Current value vs. 2000 value

[KMC94618]

I am getting my wife''s engagement ring re-appraised for insurance purposes. The basic specs are .74 carat, round cut, G color, VS1, good proportion and very good symmetry. I bought it in March 2000 from a family friend for

$4000-5000 (I cannot remember exactly), and it was appraised at that time at about $9000. I am now being told that its appraisal value is closer to approx. $4,500. I am just curious if the market has changed that much since 2000 (e.g., if demand was much greater then), or if one of these appraisals is wildly off base.

 

[newenglandgemlab]

Hi,

No question in my mind that the $9,000 appraised value was used as a selling tool. The current appraisal is much more in line. The unfortunate part of this is that you got to pay premiums on a very inflated amount over a period of years. That adds up! I would bring this up with who you purchased it from. It is very poor policy. It should have been appraised for the purchase price or so documented at time of purchase. Cindy

 

[valeria101]

There was no diamond price bubble involved (maybe a small one, eheu!), but your story is not about market fluctuations: it is about the usual relationship between appraisal value, purchase cost and current market value. It is not unusual to have a ring appraised for twice the market value (which, by the way, did not really change). This is what happened. Your friend gave you a reasonable price, but no discounts Ok, this (purely personal) opinion is taking into account the stone as you describe, and a very mainstream setting: if any of these details are different (say, premium cut, and some out of the ordinary setting), then those would have added to the market value of the ring on top of what you have paid.... I guess.

PS: The above post was added while I was writing mine ! there is some overlap... but the (post) above is said with much more authority than I.

 

[newenglandgemlab]

Why should a ring appraise for twice the market value? Makes no sense to me unless the appraiser is working for the seller. hmmmm Cindy

 

[rocks]

$4500 is a generous appraisal for a .74ct gvs1, even if it is a certified ideal cut/ sarin 0 (ags). since your insurance premium is based upon appraised value, you really do not want an inflated or retail appraisal. your appraisal should reflect the true replacement value of the stone plus a small premium for appreciation.

 

[Mara]

Yes the $9k was wildly overinflated....sometimes appraisers tend to inflate appraisals. You feel like you got a stellar deal, and in some stores the stone MAY even be that overpriced. But in reality, the best appraisal is the one that is closest to what you paid, if it was a realistic amount. Because that is the same $$ you could get that stone again for if you went in and bought it all over. There's no purpose in paying insurance on a $9k appraisal on a stone that you could go buy right now for $4-5k. What will happen is that the insurance company, should the ring ever be lost or stolen, will just replace the stone with a similar one, to the best of their ability (or pay you out sometimes), which will *definitely* be at a lower price than the $9k. So you get jipped, unless you get that check for $9k.




We pay insurance for very slightly over what we paid. Chubb will only cut us a check. We know we can replace the stone with that $$ and I'd probably want to upgrade anyway.

 

[newenglandgemlab]

You rock, Rocks! I like your train of thought, Cindy

 

[spicolicpa]

LOL....conspiracy theorists unite!