Date: 2/21/2007 1:09:35 PM
Author: denverappraiser
An appraiser must declare a valuation date for an appraisal to be useful. This makes sense because the value of things change over time. What’s it worth to whom, when and under what conditions are the questions that the appraisal report should be answering.
The situation you are discussing is not one of pre-dating, it’s one of post dating. The appraiser presumably inspected some or all of the components in advance and is writing a report that won’t become valid until some date in the future when the ring is actually assembled and actually delivered. This is dicey for both the appraiser and the insurance company. How, for example, do they know that the diamond and/or mounting weren’t damaged during the assembly process? The classic rule for appraisers is that you should appraise things for what they are, not what they might become. The exception to this comes into what’s known as hypothetical assumptions and these need to be prominently declared within the body of the appraisal. With the exception of the above, most insurance companies will not bind a policy based on such hypothetical assumptions as whether the piece actually exists.
I, of course, understand the objective. You would like to sell things and deliver them with sufficient paperwork to allow the buyers to insure them immediately without the need to visit your competition to get the thing appraised. That’s inconvenient to them and risky to you if they choose an incompetent appraiser. This is not impossible to do but the appraiser needs to write their report with a bit of care and to be especially careful to properly describe who examined what and when. They can, for example, examine some or all of the components in advance and have someone else take the final photos and do the final inspection. This is just fine, as long as it’s properly reported so that the reader properly understands who did what and can make a reasonable decision about whether to rely on the information contained in the report. The appraiser, meaning the person who assigned the value and who is signing the report, is legally responsible for the accuracy of the entire contents and they should choose their assistants accordingly. The person doing the inspection should also sign for their portion of the report.
It’s worth noting that meeting the minimum standards of the insurance companies is usually very easy. I think the companies are being a bit dumb to be so casual about paperwork but it’s the clients who should hold appraisers to higher standards. They’re they ones who are generally protected by a proper appraisal.
Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver