Written by
Reviewed by William Cooper
The second-hand online marketplace has opened the door to exciting items and brands people wouldn’t have been able to afford before – but, when it comes to certain luxury items, there’s a catch.
Luxury watches as investments
Luxury watches work a bit differently to your average second-hand purchase, because they aren’t just accessories but legitimate investments that often appreciate over time. Luxury watches from Rolex, Patek Philippe and Audemars Piguet in particular hold their value, meaning it’s likely to be worth significantly more in the future.
The significant appreciation accrued over time by some luxury watches makes them attractive to fraudsters. Insurers are therefore cautious of individuals who purchase second-hand watches because there is the potential for financial gain through a fraudulent claim or loss.
Key challenges to insuring preloved timepieces
Authenticity
When you buy a watch from an unauthorised second-hand retailer like Vinted or eBay, it’s very difficult to verify the authenticity of the timepiece. Sellers may not provide sufficient documentation along with the item, which increases the likelihood the item may be a counterfeit. What’s more, an insurer will typically ask to see a luxury timepiece’s documentation as proof of its authenticity, including a serial number, which a second-hand purchase will often come without.
Traceability
Traceability is another hurdle when purchasing a luxury watch from a preloved site. Unlike new watches that come with a clear chain of ownership and warranty information, pre-owned watches may lack verifiable history, which in turn increases the risk for the insurer.
Previous ownership
Knowing the watch’s previous owners is crucial, especially if the piece has been bought and sold multiple times. Without this documented history, insurers may be reluctant to cover the watch because they can’t properly assess its ownership history and therefore its true value.
Why we scrutinise second-hand timepieces
At the present time, Stanhope is unable to arrange insurance for watches purchased by cash or by a private BACS transfer from one individual to another. That’s why we always recommend that preloved timepieces be purchased from authorised retailers like Watchfinder & Co or Chronos24 rather than Vinted, Gumtree or eBay.
Watches sold under Watchfinder & Co undergo provenance and vetting checks, with each item inspected and cross-referenced prior to sale by highly trained watchmakers.
Likewise, Chronos24 are able to guarantee a watch’s authenticity as each piece undergoes a rigorous inspection before receiving a certificate of authenticity.
Can I insure a watch given as a gift by my employer or won in a competition?
It depends on your individual circumstances, but, unfortunately, the answer is usually a no.
Insurers have a very thorough approach when it comes to assessing an individual’s risk, and part of that risk assessment involves being able to reasonably predict a person’s habits and behaviours towards the insured item.
An insurer can do this fairly accurately when someone has purchased the watch themselves because the individual is more likely to treat the item with care.
On the other hand, imagine that someone with no history with luxury watches won a timepiece in a competition or was gifted a watch by their employer. They may like the watch and have a surface-level appreciation of its value, but they will experience no real loss themselves if something were to happen to it, which may encourage carelessness and increase the likelihood of a claim being made. For insurers, this is a problem.
That said, we do treat situations like these on a case-by-case basis and would recommend you speak to us so we can find out if we can help.
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems, we recommend that professional advice be sought.
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