22,000 for a 1ct diamond....huh? sounds fishy! Getting my new ring appraised?

[SandraPaneczko]

Hi there,

I stumped across a jewelry store with 70% off store wide, I guess it was a closing out sale. I thought I would go in and see if I could find myself a deal. Anyways I found a pretty E ring. GIA cert, I color SI clarity. They claimed the original price was 22,000 and the new price was around 6,000 after markdown. I asked the girl if anybody had actually bought that ring for 22,000 and she said yes. I think he was not telling the truth a 1CT at tiffany is about 12-14,000 for VS clarity(at least) and they are just a local jewelry store. I just thought I would share my story.

I have a question. My diamond was appraised before I took it out of the original setting and put into the new one. The man that I bought my new setting from told me to just have the appraiser update my papers for USAA. well.. when I went to them I was told that they guy who put the diamond in the new setting is suppose to do the new appraisal or the insurance company wont take it. Is this true?
Thanks

 

[arjunajane]

Sandra, I'm afraid the only person to ask your appraisal question is your Ins. Co. Every Insurer will have slightly different rulings and underwriting guidelines, there is no way of knowing.
Although that said, it sounds like what you were told doesn't make sense - your appraiser told you your jeweller must do the new appraisal? Or your Ins. Co did? I'm not sure if I understand..

I would ask to speak to someone else at your insurer.

As to that sale - well, it really speaks for itself doesn't it,..

*yawn*

I hope you get your insurance figured out

 

[Deelight]

The reason the diamond is 22k is so that it can be marked down to 6k in the "sale" happens all the time

 

[beach]

The I SI for 6000 is not really a sale either....

 

[denverappraiser]

Your insurer will take almost anything that includes a description of the piece and a price that’s at least high enough to allow them to replace it in the case of a loss. It’s not the insurance company’s standards that are difficult to meet, it’s yours, and I would be most concerned about getting the job done properly rather than how to get it done for free.

Most insurance policies, including the standard policy from USAA, are offering to replace a lost diamond with another of ‘like kind and quality’ in the case of a loss. What this means is that instead of writing you a check for the bottom line value of the policy in the case of a loss, they are going to buy you another diamond to replace it. The description in the appraisal that you submit will become the purchase order for that replacement. As long as the cost is lower than your policy limit and the claim is otherwise valid then they pay the lower amount. This difference is important because the big insurers have enormous buying power and full time professional shoppers to buy for them. They’re quite good at it. In USAA’s case they actually own a jewelry store that they use for this purpose so that they can keep their prices down. If you can buy it for $6000 on ‘sale’, there’s a pretty good chance they can buy it for that or less.

Who cares? You should. Let’s look at some numbers. You buy a ring for $6000 with an ‘appraisal’ for $22,000 and submit that appraisal to the insurer. Your premium will be based on that $22k number. Depending on your zip code and type of policy, the premium is usually going to be about 1.5% of your declared value so you’re going to pay $330/year for this policy. Now, what happens if you lose it? The insurer goes shopping and they find a replacement for $6k, you get a new diamond and you are made whole again. No harm, no foul. Where’s the loss?

Let’s look at the same scenario but with an appraisal for $7k. Same diamond, same insurer, same replacement. This time the premiums will cost you about $100/year. The claims procedure will be the same and the replacement stone will still cost the same so the only real change is that you’ve saved $230/per year on your premiums. You’re still fully covered and you still have an inflation buffer. That’s spending money for nothing and it makes for a terribly expensive ‘free’ appraisal.

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

 

[ImpatientOne]

USAA will either take your sales receipt, appraisal docs from the jewelery store, or an appraisal from an independant apparaiser. I would give them the whatever paperwork you have that has the most details about your stone. Just as an FYI, they will replace your with a like item if it is lost, stolen or damaged.

 

[jewelerman]

Date: 12/2/2008 4:57:42 AM
Author:SandraPaneczko
Hi there,

I stumped across a jewelry store with 70% off store wide, I guess it was a closing out sale. I thought I would go in and see if I could find myself a deal. Anyways I found a pretty E ring. GIA cert, I color SI clarity. They claimed the original price was 22,000 and the new price was around 6,000 after markdown. I asked the girl if anybody had actually bought that ring for 22,000 and she said yes. I think he was not telling the truth a 1CT at tiffany is about 12-14,000 for VS clarity(at least) and they are just a local jewelry store. I just thought I would share my story.

I have a question. My diamond was appraised before I took it out of the original setting and put into the new one. The man that I bought my new setting from told me to just have the appraiser update my papers for USAA. well.. when I went to them I was told that they guy who put the diamond in the new setting is suppose to do the new appraisal or the insurance company wont take it. Is this true?
Thanks

Welcome to the world of fake sales promotions....usually advirtised and promoted by chain department stores (Macys,Mervyns,Kohls are big offenders) that sell commercial grade jewelry and diamonds.These type of sales/advirtising/promotions became popular about 20 years ago. Im surprised that the jewelry buying public believes that a store would mark down jewelry 60-70%off plus extra percent off coupons(with the costs of heavy newspaper and telivision advirtising)and not mark up their prices up to$22,000 a carat for an average quality diamond.The buyer still pays heavy retail for the jewelry after deductions,the quality is usually poor and wont wear well over a long period without repair and the buyer is left with an inflated appraisal and insurance costs.As always...buyer beware.