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 What to Know About Jewelry Appraisals

What to Know About Jewelry Appraisals


How do I get my new diamond engagement ring appraised and insured?

Most people first decide to get their wedding jewelry appraised because they have been told by their insurance agent that an independent jewelry appraisal is a requirement before they can get a jewelry insurance policy. According to the US Department of Justice, nearly $1 billion in jewelry and precious metal was stolen in the US in 2001*; and many people would like to insure their diamond engagement ring or wedding jewelry against this risk. Most of the major US insurance carriers offer some sort of wedding jewelry coverage to address this and, in order to know their risks, and to set the premiums, the jewelry insurance companies require an independent jewelry appraisal or other documentation about the details of your wedding jewelry. A well done independent jewelry appraisal can easily address this and many other concerns associated with owning valuable wedding jewelry or diamond engagement rings. Insuring Diamond Engagement Rings

The majority of jewelers will sell you wedding jewelry or a diamond engagement ring for one price and then give you a 'free' jewelry appraisal stating a much higher price, telling the consumer that the higher value is for jewelry insurance. If the jewelry insurance policy is the replacement type, and most are, who benefits by an inflated wedding jewelry appraisal? The Jeweler who sold you the diamond engagement ring, because you are led to believe that you are paying a greatly reduced price for your wedding jewelry; and the Jewelry Insurance Company who will collect their premiums based upon the high value stated. If and when claims time comes around they will make the replacement diamond engagement ring based on the description in the jewelry appraisal and they will have their professional diamond shoppers get the replacement wedding jewelry for the best price they can find. If this is lower than the bottom line on the jewelry appraisal that the jeweler supplied, the benefit of the 'bargain' on the diamond engagement ring goes to the jewelry insurance company not you.

All jewelry insurance policies have exclusions for 'inherent vice'. This means that if the diamond falls out of your engagement ring because it was poorly set or otherwise defective, it's not going to be covered by the jewelry insurance company. A statement in the jewelry appraisal from the selling jeweler that your diamond engagement ring is in perfect condition at the time of sale does not always satisfy the jewelry insurance company because of the conflict of interest. After the claim, if the jewelry insurance company's expert can determine by looking at the damaged wedding jewelry that the loss was due to a craftsmanship problem or a defect present in the engagement ring prior to the beginning of the jewelry insurance policy, the jewelry insurance company can disallow the claim.

An accurate and detailed independent jewelry appraisal will provide you and your insurance company with the information necessary to settle a claim fairly and quickly. For insurance purposes, you will want a "replacement cost appraisal", which can differ from other types of jewelry appraisals, such as a "fair market value appraisal" and an "estate appraisal". A replacement cost appraisal is a formal opinion of a jewelry item, offered by a certified gemologist, and it should verify the authenticity, design, quality and monetary value of the item.


What is an independent jewelry appraisal?

An independent jewelry appraisal is a written statement, independently, impartially, and objectively prepared by a qualified professional independent jewelry appraiser, setting forth an opinion of the defined value of an adequately described piece of jewelry as of a specific date; supported by the presentation and analysis of relative jewelry market information. An independent jewelry appraisal generally is 3-5 pages in length. An independent jewelry appraisal is a detailed report containing the description of the jewelry, identifying characteristics, photographs of the jewelry, a diamond grading plot (internal gem diagram), statement of limitations, the Uniform Standards of Professional Appraisal Practice Certification agreement, value justifications, and list of appraisal equipment used in the analysis of the jewelry. An independent jewelry appraisal will always declare a value and an explanation of what jewelry market is being described or definition of value used. It will also include the professional independent jewelry appraiser's signature and title. A professional independent jewelry appraiser will ALWAYS list his/her jewelry appraisal qualifications with their signature. If you do not see their professional jewelry appraisal qualifications after their name, it is most likely that they are NOT professional independent jewelry appraisers. The "Graduate Gemologist" title from the Gemological Institute of America is NOT an independent jewelry appraiser's title.

An independent jewelry appraisal can be done on any item of wedding jewelry, no matter what it is composed of. Un-mounted gemstones are not a requirement for a wedding jewelry appraisal; in fact the wedding jewelry being appraised doesn't even have to contain a gemstone. The purpose of an independent jewelry appraisal is to put a dollar value on the wedding bands being appraised, often for jewelry insurance purposes. There are several other purposes including diamond quality control and confirming that the wedding jewelry is properly represented by the seller.

If you have an antique diamond engagement ring, you may want to get an independent jewelry appraisal to learn about the history of that era of jewelry and its current value. It is a good idea when buying an expensive piece of wedding jewelry or a diamond engagement ring to get an independent jewelry appraisal. Many reputable jewelers will either let you bring an independent jewelry appraiser into the store. Some jewelers let you borrow the diamond engagement ring or wedding jewelry to take to a professional independent jewelry appraiser. A few jewelers require that you purchase the diamond engagement ring or wedding jewelry, and then allow you a period of time in which you can have the diamond engagement ring appraised. Return the diamond engagement ring or wedding jewelry for a full refund if it doesn't meet your expectations. Reputable Internet diamond and jewelry dealers will even send the professional independent jewelry appraiser the diamond engagement ring or wedding bands so that you can have an independent jewelry appraisal before you purchase the engagement ring. Many of the internet diamond brokers or online jewelry stores will agree to send the diamond engagement ring or wedding jewelry to a properly qualified independent jewelry appraiser without being paid first as long as you cover the shipping and the professional independent jewelry appraiser's fee. Make sure you use a professional independent jewelry appraiser who is properly qualified. Only use a professional independent jewelry appraiser chosen by you, not by the jeweler or seller. You should be able to choose any professional independent jewelry appraiser you want, for any reason you want and you should be able to get a refund for an engagement ring or wedding jewelry, for ANY reason when bought from online jewelry stores or internet diamond brokers.


The Differences between a Jewelry Appraisal and a 'Diamond Lab Certificate'

Jewelry appraisals and diamond lab certificates are two important types of reports about your diamond but they do not serve the same purposes. It is also important to note that an appraisal differs from a diamond certificate (also called a Diamond Quality Report). A diamond certificate is a document generated by a gemological laboratory that describes some of the properties of a loose diamond but does not offer any type of valuation. It's an authentication report. The most obvious difference between a diamond certificate and an appraisal is that a certificate does not offer a value but there are others. Gemological Lab reports are for a single un-mounted gemstone while appraisals are generally for a piece of jewelry. A good appraisal contains everything on the gemological lab report (probably even a full copy of the gem lab report) plus quite a bit more including details on the cutting of the diamond, condition, craftsmanship, details on other diamonds or gemstones and basically everything about the piece other than the center diamond as well as a discussion of the marketplace being described and, of course, the bottom line value. You'll also notice that gemological lab reports don't generally have a signature, a list of qualifications or any of those other 'extra' pages that appraisals tend to have.

More on independent jewelry appraisals

A gemological lab certificate or grading report describes some important features of the un-mounted diamond. This invaluable document shows in detail a diamond's carat weight, shape, color, clarity, overall dimensions, and several of the other physical characteristics of your diamond. It provides a unique evaluation of a diamond and is a source of vital information to the trained gemologist, jeweler, and/or consumer. Any treatment used to enhance the diamonds will be identified. The report will enable the jeweler or appraiser to establish the current market value of your diamond should you desire to obtain insurance of your jewelry. Reports differ for diamonds and colored gems. Think of a certificate as kind of a road-map of the gemstone--it will not change unless the gem undergoes alterations or an error was made during evaluation.

More of what's in a Diamond Lab Certificate.

A Diamond Quality Report should contain all of the following:
Shape and cut of the diamond (Round Brilliant, Princess, etc.; the physical dimensions of the diamond, including measurements and carat weight.)
Color grade (The usual color range of diamonds is colorless to light yellow and brown.) These diamonds are graded with a single letter ranging from D - Z in increasing order of color saturation. This "D - Z" color range was developed by the Gemological Institute of America to allow people to communicate diamond color in an effective and standardized way. Everything beyond Z is considered to be a fancy colored diamond and will be graded on a separate scale.
Clarity Grade - Almost all diamonds contain small features called "inclusions". These can be crystals of other materials, small cracks or growth planes in the diamond, scratches on the surface, even other diamond crystals. Most diamond inclusions are not visible to the naked eye and require magnification for viewing. Diamonds with no inclusions are quite rare and extremely valuable. The diamond clarity scale ranges from F (flawless) to I-3 (Inclusions severely that affect the beauty or durability of the stone).
Plotting diagram - This is a small drawing with the facet pattern of the diamond and markings for the location of the inclusions. The GIA reports on smaller diamonds (called a 'diamond dossier') don't contain this but all AGS reports have one and GIA reports on bigger stones have it.
A "Cut Grade" indicating the physical and optical (light performance) properties of the diamond are included on some reports from some gemological labs. GIA includes this with round brilliant cuts and AGS includes it on round brilliant, princess and emerald cuts. Details on the GIA and AGS systems are explained on their respective websites.
Treatments - All treatments done to the stone other than cutting should be listed. This can include laser drilling, High Pressure - High Temperature (HPHT) color treatment and fracture filling (Yehuda Diamonds). These can have an important affect on the value of the diamond.
Fluorescence - Some diamonds respond to ultraviolet light with a glow known as fluorescence. The presence or absence of fluorescence can be useful in recognizing your diamond and, in rare circumstances can affect the beauty in certain lighting conditions.
Symmetry & Polish - These are the finish details that describe the quality of diamond workmanship. They are usually graded on a 5 step scale from poor - excellent or ideal.
Girdle Inscriptions - Some diamonds have markings written on the edge using a laser. This can be as simple as a serial number and a logo to personalized messages proclaiming your love and literally carving it in stone. If these markings were there when the lab saw the diamond, they will be mentioned on their diamond report.


How do I hire a professional independent jewelry appraiser?

As a professional jewelry appraiser who does not buy or sell the jewelry being appraised and whose business is focused exclusively on independent jewelry appraisals attests that their jewelry appraisals are unbiased. It is important to hire a professional independent jewelry appraiser who is accredited. Many jewelry appraisal organizations offer credentials that the professional independent jewelry appraiser may use after their name. So, in addition to the GIA gemologist graduate (GG) title you may see other initials that appear.

Ask for professional affiliations and credentials. Make sure you study a professional independent jewelry appraiser's résumé and credentials. Every reputable accredited jewelry appraiser will provide this information and you shouldn't hire an appraiser who doesn't readily provide it. Under current laws, there are no required licenses for jewelry appraisers. Because of that, you have to do the homework yourself to make sure you are hiring a qualified professional independent jewelry appraiser. Don't use a jewelry appraiser who offers to buy the item, sell you alternative item or charges a percentage of the item's value. This is unethical. A jewelry appraiser can't give an unbiased opinion of value if he or she has a monetary interest in the worth of the jewelry.

Professional jewelry appraiser's credentials and jewelry appraisal qualifications

Choose a professional jewelry appraiser who is a credentialed member of a nationally recognized jewelry appraisal organization, such as the American Society of Appraisers (ASA), International Society of Appraisers ISA, and American Gem Society AGS, as well as a Graduate Gemologist (GG) of the Gemological Institute of America (GIA)

MGA-Master Gemologist Appraiser is offered through the American Society of Appraisers. Requirements include years of experience, gemological degree, comprehensive examination, and background evaluation. The American Society of Appraisers is the oldest organization in the country, and its testing the most rigorous.
CAPP-Certified Appraiser of Personal Property is offered through the International Society of Appraisers. Requirements include years of experience, gemological degree, comprehensive examination, and background evaluation.
ICGA- (Independent Certified Gemologist Appraiser) offered through the American Gem Society. Requirements include years of experience, gemological degree, comprehensive examination, eye exams, background evaluations, annual training and re-qualification.
NGJA-National Gem and Jewelry Appraiser is offered through the National Association of Jewelry Appraisers. Requirements include years of experience, gemological degree, and background evaluation.

Every one of these organizations requires the following of Uniform Standards of Professional Appraisal Practice (USPAP); which is the generally accepted standards for all professional appraisal practices in North America. USPAP contains standards and the code of ethics for all types of appraisal services. Ask about the professional jewelry appraiser's credentials and make sure they are still active. All of these societies have online lookup systems for their members.


Insuring Engagement Rings and Other Fine Jewelry

You might be surprised to learn that your homeowner's or renter's insurance policy probably does not offer full coverage for your diamond engagement ring and other fine jewelry. Your insurance policy probably covers jewelry theft, but not loss that occurs for other reasons. Most homeowner insurance policies have a dollar amount of coverage for unscheduled property such as jewelry, but there are limits and they cover theft only-not mysterious loss or damage. Most insurance companies will not ask for updated jewelry appraisals on a regular basis, so it is up to you to regularly have your jewelry inspected and reappraised to reflect current markets.

Does your homeowner's insurance policy cover jewelry loss for reasons other than theft--such as for lost or damaged items? Read your policy carefully and ask your insurance agent to clarify the types of losses that are covered on your standard policy.

Many people prefer to buy a standalone type jewelry insurance policy because they don't want a jewelry claim on their homeowner's insurance. Homeowner's insurance rates are raised and based on claims history. Although some of your jewelry may be covered under your renter's or home owner's insurance policy, it may be worth insuring your wedding jewelry separately if its value exceeds that covered on your other policies You can usually purchase additional jewelry insurance for your wedding jewelry, but be sure to ask your jewelry insurance agent questions so that you have a good understanding of the coverage.

Jewelry Insurance

Considering the peace of mind it provides, jewelry insurance coverage is relatively inexpensive. Jewelry insurance premiums will range from 1-3% per year of the declared value of the wedding jewelry or diamond engagement ring and are based on the address where you keep the wedding jewelry, the level of coverage you select, your personal claims history and other policy details, Many people take steps to protect their wedding jewelry by installing alarms and security measures in their homes and most jewelry insurance companies reward this with lower premiums. Consult with your insurance agent about the details that are available from your particular insurance company for your wedding jewelry.

The minimum acceptable requirements from the jewelry insurance companies regarding documentation on your diamond engagement ring or wedding jewelry are usually very easy to meet. You may already have met them with paperwork that came with the purchase of your wedding jewelry. It's your requirements that should be more stringent. With most typical jewelry insurance policies, the jewelry insurance company is agreeing to replace a lost or stolen wedding jewelry with another diamond engagement ring of 'like kind and quality' in the case of a loss of your wedding jewelry. Defining 'like kind and quality of the diamond' is why they want an independent jewelry appraisal. This makes the independent jewelry appraisal effectively a statement by you about what will constitute an acceptable replacement diamond engagement ring. Think of the independent jewelry appraiser's description as the purchase order for the replacement wedding jewelry. Read the independent jewelry appraisal over carefully and try to picture what the replacement diamond engagement ring will look like if it's based on the jewelry appraisal's description of your wedding jewelry. If it's not in the independent jewelry appraisal, you aren't entitled to it in the replacement of the diamond engagement ring or wedding jewelry.


10 key things to remember about jewelry appraisals and jewelry insurance.

1.                  Have all of your wedding jewelry appraised by an independent jewelry appraiser. Make sure each item is listed, described and valued in the jewelry appraisal; the description provided will be used as the purchase order for the replacement jewelry so make sure it contains all of the details that are important to you.

2.                  Read your home owner's or renter's insurance policy to find out the amount of coverage it provides for items such as jewelry.

3.                  Keep in mind that rates for personal jewelry insurance may vary according to your zip code, and you can select coverage with or without a deductible.

4.                  Speak to your insurance agent about adding a rider to your home owner's policy to cover jewelry that goes beyond the value of personal property covered in the basic policy.

5.                  Consider separate jewelry insurance (such as that offered by a jewelry insurance company) as another alternative.

6.                  Compare all insurance plans, as well as the reputation of each company, and choose the one that gives you the most coverage for your money and the most flexibility if you have to replace jewelry. The best jewelry insurance will cover loss, theft and damage.

7.                  When you are figuring out the basic coverage offered by your home owner's policy, don't forget to figure in deductibles. After a deductible is paid, you should be able to receive the full value of your jewelry

8.                  Beyond having insurance, to keep your wedding jewelry safe you should store it in a personal safe or in a safety deposit box.

9.                  Having photos of jewelry items is also important, as lost or stolen pieces can sometimes be recreated on the basis of a good photograph.

10.               All jewelry should be appraised on a regular basis for reassessment of value. If your jewelry is not valued appropriately, you will not be able to recover what you need to replace it if it is lost, damaged or stolen.


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