Insuring the heightened value of pre-owned watches


For a few years now we have been hearing about the phenomenon of pre-worn watches commanding higher prices than their equivalent replacement models and reporting our experience. Of course this only applies to certain rare and collectable models and marques.

This year we have had to respond to several claims and have seen examples of customers who have anticipated the lack of availability and inflated values and therefore, increased their insurance limits to ensure they have adequate cover in the event of a disaster. One such example is a customer that owned a Richard Mille – 11-03 Flyback Chronograph, that was originally bought in 2017 and was valued then at £135,000. We insured the watch for this amount on an index–linked basis. This year our customer has sought a professional revaluation on a second hand replacement basis and it’s now worth £400,000! This watch or its equivalent model is no longer manufactured or available to replace as new, and there is a long waiting list. So while most home insurance is a “new for old” contract, we agreed to insure the watch for its second hand value, which is better for the customer.

watch faceFor some rare and exclusive watch models, including the Patek Philippe Nautilus and Rolex Daytona models, the brand managers may require a customer to be placed on a waiting list for a new one. This can often be up to a year or sometimes longer. In some cases, the customer may even have to go on an initial waiting list, just to be placed onto the main waiting list! One of our customers put in an order for his watch 5 years ago and has been on a waiting list ever since. He paid £58,000 for the item as new and was locked into the purchase at this value. The second hand value of the model has since skyrocketed and recently been discontinued. When he finally took ownership of the watch it was valued at £175,000! That's a whopping 202% increase from order to receipt.   

There is a vibrant second hand market for high quality desirable wristwatches. Chrono24 and Watchfinder are flourishing. The waiting lists for supplying some rare watch models are more than twelve months. Customers don’t want to wait and will track down good quality pre–worn replacements and expect their insurers to indemnify them. Good condition second hand replacements can be immediately available albeit at much higher market prices than the recommended retail price of the new model.

How should you cover your prized and rare watches?

The actual value for such items can be quite subjective depending on the seller and where they are located. So we will need our customer to provide a suitable and professional valuation, ideally that is National Association of Jewellers (NAJ) accredited. We will carry out a check of specialist online retailers to determine whether the value presented is accurate. Our underwriters will then be happy to endorse the policy with a specific ‘Second-hand replacement value’ endorsement which enforces the requirement of an NAJ registered valuation so the higher amount can be met in the event of a claim. Moreover, the customer can then benefit from the Extended Replacement Cover available under our Executive Home and Plus policies that will give good protection if second hand market values are running away.

We have recently settled a claim for a Nautilus specified on our customer’s policy at £87,000 in 2021. The replacement second hand model that was immediately available cost £144,000 and we were able to contribute £130,500 (150%) towards the purchase. Our customer was delighted with this outcome.

Jamie Kemp This article was written by our HNW Technical Claims Manager, Jamie Kemp.