Watches have long been regarded as a collectible item, whether it’s because they have served successive family members through the generations and have sentimental value; break new ground technically; or because they come from brands such as Rolex, Audemars Piguet or Cartier, renowned for iconic models and state-of-the-art craftsmanship.
Watches have also become a popular investment item. A survey carried out by Knight Frank last year among 600 private bankers, wealth advisors, intermediaries and family offices managing the wealth of ultra-high-net-worth individuals, found that 79% of Singapore families were most likely to collect watches. This is backed up by figures from auction houses that have seen interest in watch-buying increasing among all Singaporeans.
Now this brings us to the topic of whether it makes sense to insure your timepiece. And the answer – with our co-founders being an economist and a lawyer respectively – is somewhat unhelpful “it depends”. Ok, so what does it depend on? It depends on whether, in the rare event of the loss of, or damage to your timepiece you experience personal financial distress.
At KoverNow we are fans of behavioural economics in general and nudging in particular, believing that Richard Thaler and Cass Sunstein summarize the value of insurance most practically when they advise “don’t sweat the small stuff”. This takes us back to you. If you are a billionaire, you may stop reading now as even the loss of a really expensive watch will certainly not give you sleepless nights. If you are, however, someone who exercised financial discipline (saving) towards the acquisition of your timepiece you may want to consider protecting this asset as its loss is likely to have an impact on your financial flexibility. Put differently – and very different to your security portfolio where losses are equally painful, but perpetual instruments (shares) come with plenty of time to recover their value – the loss of your watch is highly likely permanent with nil residual value and you may then want to transfer that risk to an underwriter. If the value of your watch can pay for your children’s annual schooling fees, we think its high time to get protected.
So do you go about this? Your home contents insurance won’t be of any help as valuables are either excluded entirely, or capped. In addition this would only protect your watch at home, which would restrict your full use and enjoyment of it. What you need is insurance cover that is specific to your watch and ideally “all risk” with flexible terms in case you decide to trade your watch.
The watch market has been buoyant for years driven by globally low rates and demand-supply imbalances. The recent economic deterioration is having a corrective impact on the valuations of all assets, including watches, despite the fact that watches actually do a good job in balancing inflationary pressures. Because watch prices move, KoverNow maintains a large database of over 30,000 watches so we always know the current value of your specific timepiece.
Why do we do this?
For the simple reason that we want to insure your timepiece for the correct value at all times. This avoids you wasting money for being over insured, or you not paying enough premiums which result in you being under insured and suffering a financial loss in an insured event. You can think of this as taking the right amount of a prescribed and necessary medicine to keep you healthy. Every drug comes with benefits (protection) and side effects (premium). Because you cannot escape the side effects, you want to be sure to take the optimal dose to maximise the health benefits. Taking too low a dose still gives you side effects without the best health protection, taking too high a dose increases the risk of side effects with no additional health benefits. In short, you want to get this right.
At KoverNow we therefore reset the value of your timepiece every month and recalculate the applicable premium. That way we shorten the period of you “not being on the right dose” to a month, reducing the risks of both over- and under insurance.
Which is why KoverNow’s watch insurance has been designed specifically with individual valuable items in mind. It couldn’t be easier to download the KoverNow app, and within seconds receive a valuation for a watch with a corresponding premium ready for execution. And no, our agents do not need to call you and because we already know all the information on your watch and key data on you our in-app claim process is very straight forward.
Watch insurance is not always top of mind for consumers in Singapore – and we are grateful for living in this vibrant and safe environment – but losing a watch does have the potential to inflict financial pain that can be smartly transferred, so we have made our app accessible and intuitive, allowing our you to realise a fully digital experience which reflects our busy lifestyle.