Sunday, January 23, 2011

The good buy earrings

Twenty years ago, a reader from Charleston, S.C., bought a pair of diamond earrings. For years, she enjoyed wearing them. But earlier this year, she lost one of the diamond earrings.

My reader might not be able to recover the sentimental value of the earring, but fortunately for her, she’s been able to recover its cost. “We’d had the earrings insured for more than 20 years,” she writes.

Her insurance company offered her a cash settlement of $5,000 for the lost earring, which was the amount for which it had been insured.

My reader had gone to a jewelry store to have a jeweler examine the remaining earring and was told that the lost earring could indeed be replaced for $5,000. That would give her an earring that would match the size, clarity, and setting of the earring that remained from the pair.

After receiving the insurance check for $5,000, my reader visited two other jewelry stores to see about trading in the remaining earring to upgrade her pair, or to replace the lost earring. A jeweler at one of the stores told her that he could replace the lost earring for one that matched the remaining one for $2,400, far below the price the earlier jeweler had cited — and far less than the amount the insurance company had given her for her loss.

“Should I repay the insurance company the $2,600 difference?” she asks.

If my reader is seeking legal advice, she’s come to the wrong place. I’m not a lawyer, nor am I a specialist in insurance matters. And I’m even less of an expert on diamond jewelry.

But what my reader seems to be asking is a question that falls squarely in the ethics arena, which is my turf. She believes that there might be something wrong with choosing to buy the replacement earring from the less-expensive source rather than go with the $5,000 priced replacement, unless she makes up the difference to her insurer.

If the policy was indeed a cash settlement that didn’t require replacement, my reader has absolutely no obligation to replace the earring at all, let alone return any cash if she can find a cheaper substitute. She could decide to spend the $5,000 on something else, or to bank the money if she doesn’t want a replacement. She’d only be obligated to pay it back if she happens to find the lost insured earring.

Even if she finds the lost earring, paying back such funds is not always as simple as it might seem. Another one of my readers reports that he has been trying without success for almost 40 years to repay his insurance company what they paid him for his wife’s diamond engagement ring after it showed up a couple of years after he reported it lost.

The right thing for my reader to do is to base her decision on whether she wants to buy a replacement earring. If she does, she is free to spend as much or as little of the insurance settlement as she deems necessary . . . and she can do so with a clear conscience.

Jeffrey L. Seglin, author of The Right Thing: Conscience, Profit and Personal Responsibility in Today’s Business,” is an associate professor at Emerson College in Boston, where he teaches writing and ethics.

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1 comment:

Anonymous said...

Only in America would we run into a situation where someone who did everything right, had the diamond insured, paid the premiums over the years, lost the ring, received a settlement and now she's worrying over whether she should pay back the insurance company. This is a no brainer. My only advice would be she should be careful and wary of a jeweler who offers a cut rate on a new diamond when she had already gotten a replacement ring from a reputable dealer. The ring owner made this into an ethical problem when there wasn't one. Apparently, in this country, the libs have now made people feel that even if you do everything right, you should still feel guilty if you end up with what appears to be a windfall.

Charlie Seng