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buying a salvage stone - what should I expect to pay?

Xanthoria

Rough_Rock
Joined
Mar 7, 2011
Messages
44
My diamond got chipped. Waaah. Insurance company have been great but offered 2 options:

1. Cash out value of the stone (MUCH less than it was appraised for - lesson learned in appraisal ripoffs) or
2. Have stone replaced for same value as cash.

OK, well such is life... but the stone that got chipped was great grandma's and there's sentimental value here, and I am supposed to leave it to my niece in my will. I asked if I can buy back the salvage stone, and they said yes - I will have the opportunity to match the highest bid after it has gone to auction. In other words, AFTER I have selected choice 1 or 2, above.

My question is: how can I determine how much that might be? Can I ask an appraiser now for a valuation? Do these auctioned stones go for a good amount? Or is it total roulette?

Pertinent facts: it's an E-F color round 2.14ct with a chip on the girdle... the big question is will the recut reduce it below 2cts? One jeweler who is popular on this forum who saw it confidently said no, another was not sure.

I will choose option 1 if I can reasonably buy back the stone, recut and reset it, then have some over for some stud earrings perhaps? Add to my niece's inheritance one day, that sort of thing.

Otherwise I'll go for option 2 and a new stone and save some time/hassle.
 

RaiKai

Brilliant_Rock
Joined
Mar 8, 2010
Messages
1,255
How bad is the chip? Is a recut - by you - totally out of the running here? Then you get to keep the stone, and the sentimental value, and pass it down and not deal with risk of being able to buy it at auction and so on. I assume it is an old cut, but there are cutters familiar with old cuts to do the recut. That is the option I would seriously consider myself but it all depends on how much "value" you place on sentimentality and the fact it has been passed down to you.

ETA: I looked at your past post about this where jeweler gave option to recut but it would cost $2200 with deductible...my question is are you able to not go through the insurance company and have you looked at cost to recut on your own? That cost seems a lot higher than a recut but I am not as familiar as others are in that area...

I too wonder what they are offering you as cash out?
 

yssie

Super_Ideal_Rock
Premium
Joined
Aug 14, 2009
Messages
20,561
Cash out value of the stone (MUCH less than it was appraised for

Are they offering the value of the stone before or after chip? I'd expect before - is that amount still hugely different from what's on your appraisal?
How are they determining that value? Presumably you paid premiums on the appraised amount - what would a pre-chip "like kind and quality" cost, can you do a bit of your own comparison shopping?
 

denverappraiser

Ideal_Rock
Trade
Joined
Jul 21, 2004
Messages
8,751
If they call the stone a total loss, the company owns the salvage. Normally they will be interested in selling it to recover some of their money and they make it available to salvage companies and possibly the replacement jeweler you are working with. If you tell your agent that you're interested in it, they'll give you right of first refusal. That is to say, the salvage people will bid whatever they want and you get to meet that at the 11th hour. Talk to your agent or adjuster about it and they should be able to explain the procedure for your particular company.
 

denverappraiser

Ideal_Rock
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Jul 21, 2004
Messages
8,751
The normal way they decide the value of a claim is to take the description and photographs from the appraisal and ask their vendors how much they would charge to replace with like kind and quality and go with whoever is cheapest. If that's less than the maximum limit of the policy, that's the number. That's why it's so important to have a well written appraisal that documents exactly what you have. The description and pictures are more important at claims time than the value conclusion. Some will give you a lot of flexibility on who the vendors are, others are very tied into particular sources. Each company is a little different and your agent should be prepared to explain how it works with your particular policy.
 

diamondseeker2006

Super_Ideal_Rock
Premium
Joined
Jan 11, 2006
Messages
55,633
I would take the cash just because I would want control over what I bought. I am not sure anyone can tell you what the bid might be on the chipped stone, and that would be the dilemma. Technically the stone should be worth less with the chip, so you should be able to buy it back.

Who gave you the recut quote? Did the jewelers that looked at it for recut purposes tell you what they thought the stone was worth?
 

denverappraiser

Ideal_Rock
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Jul 21, 2004
Messages
8,751
By the way, recut evaluations are not easy. I haven't a clue who the jewelers you're talking to are, but the vast majority haven't a clue how to do it. They don't teach it at GIA and most jewelers have very little experience in this area. At the very least it requires inspecting the stone in person and unmounted to give anything like a useful estimation, and even that is subject to change.
 

oldminer

Ideal_Rock
Trade
Joined
Sep 3, 2000
Messages
6,378
Posting a few magnified photo of the diamond here may be useful. There are many choices in recutting a diamond. SOmetimes very little weight loss is incurred if the chip is gone after with less regard to symmetry. This is a "repair" process rather than a more full "recut" process. Many chips on diamonds well over 2ct such as yours can retain 2ct+ in weight if "repaired" with a goal of keeping the 2ct weight.

You need to keep in mind that the sentimental value of this particular diamond may be greater than the perfection of the recut or repair job that can, or should, be done. Maybe I can be of assistance. A good sized part of my career has been spent with older cuts, their recuts and repair strategies and what can be accomplished. You might not want to even put in an isnurance claim beyond the cost of repairing the existing diamond. If that costs the insurance folks less money than replacing the diamond, they will probably approve your lower cost plan.
 

Karl_K

Ideal_Rock
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Aug 4, 2008
Messages
9,516
I would contact Neil or Dave off board to be honest.
As far as jewelers who post/ are recommended on PS while they are an awesome bunch they are for the most part not recut experts with a few notable exceptions.

Pulling the claim or submitting a repair claim may be a better strategy.
 

Xanthoria

Rough_Rock
Joined
Mar 7, 2011
Messages
44
Yssie|1461718047|4023984 said:
Cash out value of the stone (MUCH less than it was appraised for

Are they offering the value of the stone before or after chip? I'd expect before - is that amount still hugely different from what's on your appraisal?
How are they determining that value? Presumably you paid premiums on the appraised amount - what would a pre-chip "like kind and quality" cost, can you do a bit of your own comparison shopping?
The diamond was appraised (and insured) for what I now learn is about twice it's value - apparently this is a common tactic of some jewelers who try to make a diamond seem more valuable to sell it (ie "I'll sell you this appraised-for-$10k stone for $5k") even though I received it as an heirloom.

The insurance company, to whom I have been paying for a policy for $60k, says they will pay out $35k which is what the pre-chip diamond SHOULD have been insured for. The $35k is based on the new appraisal by one of their jewelers who they made me take the stone to, and that does appear to be the going rate for a stone like this.

(The question why they can't refund the hundreds I have been paying for insurance on a diamond that was not as valuable as initially thought remains... but anyway... apparently this tactic is normal and accepted in the jewelry industry?)

To answer another question, the insurer specifically said that I cannot have the stone re cut at my own expense and re-insured for a lesser amount. They said "people are always unhappy with the results" so my only options are cash out, or replacement stone. I don't know if I can withdraw my claim.

What I'd love to know is what salvage stones go for in case I can buy it back after cash out.
 

ringo865

Ideal_Rock
Premium
Joined
Feb 14, 2014
Messages
2,369
I'm wondering why you can't just say I don't wish to make this claim. Then, go get it recut/repaired and keep it. You can get a different policy for the new product,at the new appraised value, just not thru them. I'd guess they'd probably want to get 60-80% of the payout on the buy back. AND isn't that AFTER it goes to bidders then you can outbid them? Wtf
 

denverappraiser

Ideal_Rock
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Jul 21, 2004
Messages
8,751
They should be happy, or at least willing, to tell you what the high bid is on the salvage and give you the opportunity to match it. Ask. This is not an unusual request, if for no reason than the sentimental nature of the product. How much the dealers bid includes a lot of variables that you haven’t provided and probably can’t. Fundamentally it will be what they think the final stone will sell for to a store, less the cost of the repairs, less the cost of the lab fees and shipping, less some profit.

The insurance policy is for a maximum limit of liability, not the expected amount of a loss. This is one of the reasons why they ask YOU to provide the valuation rather than just doing it themselves in the first place. They hire professional shoppers and they really do know what stuff costs. You asked for a high limit and they agreed to it. Unfortunately, there are a lot of unqualified appraisers out there who don’t even know the right questions to ask, much less how to work with the answers. There are a lot of different definitions of "value" and the heart of your irritation is confusion between two of the. Some don’t ask any questions at all. I agree, customer, and jewelers, routinely misunderstand what appraisal values mean and don’t mean, even when it’s spelled out in the report itself.
 

Xanthoria

Rough_Rock
Joined
Mar 7, 2011
Messages
44
Update on this tale.

Backstory: I chipped the diamond in my ring appraised "for insurance" for about $60k

Sent it in and they appraised the value at about $35k for the stone. Cue "learning pains" on my part.

They offered the option for me to buy back the salvage stone so I could recut and reset. Price was under $8k!

They paid out the difference between their appraised value and the salvage, which I received back and is at the jeweler being recut, hopefully only losing a few points and retaining a size over 2ct.

All in all I'm delighted, and now I get to reappraise and re-insure the ring for a much more realistic amount. Win!
 

tyty333

Super_Ideal_Rock
Premium
Joined
Dec 17, 2008
Messages
21,683
Xanthoria|1471541057|4067353 said:
Update on this tale.

Backstory: I chipped the diamond in my ring appraised "for insurance" for about $60k

Sent it in and they appraised the value at about $35k for the stone. Cue "learning pains" on my part.

They offered the option for me to buy back the salvage stone so I could recut and reset. Price was under $8k!

They paid out the difference between their appraised value and the salvage, which I received back and is at the jeweler being recut, hopefully only losing a few points and retaining a size over 2ct.

All in all I'm delighted, and now I get to reappraise and re-insure the ring for a much more realistic amount. Win!

That's great! Turning lemon into lemonade! Please come back and post pictures of the recut...I'm glad you had a fairly happy
ending!
 

Lovesparklesparle

Shiny_Rock
Joined
Jun 9, 2017
Messages
495
Posting a few magnified photo of the diamond here may be useful. There are many choices in recutting a diamond. SOmetimes very little weight loss is incurred if the chip is gone after with less regard to symmetry. This is a "repair" process rather than a more full "recut" process. Many chips on diamonds well over 2ct such as yours can retain 2ct+ in weight if "repaired" with a goal of keeping the 2ct weight.

You need to keep in mind that the sentimental value of this particular diamond may be greater than the perfection of the recut or repair job that can, or should, be done. Maybe I can be of assistance. A good sized part of my career has been spent with older cuts, their recuts and repair strategies and what can be accomplished. You might not want to even put in an isnurance claim beyond the cost of repairing the existing diamond. If that costs the insurance folks less money than replacing the diamond, they will probably approve your lower cost plan.


Hello oldminer,
Is tere a way I can pm/contact you for advice re an old cut stone please?

Thanks
 
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