Appraisal questions for the appraisers

[pfunk]

I just had my diamond appraised yesterday by a pricescope listed independent appraiser who shared with me that he has been in the business for 35 years. It was a very enjoyable experience and I am very glad I had it done. The appraiser was super nice and I was glad that he insisted upon not seeing the GIA certificate until after his assessment. Gave me immediate confidence that he was confident in his ability to evaluate the stone. I do, however, have a few questions.

First, some background on the stone. The link to the diamond is here: https://enchanteddiamonds.com/diamonds/view/R200-CLBVHD and the link to the GIA report is here: http://www.gia.edu/cs/Satellite?rep...ename=GIA/Dispatcher&c=Page&cid=1355954554547

1. The appraiser told me he was torn between H and I color but knowing how strict GIA was, he assessed it as an I color. He was very surprised when I told him it was GIA J. However, he said "I'm sticking with my assessment of I color". The appraisal therefore shows an I color diamond. Is this normal?

2. His numbers were also slightly different on the measurements. GIA had 35 CA, he assessed it as 34.5. GIA had a pavilion depth of 43%, he measured 43.7% but marked 43.5% on the appraisal. He also marked the table as 57% while the GIA report says 58%. He did say he measured it close to 57.5%, so maybe it is a difference in rounding? He appraised the girdle as medium, though he said it may be marked "slightly thick" by GIA, which indeed it was.

Will these differences have consequences? Either way it's a AGA/NAJA 1A grade overall, however with the appraiser the pavilion depth is the only 1B grade, but using GIA numbers the crown angle is the lone 1B grade.

3. Regarding the value assessment, he told me he was going to use an average of what the stone would go for at several of our local jewelery stores (he seemed to know their typical markup). He also had a book that he was looking at, which I assumed to be the rap prices perhaps? Anyway, his assessment of the value was about twice what I paid from an online vendor. I told him I paid considerably less than the value he gave me, so he then recalculated what he described as "wholesale" for the diamond. Even that value was about $4,000 more than what I paid. When he put a final $ value for the replacement value, he told me he would use the bottom dollar that he thought would safely cover me, as I had stated I didn't want a falsely high assessment that would increase insurance rates. This value was 1.5 times the amount I actually paid.

Does this seem to be too much of a cushion to safely cover me? I would be perfectly fine with going online again if something were to happen to the stone, and I can't believe it would be that hard to find a diamond similar to what I have? Should I ask him to reassess and give a replacement value closer inline with the online marketplace, or is that not smart?

If it matters, he did not have any sort of scanner for the assessment. He used a microscope, a loupe, and his master set of grading stones. He did clean the stone prior to the assessment and his clarity estimate was in line with GIA. I get long winded, so the questions are bolded. Thanks for any advice!

 

[denverappraiser]

Assuming this was an insurance replacement document, that’s not exactly the way I do it but I think I’m more of the outlier than him. It sounds like he did just fine.

I reference the GIA report directly. I even include a copy right in my report. I do independently grade the stone, and if my observations differ from GIA’s, we have a discussion about it right then and there. When it comes time to write the report, I’m writing what it will take to replace it with another of ‘like kind and quality’. That means another stone with a GIA pedigree with the same or better set of specs. If GIA called it a J, the replacement will need to be with a J, and the funding should be whatever’s appropriate to do that.

I don’t use the word ‘wholesale’. It’s too confusing to people.

A factor of 2 is a fairly high differential on a diamond. On mountings it’s pretty typical. The problem is that the replacement mounting may very well need to be custom made using US labor while the original was made in a mass production environment somewhere with cheaper workers. The result is that ‘like kind and quality’ for items that can’t be replaced from that same factory can get pretty pricey. Did he price it right in the end? That’s for him to decide. Make your case. He may not agree with you but he should be able to explain why not.

Nailed a crown angle to 0.5 degrees and the table to 0.5% with a microscope? I’m impressed, although again, I would have used the numbers off of the GIA unless I thought it was the wrong stone.

 

[luvdajules]

Hi OP, when I went to insure my stone last summer, I had the same issues regarding paid price and insurance replacement and not wanting to pay extra in premiums. My insurance carrier took my purchase receipt and appraisal replacement value and allowed me to select a coverage value I was comfortable with as long as it was a cushion higher than what I paid. I chose to go 25% more than what I paid, but I easily could have went with 50% more than what I paid from a ps online vendor.

 

[pfunk]

Thanks for the feedback. Everything was very helpful. Neil, if I may ask a few more questions of you. Excuse my naivity as this is the first time I have sought an appraisal on a stone.

1. If he submits the GIA report with his appraisal to the insurance, I assume the GIA report will be used in the event of a replacement? If he calls it an I, that won't end up mattering because GIA calls it a J, and that is what the insurance will use.

2. If he doesn't submit the GIA report with the appraisal, would I be at risk of the insurance company replacing it with a diamond graded by a different lab such as EGL? Or would they trust his appraisal enough to replace it with a GIA graded diamond cut to the specifications he has listed on his appraisal?

3. Should I provide him with images of the hearts and arrows that I have from the vendor? It is not H&A to the purist standards, but it is a very good pattern of equal sized hearts with equal space between the hearts and v's. The defect is clefts in the hearts due to longer LGFs. Will this have any impact in the event of a replacement?

4. I should have asked at the time, but perhaps his replacement values were based off his assessment of the I color. His replacement value still seem too high to me, but this may in fact be part of the discrepancy. However, even if he calls it an I color, I should not expect an I color replacement and therefore should not base the stones value off of his I color assessment. Correct?

 

[Rockdiamond]

From my perspective:
Value- it is definitely not in the consumers interest to "over-appraise" an item.
If you knew how to buy the stone online once, any subsequent purchase would be made the same way.
Therefore a B&M price which is substantially higher is not realistic, and will cost you money in premiums.

Grading: It's great to test one's eye against a GIA report.
Academic, but interesting.
If GIA called it a J, that's what it is.
In my opinion that's how the appraisal needs to be written to avoid confusion.
It's possible they will change the grade on a re-examination, but unlikely.
I have heard countless sob stories from cutters and dealers about how GIA wronged a given stone or dealer- yet at the end of the day the GIA grade is going to determine the price of the stone.

The difference in measurements is meaningless from a value standpoint as well.
I agree with Neil that guessing the crown angle and table size is impressive ( unless the stone was loose and he had a sarin machine)

 

[denverappraiser]

1. If he submits the GIA report with his appraisal to the insurance, I assume the GIA report will be used in the event of a replacement? If he calls it an I, that won't end up mattering because GIA calls it a J, and that is what the insurance will use.

Correct.

2. If he doesn't submit the GIA report with the appraisal, would I be at risk of the insurance company replacing it with a diamond graded by a different lab such as EGL? Or would they trust his appraisal enough to replace it with a GIA graded diamond cut to the specifications he has listed on his appraisal?

The insurance companies generally view the description portion of the appraisal as the purchase order for the replacement. They take that piece of the report, strip off the price, and submit it to various replacement jewelers who will give a bid to replace it with ‘like kind and quality’. Assuming the bid is below the declared value, they’re buy from whoever is cheapest. If the bids are over the declared value, they’ll cash out.

3. Should I provide him with images of the hearts and arrows that I have from the vendor? It is not H&A to the purist standards, but it is a very good pattern of equal sized hearts with equal space between the hearts and v's. The defect is clefts in the hearts due to longer LGFs. Will this have any impact in the event of a replacement?

I love including this sort of stuff but again, I’m a bit of an outlier. Will your insurer care? Maybe, maybe not. If it’s not in there they definitely will NOT be considered come replacement time. The general rule is that hey need to meet or exceed whatever specs are in there. Another general rule, by the way. If YOU can find it for significantly cheaper, chances are good that they can too. Insurance adjusters can be pretty skilled shoppers.

Obviously if he thinks the discrepancy is because it's a different stone, all of this changes.


4. I should have asked at the time, but perhaps his replacement values were based off his assessment of the I color. His replacement value still seem too high to me, but this may in fact be part of the discrepancy. However, even if he calls it an I color, I should not expect an I color replacement and therefore should not base the stones value off of his I color assessment. Correct?

It’s pretty likely he was using I color to replace if he called it an I in the report. I to J is a pretty important step. Talk to him about it. He’s seen the stone, I haven’t. He’s talked to you, I haven’t.

 

[pfunk]

1. If he submits the GIA report with his appraisal to the insurance, I assume the GIA report will be used in the event of a replacement? If he calls it an I, that won't end up mattering because GIA calls it a J, and that is what the insurance will use.

Correct.

2. If he doesn't submit the GIA report with the appraisal, would I be at risk of the insurance company replacing it with a diamond graded by a different lab such as EGL? Or would they trust his appraisal enough to replace it with a GIA graded diamond cut to the specifications he has listed on his appraisal?

The insurance companies generally view the description portion of the appraisal as the purchase order for the replacement. They take that piece of the report, strip off the price, and submit it to various replacement jewelers who will give a bid to replace it with ‘like kind and quality’. Assuming the bid is below the declared value, they’re buy from whoever is cheapest. If the bids are over the declared value, they’ll cash out.

3. Should I provide him with images of the hearts and arrows that I have from the vendor? It is not H&A to the purist standards, but it is a very good pattern of equal sized hearts with equal space between the hearts and v's. The defect is clefts in the hearts due to longer LGFs. Will this have any impact in the event of a replacement?

I love including this sort of stuff but again, I’m a bit of an outlier. Will your insurer care? Maybe, maybe not. If it’s not in there they definitely will NOT be considered come replacement time. The general rule is that hey need to meet or exceed whatever specs are in there. Another general rule, by the way. If YOU can find it for significantly cheaper, chances are good that they can too. Insurance adjusters can be pretty skilled shoppers.

Obviously if he thinks the discrepancy is because it's a different stone, all of this changes.


4. I should have asked at the time, but perhaps his replacement values were based off his assessment of the I color. His replacement value still seem too high to me, but this may in fact be part of the discrepancy. However, even if he calls it an I color, I should not expect an I color replacement and therefore should not base the stones value off of his I color assessment. Correct?

It’s pretty likely he was using I color to replace if he called it an I in the report. I to J is a pretty important step. Talk to him about it. He’s seen the stone, I haven’t. He’s talked to you, I haven’t.

Thanks so much for the info and for your time. Exactly what I was hoping to get here.