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Updating Appraisals?

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AmantdeChat

Brilliant_Rock
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Oct 17, 2003
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Should an appraisal be updated every few years? Basically if prices go up with diamonds, etc. would it be wise to have an appraisal redone from time to time to keep your insurance coverage at the correct level? I would think it would help your cause if you needed to use your insurance to cover a lost or stolen piece of jewelry and you had an updated appraisal to back up your claim. Of course, it might depend on the type of insurance and/or insurance company you are using.
What do you guys think? Does anybody do this with their own jewelry?
 

aljdewey

Ideal_Rock
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Nov 25, 2002
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I seem to remember reading that appraisals should be updated once every three years.
 

diamondlil

Ideal_Rock
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Jun 8, 2003
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I've heard the same thing, although I really don't understand the need. If it an item is worth one amount in a given year, couldn't the updated amount be calculated using the specific information on the appraisal that you have? The item has not changed (unless it has been damaged in some way), so why would you need to have the same item reappraised every few years?




So far, my insurance (Chubb) has never required or requested that I do this. They do send me a letter every year asking if I would *like to* bump up my insurance 5% or 10% just to make sure I'm covered, although I have not done this either. As long as you know you are insured for enough to cover the purchase of a new item, then what could be the point? Appraisals are expensive to have them redone every few years, especially when you have multiple items.




DiamondLil
 

hoorray

Ideal_Rock
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May 16, 2003
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I agree. I've always heard you should do them periodically, but have never done that. (What a pain and expense!) My insurance says it is not true replacement value in that if they can not replace it for the covered amount, they will pay out the covered amount. To avoid this, they recommend updating the appraisal and $$ covered if whenever I think the value might have changed enough to make it meaningful.

It would be nice if you could just do updates without starting from scratch.
 

Richard Sherwood

Ideal_Rock
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It would be nice if you could just do updates without starting from scratch.
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If you go with the same appraiser who did the original appraisal they will usually give you a break on the updates.

SGL update rates for example are 40% of the original fee.

Most insurance companies recommend updates every 3 years, and some have begun making them mandatory every 5 years.
 

hoorray

Ideal_Rock
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May 16, 2003
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Hi Rich, thanks for the info! I guess maybe I should get myself organized and get these things updated one of these days.
sick.gif
 

AmantdeChat

Brilliant_Rock
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Oct 17, 2003
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Thanks for the info. It's always nice to have such a broad range of expertise and experience to be able to go to when I have a question about jewelery, diamonds, etc.
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Thanks again.
 

verticalhorizon

Brilliant_Rock
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Mar 9, 2004
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840
My question is if you do get your e-ring re-appraised very few years, what is the real likelyhood that the value will change?

Will it be more likely to be valued less in the future? Why would you want to indicate that to the insurance company? If it's valued more, that's a different story.
 

Stargazer

Rough_Rock
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Mar 4, 2004
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Don't know if its any help, but I've noticed that with each annual renewal notice my insurer has increased the listed value of my two rings that are individually identified by about 20 GBP each.
So I've not "bothered" to get them reappraised so far, but maybe I should do. The jeweller did say on purchase to get them re valued every 3-5 years.
 

EdSkinner

Shiny_Rock
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Jan 29, 2004
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304
Diamonds are going to go up and down with the market and inflation. Think back to 1980. Inflation was running in the double digets. The preverable 1.00 ct. D IF was listed around $56,000 P/C wholesale. Silver was at $55.00 an ounce. Gold was $900 an ounce What is it now? Big change. Two months ago platinum was at $450 an ounce. Jewelers mutual wants stones reappraised on a yearly basis. You decide what your comfort level is on your personal property insurance. One, three, five? I really wouldn't let it go more than that.
 

rbrilliant

Rough_Rock
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Aug 21, 2004
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Updating your appraisal on a scheduled basis is something you should consider speaking with your appraiser about. Not every appraiser will give you a "buffer zone" needed to ensure your item will have enough protection over the next several years. There are appraisals that are only good for one month or even day. Meaning that the appraisal price was so close to the selling price that in one month the appraisal needed to be updated because of rising diamond prices. Asking your appraiser how often you should update is a good idea. This will give you the assurance that you are protected for a period of time. Remember, every appraiser is different. Just as an example. My appraisals have a five year update policy. I take into consideration calculated price increases over the past years and apply this amount into the item being appraised. This protects my clients from loss, theft, or damage without having to come back each year or every two years. It also is not just doubling the sale price so you end up paying double the insurance premiums. It is also good if your appraiser keeps a copy of your appraisal on file so he or she can easily look up your appraisal and check on the status at any given time. The approach to appraising is different in all cases and should be discussed with your appraiser at the time of appraisal. I hope this helps.
Justin Krall G.G.; A.J.P.
Manhattan Appraisers
www.manhattanappraisers.com
 

yowahking

Shiny_Rock
Joined
Aug 15, 2004
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317
diamondlil,
The insurance company asking you whether you want to bump your coverage is a great way to get them more money. Most people never have a loss, think about if only 20% of those who are asked "bump" the coverage and only 1% ever have a loss. Pretty good yearly increase in business. My advise is to pay attention to what you have and what the market does. Any good jeweler or appraiser can tell you if plat, gold, diamonds, etc have increased significantly since you had your last appraisal. If you have a large plat ring with not stones and plat drops in half next year, leave it. If you have a large diamond that jumped in value $5000 since your last appraisal, reappraise and "bump" coverage.
Although not taking pot shots at an appraiser's policy, I am not sure adding the same increase for the next 5 years based on the last 5 years is a consistant gauge. Not every 5 year period acts the same. For sure with metal prices. With Rolex pricing, you could do it. I would bet that we will not see the same increase in diamonds over the next 2 years that we have seen in this past 2 years. We may even see a big shakeup once AGS and GIA unleash new cut grading.
What do you do with Tanzanite that bounces all over the map on prices in a 5 year period?
 

denverappraiser

Ideal_Rock
Trade
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Jul 21, 2004
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All Y'all,

An appraisal update is not just a revision of the price.

The process of requiring updates provides several other pieces of information that are important to the insurance company, and maybe to you as well. Firstly, it is an examination of the condition of the piece and a declaration of any damage that may have occurred since the last appraisal. It’ is common to feel that having your ring checked by a salesperson at a store is a sufficient examination, and sometimes it is, but often these people are completely untrained and they may not be considering all of the issues that you wish they were. In addition to documenting any damage, there may have been repairs or modification that the company is unaware of. In order for the insurance company to make you whole again in the case of a loss, it’s essential that they know what it is that they are insuring. The appraiser also serves and an independent observer for both you and the company that the piece still exists, that it is still in your possession, and that you still claim to be the owner of it (or not, as the case may be).

Neil Beaty GG ISA
Independent Appraisals in Denver
 

rbrilliant

Rough_Rock
Joined
Aug 21, 2004
Messages
21
"I take into consideration calculated price increases over the past years and apply this amount into the item being appraised."
I take past price increases into "Consideration". It is not just the past 5 years. It could be the last six months or the last year. Every item is different and unique. Just to clarify, I do not have a formula for tanzanite. I go out into the market place: wholesale and retail, I use the guide, Auction market resource, and other methods of finding the proper replacement value for tanzanite. Research and honesty are the best tools for appraising in my opinion.
Best Regards,
Justin Krall
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