Crazy Appraisal!

[diamondseeker2006]

Get this. When I had my old diamond studs reset, the jeweler told me they were I clarity and worth about what I paid for them which was $2700. They were 1.5 ctw. and H color. Fast forward to PS and now I was not satisfied with uncertified stones of less than ideal cut, so I sold them to my mother about a month ago for $2000 so I could upgrade my studs. Tonight I get an email from my mother saying how pleased she was with the appraisal:

One pair 14K white gold diamond earrings set in basket mountings with push on backs. The
earrings contain one round brilliant cut diamond each. The diamonds are SI in clarity, H in color, and
weight approx. .75 carats each. The diamonds measure 5.95 x 3.45 and 5.85 x 3.49. They have good
cut and polish and are well matched. Replacement value: $7,537.00.

Now let''s say that this is double the value that they really are...then I STILL took too much of a loss on these earrings! Thankfully it''s my mother and I am happy for her, but I am totally NOT understanding how two different jewelers could value them so extremely differently. On the other hand, I am totally against her paying insurance based on this value! There aren''t any independent appraisers in her area that we know of.

 

[strmrdr]

thats a smokin dope price, paying insurance on that amount would be insane.

 

[diamondseeker2006]

That''s what I thought. But she just emailed me and said she has an $8000 diamond ring on the insurance and it is only $35 a year!!!

 

[RockDoc]

Date: 11/15/2006 10:34:55 PM
Author: diamondseeker2006
That''s what I thought. But she just emailed me and said she has an $8000 diamond ring on the insurance and it is only $35 a year!!!

I guess anything is possible. $ 35.00 per year as an insurance premium sounds abnormally low, but one needs to know what IS and is NOT covered in the policy. The key here is how does the company pay its claims under the terms written in the policy.


A lot depends on the crime rate in the zip code where she lives. It is possible, to get a premium this low, but the policy may have a big deductible, or maybe has limited coverages. There are some policies that are cheap out there, but they only cover provable theft. Mysterious dissapearance, damage or coverage out side the US may not be covered.

As for the appraisal on the earrings, if she lives in a very remote area where there is only one or two jewelers in town, and is sparsely populated, the retail price of SI-1 H color 1.50 total carat weight earrings may not be that far out of line. Remember the value for insurance coverage for replacement is to provide enough funding to make the replacement.

If the diamonds were graded by a non gemologist, (which appears to be the case, as there is no mention of how well or poorly they were cut) the appraisal value could be grossly overstated. Again it might not be.

Does either jeweler you went to have gemological and appraisal credentials, as well as the advanced equipment needed to be accurate and comprehensive ?

Rockdoc

 

[DBM]

style="WIDTH: 98.25%; HEIGHT: 150px">Date: 11/15/2006 10:06:12 PM
Author:diamondseeker2006
Get this. When I had my old diamond studs reset, the jeweler told me they were I clarity and worth about what I paid for them which was $2700. They were 1.5 ctw. and H color. Fast forward to PS and now I was not satisfied with uncertified stones of less than ideal cut, so I sold them to my mother about a month ago for $2000 so I could upgrade my studs. Tonight I get an email from my mother saying how pleased she was with the appraisal:

One pair 14K white gold diamond earrings set in basket mountings with push on backs. The
earrings contain one round brilliant cut diamond each. The diamonds are SI in clarity, H in color, and
weight approx. .75 carats each. The diamonds measure 5.95 x 3.45 and 5.85 x 3.49. They have good
cut and polish and are well matched. Replacement value: $7,537.00.

Now let''s say that this is double the value that they really are...then I STILL took too much of a loss on these earrings! Thankfully it''s my mother and I am happy for her, but I am totally NOT understanding how two different jewelers could value them so extremely differently. On the other hand, I am totally against her paying insurance based on this value! There aren''t any independent appraisers in her area that we know of.

Are you sure the first jeweler was telling you $2700 as an appraisal value for insurance?? could it be he was referring to how much he would offer you to buy them or how much he normally would sell them for. Appraisal values are always higher than the retail purchase price in my experience.

 

[diamondseeker2006]

Date: 11/15/2006 11:17:32 PM
Author: RockDoc

Date: 11/15/2006 10:34:55 PM
Author: diamondseeker2006
That''s what I thought. But she just emailed me and said she has an $8000 diamond ring on the insurance and it is only $35 a year!!!

I guess anything is possible. $ 35.00 per year as an insurance premium sounds abnormally low, but one needs to know what IS and is NOT covered in the policy. The key here is how does the company pay its claims under the terms written in the policy.


A lot depends on the crime rate in the zip code where she lives. It is possible, to get a premium this low, but the policy may have a big deductible, or maybe has limited coverages. There are some policies that are cheap out there, but they only cover provable theft. Mysterious dissapearance, damage or coverage out side the US may not be covered.

As for the appraisal on the earrings, if she lives in a very remote area where there is only one or two jewelers in town, and is sparsely populated, the retail price of SI-1 H color 1.50 total carat weight earrings may not be that far out of line. Remember the value for insurance coverage for replacement is to provide enough funding to make the replacement.

If the diamonds were graded by a non gemologist, (which appears to be the case, as there is no mention of how well or poorly they were cut) the appraisal value could be grossly overstated. Again it might not be.

Does either jeweler you went to have gemological and appraisal credentials, as well as the advanced equipment needed to be accurate and comprehensive ?

Rockdoc

I am not sure about the jewelers credentials. She lives in the capital city of a southern state, so it is not exactly remote. She had trouble finding someone to appraise them at all. But it is possible the insurance has a deductible or something. I''ll have to ask her about that. Thanks!

 

[diamondseeker2006]

Date: 11/16/2006 1:21:06 AM
Author: DBM

Are you sure the first jeweler was telling you $2700 as an appraisal value for insurance?? could it be he was referring to how much he would offer you to buy them or how much he normally would sell them for. Appraisal values are always higher than the retail purchase price in my experience.

That is how much we paid about 3 years ago, but it was a discount situation and not full retail. So I felt the price was good at the time. I just insured them with the sales receipt. I''d never buy uncertified diamonds again after finding PS, though. The thing that gets me is that I would not have sold them for as low as I did had the jeweler who reset them for me not led me to believe the value was still no more than we paid. And perhaps he is the one that was right. But it is expensive to get multiple appraisals. I just made a mistake selling them without getting a valid appraisal.

 

[DBM]

I wouldn''t beat yourself so much. I''ll let you in on a little secret -- there is no exact value for a diamond. It''s only a matter of what you have and who do you have that wants to buy it. Like everything else (real estate, stocks, etc) the value depends on the need and ability of the seller to sell his item and the need and availability of a buyer to buy his item. Maybe your studs selling in a retail booth could have been sold for $4000, but you''re not a retail jewelry booth so you have to discount.

In other words even if your studs were certified and you could clearly ascertain in the market what the going retail value is for them you still would of had to sell them at a high discount to any jeweler or wholesaler you''d approach (sometimes half the price). This is simply because no jeweler is going to buy from a regular person versus his primary supplier unless there''s something to sweeten the pot i.e. a chance to buy something that will be below his usual cost. otherwise he won''t bother. as for selling it another person yourself you again would have had to discount them alot i think. it may have been a little bit of loss but i wouldn''t beat yourself over it.

 

[denverappraiser]

The most important thing in an insurance type appraisal is the description, not the price. Read it like an insurance company will and ask this question. What will it cost to replace the following item and can it be done for less than $7537?

“One pair 14K white gold diamond earrings set in basket mountings with push on backs. The
earrings contain one round brilliant cut diamond each. The diamonds are SI in clarity, H in color, and
weight approx. .75 carats each. The diamonds measure 5.95 x 3.45 and 5.85 x 3.49. They have good
cut and polish.”

Let’s take it apart, you be the insurance adjuster. White gold basket mountings are easy enough. It’ll cost you about $100 to have a pair of studs built. Any jeweler can do it with very little trouble. It’s about the diamonds.

“one round brilliant cut diamond each” – no big problem here. No cut information provided beyond that it must be ‘round brilliant’ and ‘good’. For those who are familiar with the GIA cut grading scales, this isn’t an especially difficult standard to reach for.

“The diamonds are SI in clarity” – Read SI3 here.
“H in color” – ok
”weight approx. .75 carats each.” – Read 0.69-0.79 carats with a 1.50ct total weight.
“well matched” – ok
“5.95 x 3.45 and 5.85 x 3.49” – ok

Nothing hard so far, right? Now hit the database at the top of the page titled ‘pricescope your diamond’. Search for 0.70-0.80, SI3, G-H, round, no lab. This lands you at about $1500 each range, even if we accept at face value the grading. Note, what we’re searching for is not exactly what the PS vendors do particularly well with and there may be better places to look for this kind of goods but you get the idea. The insurance companies are very good at this process and, trust me, this is not a difficult call. Now let’s talk about the grading accuracy.

The insurance company must match with like kind and quality so they must use similar standards and scales in their replacement as the appraiser used. What’s the color? It’s not what you think. Some ‘expert’ with similar qualifications to the grader used must agree that the provided stones are an H. You don’t have to use GIA because the original grader wasn’t GIA. You don’t even have to use EGL. Go back to the appraisal and read the qualifications of the grader. Nothing there. Nada. A stone ‘certified’ by the Bupkis gemological lab and bait shop will be fine, so now we’re talking looking for misdescribed I-1, I’s if you really want to push the point. This'll drop your budget to more like $1200 per, maybe less. The PS database is definitely not the best place to be looking for this but they really aren’t that hard to find. (In practice, most insurance companies won’t go this far, they really are trying to make their clients happy so they’ll use EGL-Europe or some equivalent)

This description is actually better than about 90% of the jewelry appraisals out there and the value conclusion is either describing an awfully expensive marketplace or the description doesn’t include sufficient detail to justify it. You did give your mom a good deal but you didn’t undermine yourself in the process. You can both be happy.

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

 

[Regular Guy]

Neil,

A very helpful, and animated, review of the value of a good appraisal.

 

[FacetFire]

Just to ease your mind a bit, I''m look at buying a pair of studs, not ideal, 1.5 ctw, H , SI1-2, for $3400, retail (not expensive mall shop, discount, but retail nonetheless. So, no, I don''t think you you undervalued much. I''m selling my 1.3 ctw, G, SI1s back to my mom for $2000 too! How funny!

 

[diamondseeker2006]

Date: 11/16/2006 9:19:01 AM
Author: denverappraiser

The most important thing in an insurance type appraisal is the description, not the price. Read it like an insurance company will and ask this question. What will it cost to replace the following item and can it be done for less than $7537?

“One pair 14K white gold diamond earrings set in basket mountings with push on backs. The
earrings contain one round brilliant cut diamond each. The diamonds are SI in clarity, H in color, and
weight approx. .75 carats each. The diamonds measure 5.95 x 3.45 and 5.85 x 3.49. They have good
cut and polish and are.”

Let’s take it apart, you be the insurance adjuster. White gold basket mountings are easy enough. It’ll cost you about $100 to have a pair of studs built. Any jeweler can do it with very little trouble. It’s about the diamonds.

“one round brilliant cut diamond each” – no big problem here. No cut information provided beyond that it must be ‘round brilliant’ and ‘good’. For those who are familiar with the GIA cut grading scales, this isn’t an especially difficult standard to reach for.

“The diamonds are SI in clarity” – Read SI3 here.
“H in color” – ok
”weight approx. .75 carats each.” – Read 0.69-0.79 carats with a 1.50ct total weight.
“well matched” – ok
“5.95 x 3.45 and 5.85 x 3.49” – ok

Nothing hard so far, right? Now hit the database at the top of the page titled ‘pricescope your diamond’. Search for 0.70-0.80, SI3, G-H, round, no lab. This lands you at about $1500 each range, even if we accept at face value the grading. Note, what we’re searching for is not exactly what the PS vendors do particularly well with and there may be better places to look for this kind of goods but you get the idea. The insurance companies are very good at this process and, trust me, this is not a difficult call. Now let’s talk about the grading accuracy.

The insurance company must match with like kind and quality so they must use similar standards and scales in their replacement as the appraiser used. What’s the color? It’s not what you think. Some ‘expert’ with similar qualifications to the grader used must agree that the provided stones are an H. You don’t have to use GIA because the original grader wasn’t GIA. You don’t even have to use EGL. Go back to the appraisal and read the qualifications of the grader. Nothing there. Nada. A stone ‘certified’ by the Bupkis gemological lab and bait shop will be fine, so now we’re talking looking for misdescribed I-1, I’s if you really want to push the point. This''ll drop your budget to more like $1200 per, maybe less. The PS database is definitely not the best place to be looking for this but they really aren’t that hard to find. (In practice, most insurance companies won’t go this far, they really are trying to make their clients happy so they’ll use EGL-Europe or some equivalent)

This description is actually better than about 90% of the jewelry appraisals out there and the value conclusion is either describing an awfully expensive marketplace or the description doesn’t include sufficient detail to justify it. You did give your mom a good deal but you didn’t undermine yourself in the process. You can both be happy.

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

Neil, has anyone told you yet today that you are wonderful?

Thank you for this detailed analysis! I really appreciate it and realize that if you or some of the other PS appraisers were nearby, we wouldn''t have all this confusion!

My mother is taking them to another appraiser tomorrow. It is at one of the oldest, best jewelers in the city and they have a qualified appraiser coming in and doing the appraisals once a month, and tomorrow is the day. She had already made the appointment when the other jeweler said they could do it sooner, so she still has this opportunity tomorrow. This one at least includes photos, so that will be good. This should be very interesting to get a second opinion. The one thing that has been constant in this is that everyone has confirmed H color. I''m at least glad of that! I''ll report back as to the results of this one!

 

[diamondseeker2006]

Date: 11/16/2006 10:48:25 AM
Author: FacetFire
Just to ease your mind a bit, I''m look at buying a pair of studs, not ideal, 1.5 ctw, H , SI1-2, for $3400, retail (not expensive mall shop, discount, but retail nonetheless. So, no, I don''t think you you undervalued much. I''m selling my 1.3 ctw, G, SI1s back to my mom for $2000 too! How funny!

What a funny coincidence! That pair is almost identical to what I am getting and you''re selling your old ones to your mom for the same amount I did!

My mother is offering to give me mine back if I was misled on the value. But what I may do is let her keep them but give her the money back and she can just leave them to my daughter. We''ll see. Maybe the appraisal will be much lower and I''ll feel better about the whole thing!

 

[Modified Brilliant]

This description is actually better than about 90% of the jewelry appraisals out there and the value conclusion is either describing an awfully expensive marketplace or the description doesn’t include sufficient detail to justify it.
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Very true Neil. And those awful hand written form style appraisals are the worst

www.metrojewelryappraisers.com

 

[diamondseeker2006]

Just wanted to give an update. My mother took the earrings to a real certified gemologist appraiser today and he did a more thorough appraisal. It was too long for her to want to retype it in an email, but it was much more detailed than the other one. He said they were I color and I1 in clarity but said some other positive things about the stones. Replacement value $5800.

From other inflated insurance appraisals I have, this also appears to be at least a 33% mark-up over what one would really pay for full retail. So I guess that's a little closer to being accurate. And it would also be in line with what I paid 3 years ago allowing for some increase in price. I think it's okay to use this appraisal since her jewelry rider insurance is very low.

 

[TCBug]

Please don''t beat yourself up over this. Even if those stones are worth a zillion dollars, you sold them to your momma -- and I tend to think that if she''s like most mothers I know: (1) she''s invested soooo much blood, sweat, tears (and money) into raising you that it''s not really a drop in the universal bucket; and (2) you''ll probably get them back in her will (or before).

 

[diamondseeker2006]

Date: 11/17/2006 9:06:02 PM
Author: TCBug
Please don''t beat yourself up over this. Even if those stones are worth a zillion dollars, you sold them to your momma -- and I tend to think that if she''s like most mothers I know: (1) she''s invested soooo much blood, sweat, tears (and money) into raising you that it''s not really a drop in the universal bucket; and (2) you''ll probably get them back in her will (or before).

Lol! Yes to #1, most definitely. But #2 was the issue because her intent was to leave them to one of my sisters. I am happy to give a valuable gift to my mother, but I was feeling a little funny for that gift to then go to my sister instead of to one of my daughters. However, a gift is a gift (over the amount she paid me...$2000), so she can really do whatever she wants. I''m just not going to worry about it and be thankful I got something out of the earrings to put toward some new ones!

 

[TCBug]

Gottcha! I can''t say I''d be "thrilled" if one of my siblings (I love them dearly, I swear) got such a windfalll either! : )