2011 GSA "Evaluation" vs 2014 GIA Appraisal

[mjbennett9]

A little bit of the backstory first:
Purchased ring about 2.5 weeks ago, and proposed 1.5 weeks ago, after getting ring mount changed from yellow gold to white gold. I spent a good amount of time learning about diamonds (no pro) and several hours in the store looking at each diamond (at Zales). Zales bashing aside, my experience was good (and I heard of too many online horror stories to be fair to retail stores as well).

Anyway, I looked at .75ct all the way up to 2.0ct. The former and the latter were not for me. I wasn't really keen on 1.0ct either and ended up spending a lot of time looking at 1.25ct and 1.5ct diamonds. A lot of the diamonds were trash--can't believe someone would buy them. Cloudy, never mind the inclusions of black, and yellow color. Their gradings were off in many cases. However, my final two choices, to me, seemed to graded in favor of the buyer (me).

The 1.25ct diamond likely was a better diamond, but I really liked the 1.5ct; partly for its size. The 1.25 had same color and inclusion of I-1, but I had to look VERY hard to find an inclusion, by eye, and I couldn't. But, my eye kept wandering over to the 1.52ct rated H and I-1 as well. However, you could see the inclusion by I-1, barely. And in most conditions, you could not see it easily at all.

Fast forward a week later, I brought it up to my fiancé about exchanging for the 1.25ct at the same price and she said no way. Oh, forgot to mention they were the same price. I mentioned to the worker there why. I said are you sure they are rated the same? she said yes, and I said then there is NO way they can cost the same. She then said (and attached) that the 1.52ct is an older diamond (2011). Perhaps others didn't want to buy an I-1 diamond, I don't know. However, it's very beautiful.

As for price, it was retailed at $7,599, and gave me 10%. I said that wasn't what I was expecting based upon other sales they had on 1ct rings. She said that was best they could do...unless perhaps you are in the military or a veteran. I just happen to be a veteran so I got another 10% off. Ultimately paid $6,119.00 for it, plus tax.

Ok, fast forward to a week ago. I called my insurance company to insure it. I said I have the receipts, blah blah blah. They said no go, we need an official appraisal. I'm like really? I'm guessing anyone could ring up a fake receipt? Anyway, I asked how much and why not included with diamond. Cost, plain and simple. And they wanted to charge me $150 and take a month to get ring back. Called KAys as well. $300!!! and a month as well. Called my insurance agent at that point to see if they really needed an appraisal. she then recommended a local place by me. $110. And best part, it only took two hours!!! Wow!

The "evaluation" that came with the ring was from GSA and included no cost to replace or whatever one might call a dollar figure associated with the ring. The place I took it, if you look at the bottom of page 2, appears to be a GIA appraiser? If so, from what Ive read online, they are the best of the best? It's interesting that they graded it the same which is good. I did my homework and time looking at diamonds that day. I don't think it's a reflection of GSA doing a good job (but I can't say), as many GSA diamonds that night were crap and I know they should have been rated more poorly.

Anyway, back to my diamond. I've heard appraisers tend to appraise a little high, but wondering if it is "THE" GIA, would they be more inline with realistic pricing? And is it possible that my diamond purchased for $6,119 really be worth $8,500?

Thanks!

 

[kenny]

There is no such thing as a "GIA Appraisal".

GIA produces grading reports when you send them a diamond.
The report never says anything about a price.

GIA also trains people.
A person with GIA's highest 'degree' is called a GG or Graduate Gemologist.

A GG from GIA can work for a store and write an appraisal, but GIA itself is not backing up that document in any way.
It is possible a GG could be a crook and just write what his/her employers directs, or be an independent appraiser.

Nothing this GG produces carries the weight of an actual grading report from GIA.

I would never buy a diamond over, say, $500 without a grading report from a reputable lab like GIA or AGS.
I don't trust any other document with my hard-earned money.
If GIA gives grades of G VS2 to a diamond other less-trusted labs might give the same diamond grades of E VVS2 or better.
An appraiser working for a diamond seller may also be under pressure to 'lie'.

 

[mjbennett9]

Hi Kenny,

This guy as a GG appraiser (see attachment). And while it may not mean a lot, I don't know, my insurance company Nationwide, recommended him. I guess I'm confused though. He is a GG from GIA, at least that's what is in the attached.

 

[kenny]

Hi Kenny,

This guy as a GG appraiser (see attachment). And while it may not mean a lot, I don't know, my insurance company Nationwide, recommended him. I guess I'm confused though. He is a GG from GIA, at least that's what is in the attached.

Yes he's a Graduate Gemologist trained by GIA.
That doesn't mean his word and product is the same as GIA's.

GIA does not appraise diamonds so what you have cannot be called a "GIA Appraisal".
He may be grading to GIA standards of color and clarity … or to his employer's standards of color and clarity.
GIA and AGS have the strictest grading standards; other labs often have more 'generous' standards that make a diamond 'seem' like a better deal.
It's not; it just has sloppy grades.

What your insurance company requires is whatever they require.
They may be making the mistake of calling it a GIA appraisal, as opposed to the more accurate "Appraisal by a GIA Graduate Gemologist".

This is not just semantics.
They are different products.

A GIA report is GIA's opinion, AKA God's opinion, virtually FACT, in the marketplace.
An appraisal by a GG is one individual's opinion.
GIA is independent but appraisers are not.

People with Ph.Ds from Harvard can become crooks too.
Harvard University can not vouch for everything their graduates do.
Neither can GIA.

 

[caldwa]

Hi Kenny,

This guy as a GG appraiser (see attachment). And while it may not mean a lot, I don't know, my insurance company Nationwide, recommended him. I guess I'm confused though. He is a GG from GIA, at least that's what is in the attached.

He's an appraiser that is a graduate of GIA's graduate gemologist program. GIA also produces reports on diamonds that are done by their staff. These are two different things. The person who appraised your diamond could not issue a report that would be backed by GIA.

It looks like that GSL produced a report on the diamond in 2011, similar to how GIA produces reports on diamonds (without commenting on the degree of similarity).

 

[denverappraiser]

FWIW, the GIA GG program is about gemstone identification and grading. Nothing else. They don't even teach a class in appraising. A GG or it's equivalent from an assortment of overseas schools, is a prerequisite for all the appraisal training programs I'm aware of but it's most definitely the same thing. That's the beginning of the program, not the end.

What your insurer wants is a full and complete description, with photographs, of the item you're hoping to insure along with a price that they can use as a budget for the replacement and a means for setting your premiums. They need this so that, in the case of a loss they can replace with 'like kind and quality', or words to that effect. Again, GIA doesn't do this and they don't even teach how to do it. There's is no such thing as a GIA appraiser or a GIA appraisal.

I'm a little surprised they have a problem with the sales receipt but it depends on how detailed a document your jeweler prepared. Some are pretty weak. For the most part, insurers are perfectly happy with weak documentation. It's YOU who should be picky. This document mostly protects your interests, not theirs.

Around here $300 for a one item appraisal would be decidedly on the high side but appraisers set their own rates and they vary quite a bit from one to the next. Shop it around. In the meantime, it sounds like I should be raising my prices.

 

[Dancing Fire]

Anyway, back to my diamond. I've heard appraisers tend to appraise a little high, but wondering if it is "THE" GIA, would they be more inline with realistic pricing? And is it possible that my diamond purchased for $6,119 really be worth $8,500?

Thanks!

No, impossible!...all the appraiser did was just copy the specs off the GSA card and charge you $110 for a 15 min job.

 

[heididdl]

yes and although you would want an independant appraisal, when you purchase a ring it should also be accompanied with an insurance appraisal with the purchase aside from just the receipt. This is why we stay away from chain stores. Sorry....and the stone is very good polish good symmetry so it is not an ideal cut stone. I am sure that an I1 has more visible inclusions than you think you see.

That being said you can buy a nice GIA or AGS certified stone in a lower color si2 but a more desirable cut.....Give us a budget and we will help you find a beautiful stone in your budget range.

 

[Diamond_Hawk]

By forum rules Neil is not permitted to self-promote. But I believe it’s within the rules for me to comment that he is far more skilled than the typical GG (some of whom went through at a time when cut was not even addressed) and has not only GIA GG credentials, but the CG and CGA diplomas from AGS, as well as the ICGA. Only around a couple dozen people in the world have it.

Say that to say: Trust his word on all of this. And for future readers, Neil’s lab does appraisals.

 

[mjbennett9]

Thank you everyone for all the great and informative feedback. I've learned a lot more. In the end, I guess as long as my future wife is happy with the diamond (as am I), it's all good. But, for a future anniversary upgrade, I'll have to be more discerning in my purchase. And, seek a seller that may provide a GIA report with the diamond (and for free). or ask for the report, before buying it. Clear sign of trouble is an "appraisal" or evaluation that includes a dollar amount. Good info everyone!

Kenny, after reading your info, I went back to the appraisal and it makes sense now about GG and GIA trained, and should not be a price, if from GIA (since should be a no money stated report). My appraisal from the GG states right on top of page one that it's for insurance purposes only. So, it's sort of a disclaimer right away.

I didn't post page 1 since I was doing with camera pix.

 

[denverappraiser]

Any statement of value must contain an element of what something is worth, to whom, when, and under what circumstances. Every proper appraisal will have a bit of language like that explaining what their value conclusion does and doesn’t mean. I, of course, haven’t a clue if this appraiser did a good job or not but this disclaimer is a good sign. Given the subject of this thread, it’s perhaps worth noting that he/she didn’t learn this at GIA by the way.

Is it possible that your item is ‘worth’ more than you paid? Yes. Actually it’s fairly typical, and it’s the reason for the disclaimer in the next sentence about how the report is not useful for comparison purposes. It has to do with the definition of value. The standard usually applied for insurance valuation is retail replacement new local. What would it cost to custom make a replacement at a local specialty retail jewelry merchant that meets or exceeds the specs? That’s chock full of slippery words but it makes a tremendous difference. Not only is this not the only definition of value available, it’s not even the intuitive one.

I’ll give an example. This is one of my pet peeves with the TV shopping channels. They’ll show a picture of a pretty girl with some butt ugly ring and a statement that your local jeweler probably doesn’t have one like it. True. So? They then point out that your local jeweler would charge you a lot of money to custom make one like it using locally sourced labor and materials. Also true. So? Many jewelers can’t or won’t do it at all. Yep. Lastly they point out that their Chinese sweatshop makes them in giant quantities for lot less money. There are only 500 left so you'd better order now. We may never buy these again. True again. So? Everything just said meets the FCC rules for truth in advertising. So what’s it ‘worth’? Retail replacement new local may very well be quite a bit if it’s not possible at replacement time to get the mass produced one. Many times. Is that evidence of a bargain on the TV? Absolutely not. Neither is it evidence of a ripoff at the local store.

For the most part I find the TV guys are selling what they claim and they charge more-or-less reasonable prices for it. That’s part of why they’re so successful. I have very little trouble with their merchandise. I’m insulted by some of their marketing and I’m calling them out on it but lots and lots of jewelers do this. Actually, the worst offenders are the non-jewelers like Costco and Walmart. I use the TV shows as examples because they’re so public about it. Anyone with cable TV can watch this day or night. So what’s the point of the ‘free’ appraisal report saying it’s worth vastly more than the selling price? It’s not about insurance, even though that’s what the report says. It’s not about telling if you got what you thought you got. The person who wrote that report has never seen the goods. They have NO IDEA if you got what you expected because they have no idea what you got. They also have no idea where you live, what your local stores charge, how the replacement would be done, and usually don’t include the necessary specs to replace it even if you wanted to. The elements to estimate retail replacement new locally simply aren’t there. It’s about convincing you that they gave you a bargain. It’s about encouraging you to use it for comparison purposes despite the specific disclosure in the report that says it’s not useful for this. That’s why it’s free. It’s for their benefit, not yours.

So why would an insurance company accept it when they know it's probably bs? They're not dumb after all. That’s a tad more complicated but it boils down to money. Doesn’t it always? Your premium is a direct percentage of the value conclusion but the replacement procedure has to do with the description. If the description is weak, it’s easier to replace. If the value is high, the premiums go up without changing the cost to replace. Of course they accept it. What’s not to like about THAT?

FWIW, in reading the above, you just learned more about appraisals and appraisal theory than what's in the entire GIA-GG program.

 

[mjbennett9]

That was a great explanation of how things work, deverappraiser--thank you. And excellent use of the TV examples.

 

[aljdewey]

MJ, I'd recommend that you consider sourcing insurance that agrees to a cash value payout instead of 'like kind replacement."

You have found an I1 stone that you can't see inclusions in, but if you experience a loss, they can replace it with any I1 diamond as "like kind", and that could include diamonds where the inclusion is more prominently seen.

I suspect that's also why they're pushing for an appraisal instead of your receipt - they can probably source an "H, I1" for less than $6K, and the less specific your appraisal details, the more $$ wiggle room they have.

Cash-out policies avoid that; if you have a loss, they pay the agreed-to amount and you can source the replacement stone. You do have to provide some verification of what you paid, but as long as you can do that, cash-outs are a better way to go generally.

 

[mjbennett9]

aljdewey,

You bring up a hugely controversial subject I'm sure. Which is good and I never thought about that! I just left a message for my insurance agent. I don't want them picking out my diamond when I spent hours picking out from a lot of similarly graded diamonds--many of which should have been labelled trash.

Thanks again!

 

[mjbennett9]

I did some quick net searching and you are right...good example here:

I used to frequent this site approximately four years ago when I was initially shopping for my wife’s engagement ring. Based on the advice I received, I purchased a GIA-certified 1.20 ct., F color, VS2, good/good with a 59% table and a 62% depth for a VERY good price through a jeweler friend of the family. Unfortunately, a couple of weeks ago my wife lost her engagement ring. Yes, she did actually lose it. In fact, she lost it out the window of her car when waving a car to pass her. After realizing it had fallen off her finger, she stopped her car immediately and walked into the middle of the road to look for it. She found the mangled setting with no stone, which means that someone’s tire became much more valuable.

We’re in the process of working through a claim with our insurance company. The replacement service provider is a master gemologist from our local area who has a strong reputation and personality to match. The first stone she showed us was considered a “betterment” (authorized by the insurance company). It was a GIA-certified 1.31 ct., very good/very good with a 58% table and 63% depth. I examined the stone under a loop and a microscope, but wasn’t pleased with what I saw. As a result, the gemologist suggested my wife and I contact our insurance company to check and see if we have enough coverage for an AGS triple-zero rated stone. She explained that GIA has softened its ratings in the last several years, which was apparent based on the GIA book’s statement that a 63% depth now qualifies as “excellent.”

Putting aside the foregoing advice for the moment, she also informed us that there is a “shortage” of high quality stones in the 1.25 to 1.5 ct. range due to De Beers restricting production. Those suppliers who have these stones in inventory are holding onto them until the economy recovers and are pushing lower quality stones (G, SI1, good/good) on buyers because they have more of these quality stones on hand. I checked with the jeweler who originally sold me the ring and he can’t confirm or deny what De Beers has and/or may be doing in regards to inventory. He has some high quality stones in inventory, but not many.

MJBennett9 - Note to self, looks like at least one commenter has noted GIA ranking/appraisal terms have slipped in recent years.?

 

[mjbennett9]

Here's the response from my insurance agent. My first take was you all here were and still are right. But where she says the part I bolded below, it would appear the insured is given sound say in the process?

This is a replacement cost policy, but it works like a home policy does. The maximum amount paid will be up to the insured value. However if we are able to replace the ring with the same like,kind, and quality for a lesser amount then Nationwide does have the right to do that. We just had a similar situation and Nationwide's jeweler was able to replace the ring for less than the appraised value. The insured was able to have their jeweler confirm this and match the same value we quoted. We do request you get the ring appraised every five years to make sure you are insuring it at the correct value.