the va

According to Natasha Maroun, Managing Director of Gem & Jewel Acceptances - a specialist insurance underwriter, writing on behalf of Compass Insurance Company Limited - while the physical value of the medals is surprisingly low, the sentimental value attached by the athletes is often significantly higher, although this is not something that can be easily insured.

 

“The value of an item does not always equate to its replacement value. “This highlights the dilemma about how to value items with high sentimental, rather than physical value and how to protect and insure them.”

“From an insurance perspective, while there is some flexibility when it comes to insuring these items, sentimentality is unfortunately not insurable, as it is subjective and therefore not quantifiable.”

“The insured person can choose to insure on a cost basis, or cost plus a reasonable percentage, or replacement value basis.It goes without saying that there are many factors like the exchange rate, the respective commodity price and so on that play a part in determining the correct insured value for a specific item.”

Maroun notes that the broker will work closely with the client to understand their business and make a recommendation on what basis to insure.

“The principles of insurance mean that you cannot insure an item for more than what it is physically worth,” says Maroun. “Insurance exists in order to make sure that, if a loss occurs, the insured is put in the same position as they were before the loss took place.This is the reason for requirements that state proper valuation of valuable items and proof thereof, prior to the loss.”

“There are always different factors one has to take into account to ensure that you have the true actual physical value.For example, a valuable coin can lose some of its value if it is no longer accompanied by the certificate and/or in its original box.”

So what should people do to safeguard their sentimentally priceless possessions?

Maroun advises, “Risk management is the key. Our successful athletes should make sure that they are safeguarding their medals with the same amount of effort and measures that they would have taken for an item that has considerable, physical, proven value.”