Appriasal and Insurance

[iggy38]

I just bought my soon to be fiancee her rings with all your great help on this site. I have two quick questions remaining.

1. I just got the appriasal and went to add it my homeowners policy, they stated they do not offer this becuase it is for a Condo policy. Does any one know any good places to ensure the ring? Any advice would be great.

2. I got the appriasial back and its value was a lot more than what I paid. More than 50%, is that normal?

Thanks for all the help!!!!!!

 

[elle_chris]

Date: 3/12/2008 4:54:53 PM
Author:iggy38
I just bought my soon to be fiancee her rings with all your great help on this site. I have two quick questions remaining.

1. I just got the appriasal and went to add it my homeowners policy, they stated they do not offer this becuase it is for a Condo policy. Does any one know any good places to ensure the ring? Any advice would be great.

2. I got the appriasial back and its value was a lot more than what I paid. More than 50%, is that normal?

Thanks for all the help!!!!!!

You can try Chubb (don''t know if they''ll insure just the ring though) or Jewelers Mutual. As far as the appraisal, i''d have a problem with that. All it does is increase your premium but in case of a loss, they''ll still cover whatever it happens to be worth. So if you paid 1500 for a .50 carat and got it insured for 3k. They''ll still find you a .50 for 1500.

 

[denverappraiser]

Date: 3/12/2008 4:54:53 PM
Author:iggy38
1. I just got the appriasal and went to add it my homeowners policy, they stated they do not offer this becuase it is for a Condo policy.

Thanks for all the help!!!!!!

Who is your insurer and what state are you in?

Try www.jewelersmutual.com or
www.touchstoneinsurance.com

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Jewelry Appraisals in Denver

 

[ImpatientOne]

Yes, it is common for diamonds to appraise for more than what you paid, especially if you are purchasing from a reputable online vendor. I recently upgraded and my new set was appraised by a PS recommended appraiser for more than 2x what I paid...

 

[elle_chris]

Date: 3/12/2008 7:25:17 PM
Author: ImpatientOne
Yes, it is common for diamonds to appraise for more than what you paid, especially if you are purchasing from a reputable online vendor. I recently upgraded and my new set was appraised by a PS recommended appraiser for more than 2x what I paid...

ImpatientOne,
But if the item that was insured is only worth 1k, in case of a loss, if they can find the same item for 1k, that''s what it''ll cost them. At least that''s what I was told by my Travlers Ins. rep. He said I can insure for whatever amount I want, but that doesn''t mean in case of loss that''s what they''ll pay.

So I''m not sure how having such a high appraisal is worth anything other than higher premiums.

Can an expert please chime in here.

 

[arjunajane]

I too would be interested in the answer to elle''s Q - or perhaps it is individual to each insurer?

 

[choro72]

Date: 3/12/2008 7:52:23 PM
Author: elle_chris

Date: 3/12/2008 7:25:17 PM

Author: ImpatientOne

Yes, it is common for diamonds to appraise for more than what you paid, especially if you are purchasing from a reputable online vendor. I recently upgraded and my new set was appraised by a PS recommended appraiser for more than 2x what I paid...

ImpatientOne,

But if the item that was insured is only worth 1k, in case of a loss, if they can find the same item for 1k, that''s what it''ll cost them. At least that''s what I was told by my Travlers Ins. rep. He said I can insure for whatever amount I want, but that doesn''t mean in case of loss that''s what they''ll pay.


So I''m not sure how having such a high appraisal is worth anything other than higher premiums.


Can an expert please chime in here.

This is what I heard too...Experts? I guess the way to tell is to see if the appraisal matches the description of the cert. If it''s better than what the cert says, great. If it''s worse, then that''s just paying more for premium. No? Anyone?

 

[elle_chris]

I found a link where DenverAppraiser explains it.

https://www.pricescope.com/community/threads/insurance-appraisal-question.73115/

 

[iggy38]

thanks for the article. Part of the issue is i bought through a friend of the family and the ring and wedding band were at cost, diamond was retail.

In regards to insurance, I am in florida with Universal Property and Cas. It is very hard to get insurance now and they were writing in my condo area. I will look at those sites for seperate insurance for the ring. thanks!

 

[krisvrn]

Date: 3/12/2008 4:54:53 PM
Author:iggy38
I just bought my soon to be fiancee her rings with all your great help on this site. I have two quick questions remaining.


1. I just got the appriasal and went to add it my homeowners policy, they stated they do not offer this becuase it is for a Condo policy. Does any one know any good places to ensure the ring? Any advice would be great.


2. I got the appriasial back and its value was a lot more than what I paid. More than 50%, is that normal?


Thanks for all the help!!!!!!

My ring is insured through travelers. My coverage is for actual value not replacement value, meaning, if ring is appraised for $14K and it is lost, they will cute a check for that amt. Replacement val means they would replace stone for similar quality, color, size and if they can do it for $10K then they will...

 

[ImpatientOne]

Date: 3/12/2008 7:52:23 PM
Author: elle_chris

Date: 3/12/2008 7:25:17 PM
Author: ImpatientOne
Yes, it is common for diamonds to appraise for more than what you paid, especially if you are purchasing from a reputable online vendor. I recently upgraded and my new set was appraised by a PS recommended appraiser for more than 2x what I paid...

ImpatientOne,
But if the item that was insured is only worth 1k, in case of a loss, if they can find the same item for 1k, that's what it'll cost them. At least that's what I was told by my Travlers Ins. rep. He said I can insure for whatever amount I want, but that doesn't mean in case of loss that's what they'll pay.

So I'm not sure how having such a high appraisal is worth anything other than higher premiums.

Can an expert please chime in here.

Guess it depends on your policy - if your policy is for replacement value, you'll get an equal replacement. If it's actual value, you will get a check for the insured amount to go out and find a replacement. My insurance company demanded a copy of the appraisal and AGS report in order to insure for actual value.

My original response was to answer the question as to whether it was common for the appraisal to come back for more than what one paid - and yes, it is VERY common!

 

[denverappraiser]

Yes, it’s very common. There are 4 basic reasons for this.

First, and most common is that the appraiser is answering the question “what is appropriate funding for the insurer to replace this item with another new one of like kind and quality within the customary marketplace and within in a reasonable amount of time?” This questions has lots of important qualifiers like ‘new’, ‘like kind and quality’, ‘customary marketplace’, and ‘reasonable time’ that can seriously affect the value conclusion. The definition of value is terribly important and can lead to wildly different conclusions. “What will you give me for this?”, for example, could also be described as an item’s ‘value’ but it will almost always be a VERY different number from “What would you expect Mark Morrell to charge to custom make one like it”, another perfectly valid question.

Often replacement appraisals will be expecting things like custom manufacturing using US labor that may not have been applicable when you purchased it. Materials are presumed to be purchased at wholesale in a repeatable commercial environment and the replacement jeweler is presumed to have a showroom, staff, fancy boxes and the general sorts of amenities that people think of as a jewelry store. Certain items, like pave set things with tons of stones and labor involved or very exotic items, like an antique cluster ring will usually show a bigger difference between transaction cost and replacement value than more ‘commodity’ type items like a big diamond set in a basic solitaire setting.

Second is the description. Appraisers are usually looking at mounted goods and often under less than optimum conditions and this can lead to important differences in the description. An approximately 2.00ct/VS1/F-G diamond is very different from a 1.86ct/VS2/G even though an appraiser can easily confuse the 2 when examining a mounted stone. Just check the database on this site. If the description the appraiser is using to base their estimate is different from what the selling jeweler used when you made your purchase it can have a profound affect on the conclusion. This cuts both ways. If the seller told you it was VS1/F and provided an appraisal to that affect the appraiser calls it an SI2/J, you can expect a considerably different conclusion.

The third big affect is the date. Much of appraising seems to the public and even some appraisers like a psychic power. We’re expected to predict the future including things like forecasting the price of gold and the availability of labor with some very unusual talents. I can’t speak for other appraisers but if I could do that, I would be a very wealthy man through my activities on the commodities exchange. Platinum, for example, has almost doubled in the last year alone. Heavy platinum items appraised even a few months ago may be significantly undervalued. Will the cheapie store where you bught it even be in business when the loss occurs? If not, where will the replacement happen? Since most consumers don’t like to pay appraisers any more often than absolutely necessary (unfortunately for us), the solution is a bit of shenanigans when they calculate the value conclusion. Most people would prefer to be slightly overinsured than slightly underinsured and they would like to be able to afford the replacement even if one or more of the variables doesn’t go as predicted. Big diamonds, by the way, are up considerably in the last few years. People who bought items before about 2005 where the bulk of the value is in a single diamond should consider updating their appraisals.

Last but not least is vanity. Everyone wants to know that they got a good deal and often this is really the question being asked even though what was requested is an insurance document. For reasons that make little sense to me, people are profoundly unhappy when the get an appraisal that says they got what they paid for and that they paid an appropriate price for it. For appraisers working through or for jewelry stores, there’s a fair amount of pressure to appraise things high because the document is going to be used as evidence to decide if the store is charging fair and reasonable prices for what they have. ‘How come MY earrings are only worth $xxx and the ones like them in your case cost $yyy and you advertisement says that’s a great bargain?’

The solution to all of this is to find an appraiser that you trust and then be straight up with them about what you want to learn. The correct answer to the wrong question is doing you no good and it’s a waste of both your time and money. Ask and answer questions and provide all of the relevant information including lab reports, designer names and whatever other details you want considered in the case a replacement becomes necessary. You should walk away from your appraisal session with a better understand of what you have and how it relates to the marketplace you are considering.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[denverappraiser]

Date: 3/13/2008 1:40:14 AM
Author: ImpatientOne

Guess it depends on your policy - if your policy is for replacement value, you'll get an equal replacement. If it's actual value, you will get a check for the insured amount to go out and find a replacement. My insurance company demanded a copy of the appraisal and AGS report in order to insure for actual value.

Travelers is a good company but watch out for the term ‘actual cash value’. This doesn’t mean what you think it does. This is an insurance industry term that refers to retail price new less depreciation. What you’re describing is a declared or agreed value policy where they agree in advance to pay a specific amount of damages in the case of a loss. Both ACV and declared value policies are pretty unusual in the jewelry insurance business.

Absolutely it depends on the policy. These things vary quite a bit from state to state, from company to company and even from policy to policy.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[MP]

I went with Chubb to insure my ring. I have a stand alone policy with them and they are only covering the e-ring. I haven''t had to file a claim as of yet thank goodness, but they are suppose to be the best in the business in terms of simply mailing you a check for the appraisal value if the ring is lost or stolen. Likewise, they are impeccable in helping you out if the ring is damaged.

Bear in mind that in order to have a stand alone policy for a single piece that the ring must be appraised for no less than $15,000.