Appraisal price or sale price for insurance?

[Diamond_14]

Hi Everyone,

I am looking to get insurance and am a bit confused about the value. I spent $7,500 on the stone but the appraisal I got from the company I bought it from says its valued at $12,800. The insurance for $7500 would be $100 a year and the insurance of $12,800 would be $167.

I think I will used the $12,800 number but I just want to see if I am ripping myself off.

Thank you!

 

[Lookinagain]

What would the insurance pay should the stone be lost? Most policies will pay what the stone can be replaced for which in your case would probably be close to what you paid. You would need to know the terms of the policy to see if it would actually pay the appraised amount, regardless of what it costs to replace the stone. If it doesn't then there should be no reason to insure for the appraised amount.

 

[sledge]

I think sale price + about 20% is a good value. So about $9k. Reason being is that prices typically raise as time increases. Unless you have a loss very close to the original purchase date, that would give you a little fluff for inflation w/o overpaying for coverage the insurance company simply won't pay. Unless you have a very rare "cash replacement" policy; however, most are not.

The secondary issue being you probably need to revisit this evaluation every few years and adjust the policy coverage appropriately.

Lastly, I might add it's very important to provide as many intricate details as possible about your specific diamond. It can be very time consuming, difficult & more expensive to find a GIA 3X stone that is cut to the proportions & symmetry of an ideal stone than the typical 3X stone that isn't all that "excellent" at all.

If by chance, you purchased a BRANDED super ideal such as WF ACA, BGD Signature, etc. then including those details are equally important. Because now they can't just find any AGS000 stone, but rather they have to replace with a WF ACA (assuming you originally bought WF ACA). And while there may be some proportion variance/preference, the brand as a whole is rock solid and you would truly end up with an equal replacement.

 

[Dancing Fire]

Hi Everyone,

I am looking to get insurance and am a bit confused about the value. I spent $7,500 on the stone but the appraisal I got from the company I bought it from says its valued at $12,800. The insurance for $7500 would be $100 a year and the insurance of $12,800 would be $167.

If the stone was valued at $12,800 then they wouldn't sell it for $7,500. The "feel good" appraisal is just BS!

 

[Mreader]

I wouldn’t go by appraised. Depends on the policy but you can read what happened to me when my ring was stolen. (#23 in thread)

Jewelry Insurance Too Expensive?

Hello lovely PSers. I have a question about jewelry insurance and whether you all would get it in my case. My heirloom diamond was reset by Victor Canera. The center stone has been appraised to be around 3.35-3.7 cts, I color, VS2, slight blue florescence. The ring was stated on the appraisal to...

www.pricescope.com

 

[MamaBee]

My insurance company (USAA) won’t insure for the appraised amount. They insure for the sale amount. They wouldn’t even add the 20%. Most insurance companies replace the diamond themselves. Some companies cash out. I would call and ask them how they would handle a loss, damage, or theft.

 

[Wink]

Dear @Diamond_14,

Realistically, if a jeweler sells you a branded diamond for $10,000 that he can replace and sell again for $10,000 and writes you an appraisal for $15,000 to make you feel like you got a steal deal, he is not doing you any favors!

If a loss occurs, the insurance company will call him as the vendor of that branded diamond since you are entitled to a like kind replacement. They will pay him based on his cost and what they allow for a markup, and yes, they will demand to see invoices.

Since on line margins are very low, The insurance company might actually offer to pay him slightly more than the $10,000, but he should accept only the $10,000 that he would be willing to sell to you for. This means you have been paying for a $15,000 appraisal and will gain no benefit from doing so.

You should receive an appraisal for what it will cost if you were to buy it again today. You should also get an update to that appraisal when prices go up or down.

Wink

 

[Wink]

Wow, do not dawdle while replying to this question. I see several replies came in while I was writing...

Wink

 

[Diamond_14]

Thank you so much everyone for the thoughtful insights. I ended up insuring it at the $7500 price because the $12.8k price was going to require individualized underwriting and seems to be really high to me. I could replace the diamond for $7500 at least for the next year I believe. I asked the company if I could do like 10k but they said it either had to be the appraisal price or receipt price. I am not sure why that is but that's what I was told.

Once it is set I will update the price a bit to account for the setting.

 

[Wink]

Or have a truly qualified appraiser do a proper evaluation, not an overpriced one.

Wink

 

[oldminer]

As a long time appraiser I agree that making "feel good" appraisal reports is a disservice to the public even if they do "feel good" when they believe they did well on compared to the actual cost. The problem is that no expert knows in advance of research if you paid a bargain price, a regular retail price or even an inflated retail price.

People should discuss with their appraiser that they want a realistic value placed on their jewelry for insurance coverage. This allows the appraiser to provide their opinion of reasonable value for making a replacement without needlessly inflating it, or to discount it to an equally unrealistic low amount. Making an adjustment after giving my opinion is not usually a big problem. Appraisal values are expert opinions not set in stone.

I would rather be a few percent too high than a $1 too low. Consumers generally become quite upset when the appraiser comes up with a number even slightly less than what was paid. There needs to be a little cushion for peace of mind and the inflation we all know is happening and will continue to happen. Not a big cushion, but enough that both parties feel that the value given the day of the report has some accuracy and a bit of durability over time. How much time? No one can predict what inflation and events will unfold in the coming weeks, months and years.