Lower insurance appraisal than paid price?

[Gleam]

What is the likelihood an independent appraiser appraises your diamond for less than you paid? Just curious, as I do not want to bother with a $100 independent appraisal unless I am sure it will be slightly more than what I paid. The insurance agent I''m working with will not insure my diamond with the sales receipt amount because it falls $500 short of the minimum insurance requirement. I guess minimum rates have increased, since the older posts I searched through seem to indicate lower minimums.

I''ve posted my specs here before and was told that I paid a fair price (thank you again to all the experts), so I will be a little shocked if the appraiser tells me it''s worth less.

I''m so iffy on whether or not I want insurance that I don''t even want to spend an unnecessary $100 on an appraisal, especially if it''s not going to help me acquire insurance coverage because the appraisal amount is too low.

And to stipulate, I read Neil''s VERY helpful FAQ regarding appraisals and didn''t quite see what I was looking for.

 

[sonnyjane]

I'm not sure how likely they are to give you a lower appraisal, but I would also not count on them to appraise it for $500 more than what you paid, which is what you'd need to have it insured. Hopefully someone here will have some advice or suggestions.

 

[Gleam]

Date: 11/2/2009 10:56:25 AM
Author: sonnyjane
I'm not sure how likely they are to give you a lower appraisal, but I would also not count on them to appraise it for $500 more than what you paid, which is what you'd need to have it insured. Hopefully someone here will have some advice or suggestions.

Well, I expect some give and take within a few hundred (or few thousand?) bucks -- surely the appraiser is not going to quote the exact amount of my sales receipt! At least, I hope not.

My diamond did come with its own appraisal of $32,000 but that's an absurd amount (as confirmed by posters here).

 

[sonnyjane]

Date: 11/2/2009 11:28:57 AM
Author: Gleam

Date: 11/2/2009 10:56:25 AM

Author: sonnyjane

I'm not sure how likely they are to give you a lower appraisal, but I would also not count on them to appraise it for $500 more than what you paid, which is what you'd need to have it insured. Hopefully someone here will have some advice or suggestions.

Well, I expect some give and take within a few hundred (or few thousand?) bucks -- surely the appraiser is not going to quote the exact amount of my sales receipt! At least, I hope not.

My diamond did come with its own appraisal of $32,000 but that's an absurd amount (as confirmed by posters here).

Who are you using for insurance that has a minimum so high? If you have a ring that was appraised at $32,000, I'd imagine the actual appraisal will still be at least reasonable. I have Jeweler's Mutual and my wedding set is only $6,000. Have you looked into them?

 

[NovemberBride]

Gleam, if it helps, I went to one of the Pricescope recommended appraisers (who is also a frequent PS poster) and my ring appraised for $10k more than we paid. I think we got a fair deal, not a crazy deal on our diamond, and the appraisal was still much higher than the price paid. I think most people who got a pretty good deal on their diamond end up with appraisals that are substantially in excess of what they paid, particularly when talking about a larger diamond like yours. The reason our appraiser gave for the much higher appraisal is that the replacement cost assumes you are buying from a traditional retailer. So if you bought online or somewhere else (diamond district, family jeweler) where you got a lower price, they don''t necessarily take that into account - they are assuming you are going to a traditional B&M store to replace your diamond. However, you also want to keep in mind that the higher the appraisal, the higher the premium. So you may want to talk with the appraiser because I know they will be flexible. For example, if the appraiser gives you a replacement cost of $35k, but you know you can replace for $30k, and that''s enough to meet the minimum of the company you want to work with, you may want to ask them to use the lower value so you can save on premiums.

 

[Gleam]

Date: 11/2/2009 11:35:25 AM
Author: sonnyjane

Who are you using for insurance that has a minimum so high? If you have a ring that was appraised at $32,000, I''d imagine the actual appraisal will still be at least reasonable. I have Jeweler''s Mutual and my wedding set is only $6,000. Have you looked into them?

I have looked into JM, but I''m only looking for cash-out policies, not replacement policies. My understanding through the insurance agent is that Chubb now has a minimum value of $12,000. Maybe this varies by state or metropolitan area or whatever, I''m not sure, but that''s what I was told.

 

[Gleam]

Date: 11/2/2009 11:37:17 AM
Author: NovemberBride
Gleam, if it helps, I went to one of the Pricescope recommended appraisers (who is also a frequent PS poster) and my ring appraised for $10k more than we paid. I think we got a fair deal, not a crazy deal on our diamond, and the appraisal was still much higher than the price paid. I think most people who got a pretty good deal on their diamond end up with appraisals that are substantially in excess of what they paid, particularly when talking about a larger diamond like yours. The reason our appraiser gave for the much higher appraisal is that the replacement cost assumes you are buying from a traditional retailer. So if you bought online or somewhere else (diamond district, family jeweler) where you got a lower price, they don't necessarily take that into account - they are assuming you are going to a traditional B&M store to replace your diamond. However, you also want to keep in mind that the higher the appraisal, the higher the premium. So you may want to talk with the appraiser because I know they will be flexible. For example, if the appraiser gives you a replacement cost of $35k, but you know you can replace for $30k, and that's enough to meet the minimum of the company you want to work with, you may want to ask them to use the lower value so you can save on premiums.

NovemberBride, many thanks for your thoughtful response! That does help a lot, thanks. Yes, in the appraisal that came with my diamond, it says that it takes into account what the appraiser believes the average cost of my diamond at B&M jewelers within the Chicago metropolitan area. Still, the inflated figure is much higher than what I want to insure for, and the experts here seem to agree.

Thank you for telling me that the appraiser can be flexible -- I wasn't sure of that. I am using a PS-recommended appraiser. Oddly, there's only one PS-recommended appraiser actually within the city of Chicago. The rest seem to be in the suburbs.

By the way, it's ridiculous that I can comfortably ask my fiance to shell out five figures for a diamond, but I get all stingy about spending an extra $100 for an appraisal or a few hundred for insurance... *sigh*

 

[Regular Guy]

Hopefully your relationship with Chubb will work out, and they''re named most for cash out policies.

But, I believe there are other, perhaps lesser known options. I''ve read of them here before.

Maybe someone else here reading can assist in naming these other insurers?

 

[sonnyjane]

Date: 11/2/2009 11:39:49 AM
Author: Gleam

Date: 11/2/2009 11:35:25 AM

Author: sonnyjane


Who are you using for insurance that has a minimum so high? If you have a ring that was appraised at $32,000, I''d imagine the actual appraisal will still be at least reasonable. I have Jeweler''s Mutual and my wedding set is only $6,000. Have you looked into them?

I have looked into JM, but I''m only looking for cash-out policies, not replacement policies. My understanding through the insurance agent is that Chubb now has a minimum value of $12,000. Maybe this varies by state or metropolitan area or whatever, I''m not sure, but that''s what I was told.

Oh, yes, I remember your other posts now about wanting a cash-out. Sorry about that!

 

[denverappraiser]

Date: 11/2/2009 11:42:57 AM
Author: Gleam

Date: 11/2/2009 11:37:17 AM

Yes, in the appraisal that came with my diamond, it says that it takes into account what the appraiser believes the average cost of my diamond at B&M jewelers within the Chicago metropolitan area. Still, the inflated figure is much higher than what I want to insure for, and the experts here seem to agree.

Your appraiser is describing what a particular item will be expected to cost within a particular marketplace and on a particular date. No problem here, that’s the nature of most appraisal assignments but perhaps this isn’t the appropriate marketplace for your needs? Talk to your appraiser about it. It doesn't sound like you're all that interested in what the average cost at a Chicago B&M store is, even if they value conclusion is correct for that particular marketplace. The correct answer to the wrong question is doing you no favors.


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

 

[Regular Guy]

Without a doubt, I would definitely check with a local State Farm Insurance agent. Or two.

See this link.

In my shopping for insurance years ago, I did have a phone meeting (maybe in person, too, I don''t remember), understood that they do have dedicated jewelery coverage, and it seems they will provide a cash out option...at least possibly.

If only to offer yourself a competing quote to Chubb, I''d check them out.

Let us know.

 

[Gleam]

Neil and Ira, many thanks for your responses. I will try to be clear with the appraiser about what I need, and I''ll definitely check out State Farm. I appreciate the help, so thanks again.

 

[Regular Guy]

While you''re at it, you could certainly provide a service to many by including both Fireman''s Fund and Geico in your review of options.

Regards,