Appraisal much higher than what we paid...???

[brightstone]

Wow....my boyfriend picked up my engagement ring today (YAY!!!!!....now I just have to be SOooo patient for him to ask the big question. I am super excited.

I also have a question because we got it (mounting and diamond) appraised and it came back to be valued (setting and diamond) at $12,000. However, my boyfriend paid $7300 for the diamond from JA and $2200 for the Varna setting. That means it was appraised $2500 more than what we paid. Are we just lucky, or does something seem off? Has this ever happened to anyone else?

Here are the specs on the diamond:
Price:$7,300
1.31 ct
Excellent cut
Color: E
Clarity: SI2
*Eye Clean*
Polish: Excellent
Symmetry: Excellent
Cutlet: None
Girdle: Thin
Florescence: Faint
Table: 55% / Depth: 61.5%
AGL Round Name: 4222 Weight: 1.306 ct (WHAT IS AGL??)
Diameter: 7.090mm (7.07mm-7.11mm) - 0.6% EX
Total Depth: 4.33mm – 61.1% EX
Table: 3.89mm – 55% EX
Crown: 34.5 angle (33.5 angle – 35.6) 15.7%
Pavillion: 40.7 angle (39.5 angle – 41.9 angle) - 42.7% EX
Cutlet: 0.4% - Very small EX s/u:49.51
Girdle: 1.41% (0.85% - 1.69%) Thin-Medium 0 EX
HCA Score = 1.0

 

[neatfreak]

It''s pretty normal that insurance valuations are way above retail price...

 

[brightstone]

Okay, thanks. I didn''t know that.

 

[brightstone]

...and I guess then my next question would be: why are they normally way above retail price?

 

[Lorelei]

Date: 9/22/2008 6:13:45 PM
Author: brightstone
...and I guess then my next question would be: why are they normally way above retail price?

This can be due to the '' feelgood'' factor, it is pretty common.

 

[denverappraiser]

Date: 9/23/2008 4:55:02 AM
Author: Lorelei

Date: 9/22/2008 6:13:45 PM

Author: brightstone

...and I guess then my next question would be: why are they normally way above retail price?

This can be due to the ' feelgood' factor, it is pretty common.

Exactly. I would add to this that it does you more harm than good to base an insurance policy on a seriously inflated appraisal. Your premiums will be based on a direct percentage of the declared value (the appraisal value) but the behavior in the case of a loss will not. The company is agreeing to replace with another ring of like kind and quality. They hire some pretty savvy shoppers who really do know what things cost and where to go to get them so there’s a pretty good chance that they can at least match the deal you got and possibly come in lower on this sort of goods. The result is that by submitting this appraisal you are increasing your premiums without changing the behavior of the insurance company at all. Not surprisingly, the insurance companies are thrilled with this process. It’s not the insurance companies who should be objecting, it’s the insureds.

Call up your appraiser and ask him/her to justify their value conclusion. If it's unreasonable, present your evidence and ask them to change it. They may or may not end up agreeing with you, but part of what you're paying them for is to help you understand what their numbers mean.

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

 

[brightstone]

Thanks. Hmmm....given that, am I correct in being concerned that the appraisal write-up mentioned nothing about **cut** in it''s description of the center diamond, but only mentioned that it was an SI2, E color. The GIA report doesn''t list a grade for cut, I think because the GIA report is from 2005 and the cut grades weren''t listed then?? Anyway, if you look at the table, depth, pavillion, crown angles on the specs I posted you can see it''s an excellent cut.

So, my next question is: if my ring gets lost and I have to replace it, does the insurance company give us the money and we are the ones doing the shopping for the new diamond and ring (I would ensure an excellent cut in the one I replace it with), OR does the insurance company find a comprable diamond and send it to us (sorry so inexperienced in this)? If the later, then I would be very worried that they would replace our diamond with one with a poor cut, since the appraisal only specifies color and clarity, not cut. I guess to solve this, the appraisal could be much more specific, listing the specs for the diamonds cut??

Thanks,
Brightie

 

[brightstone]

Also, technical question: I notice that when some people reposnd on pricescope, the body of another person''s post is in their reposnse/post, colored in blue, as if they are responding directly to that part. Is this just a cut and paste thing or is their a specific reply button I am not seeing, that you allows you to respond to someone in particular? Thanks again!

-Bright

 

[Richard Sherwood]

Your ring was appraised for only 26% more than you paid for it, and you bought it through one of the most reasonable dealers on the internet.

I wouldn''t call that an inflated appraisal. If you had bought that ring in the average retail environment you could have easily spent $2500 more for it than you did.

Appraisers don''t typically appraise at internet prices, but at retail prices. If you want something appraised at internet levels you have to let them know. I''m not sure I''d recommend it though, with the way diamonds have been increasing. Something you buy at internet pricing this year you might not be able to replace at the same price next year.

 

[denverappraiser]

Rich,

I didn't notice the prices. You're right, 26% over a discount Internet deal is not unreasonable.

Bright,

The insurance claims procedure depends on your insurance contract but in most cases it’s the latter. They will give you a list of ‘approved’ vendors to choose from, they will provide you with a ring and they’ll send the bill to the insurance company less your deductible if you have one. The description from the appraisal that you submit will become the purchase order. If you want something to be one of the specs for the replacement jeweler, it must be mentioned in this description or it will become the default, which is whatever is commercially typical. In the case of cut, that’s VG. Call up your appraiser and tell them your concerns. Tell them what you have to support your contention that it’s an excellent cut and, assuming that they agree with you, ask them to update the appraisal report to include this information.

Your insurance agent should be prepared to tell you how their company works this and tell you the various options available.

Some insurers, most notably Chubb, simply cut a check for the agreed value in the case of a loss. Their rates are generally higher than the ‘replacement’ type companies like www.jewelersmutual.com but this will vary by things like your zip code, claims history, etc. By all means get a bid from them. There’s a good agent at www.touchstoneinsurance.com who is licensed in all 50 states.

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

 

[denverappraiser]

Date: 9/23/2008 9:00:11 AM
Author: brightstone
Also, technical question: I notice that when some people reposnd on pricescope, the body of another person''s post is in their reposnse/post, colored in blue, as if they are responding directly to that part. Is this just a cut and paste thing or is their a specific reply button I am not seeing, that you allows you to respond to someone in particular? Thanks again!


-Bright

If you click the ‘reply’ button a new screen appears where you type your response. Near the top left of the box is a button titled ‘quote’ that makes the blue box and includes the text from whatever message you replied to.

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

 

[brightstone]

Thanks Rich and Neil. I agree with the fact that we did get a really good deal on the diamond, and the ones we saw in retail locations that were comprable were much higher in price.

However, we just insured with Jeweler''s Mutual, and it seems that given what Neil says, there IS room for potential loss in quality of a replacement diamond if we lose the ring and need to replace it (BECAUSE the appraisal doesn''t list anything about cut and the GIA report has no cut grade on it). If we adjust the appraisal to details specs of cut, that could solve that problem. I DO like the Chubb way of doing things, according to what you say...they just cut the check. I''ll try to get a quote from them today. For now, we already paid the year premium at Jeweler''s Mutual...I guess we''d have to wait until next year to go with Chubb.

Thanks guys....big help!

 

[denverappraiser]

I’m a long time JM customer and I’ve been very happy with them. Don't feel like you've been screwed by going with them. They will be happy to let you ‘update’ the appraisal if your appraiser wants to change something. I certainly agree that Chubb is a good outfit and I do like the contract better but when I shopped them for my own policy, Chubb was 3x the price so it’s not without tradeoffs. In the end I decided it would work better for me to have a strong appraisal directing the replacement and a cheaper premium.

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

 

[brightstone]

Thank you, thank you, thank you!!! Such good advice and am so glad I learned this, rather than sitting blissfully ignorant, happily grinning about the high appraisal we got. Now I am happily, wisely grinning

 

[brightstone]

Date: 9/23/2008 9:05:19 AM
Author: denverappraiser
Rich,

I didn''t notice the prices. You''re right, 26% over a discount Internet deal is not unreasonable.

Bright,

The insurance claims procedure depends on your insurance contract but in most cases it’s the latter. They will give you a list of ‘approved’ vendors to choose from, they will provide you with a ring and they’ll send the bill to the insurance company less your deductible if you have one. The description from the appraisal that you submit will become the purchase order. If you want something to be one of the specs for the replacement jeweler, it must be mentioned in this description or it will become the default, which is whatever is commercially typical. In the case of cut, that’s VG. Call up your appraiser and tell them your concerns. Tell them what you have to support your contention that it’s an excellent cut and, assuming that they agree with you, ask them to update the appraisal report to include this information.

Your insurance agent should be prepared to tell you how their company works this and tell you the various options available.

Some insurers, most notably Chubb, simply cut a check for the agreed value in the case of a loss. Their rates are generally higher than the ‘replacement’ type companies like www.jewelersmutual.com but this will vary by things like your zip code, claims history, etc. By all means get a bid from them. There’s a good agent at www.touchstoneinsurance.com who is licensed in all 50 states.

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

Hi Rich and others,

You said: The description from the appraisal that you submit will become the purchase order. If you want something to be one of the specs for the replacement jeweler, it must be mentioned in this description or it will become the default, which is whatever is commercially typical.

So, I called Jeweler''s Mutual and in talking the them learned that although my appraisal doesn''t have a typed description on it of anything about the cut of my diamond and only lists the color and clarity, it does have the GIA report # listed on the appraisal and that they can look up the GIA report online and get ALL the cut information.

So my next question is regarding what you said above: Since they are using the appraisal alone for the purchase order, does the fact that the GIA report number is listed on the appraisal take care of/become a substitute for a detailed cut description worded on the appraisal document itself? OR is what you said above literal in that the cut description must be spelled out on the appraisal to be included as part of the purchase order and the GIA report number listed on the appraisal won''t suffice to account for cut.

Phew! I hope I made sense there....

 

[brightstone]

Sorry...my last post was directed to Denverappraiser/Neil....I have one more follow up question, if you have the time (it''s posted above, in my last post). Thank you!