DIAMOND NOT WORTH APPRAISED VALUE

[mksn33]

A friend bought a diamond engagement ring for $8000. It came with an appraisal for over $15,000. He insured the ring for $15,000. It was lost and my friend discovered the diamond ring was not really worth $15,000 at all. The insurance company would replace it, or pay what it would cost them to replace it, which was only $8900. Has this happened to you? Please email me at: [email protected]

 

[denverappraiser]

mksn33,

This happens often with inflated appraisals. Your friend actually made out pretty well. the insurance companies drive a pretty good bargain when they shop. If he bought for $8000 and the company needed to pay $8,900 to replace, I would take this to mean that he shopped extremely well. How much time has passed between the purchase and the loss?

Neil Beaty
Independent Appraisals in Denver

 

[JohnQuixote]

mksn33,

Yes, this is probably what was written in the contract. Many times the policy states that if you lose a piece of jewelry it will be replaced with one of "like kind and quality," or (as in your case) cash in the amount it would take them to replace it from a vendor of their choosing.

It sounds like he's doing well to get the $8900. However, if your friend's appraisal has descriptors in it (grading report info, designer setting info,"hearts & arrows" or brand name info if applicable, etc.) make sure the insurance company has priced the replacement apples for apples.

As with many agreements, it's important to know the terms before you enter into the contract... Insurance laws vary greatly between states and countries and the terms of policies vary greatly between companies, so tell your friend to be sure to read the entire contract next time. I'm sorry if that sounds like hindsight advice - but hopefully your friend will not be taken by surprise again.

 

[denverappraiser]

Not to sound self serving but this is one of the reasons to get an INEDPENDENT appraisal instead of relying on a vendor supplied report, even if the insurance company is willing to accept the latter.

Neil Beaty
Independent Appraisals in Denver

 

[zoobiedo]

Amen, Denver Appraiser.

 

[nicknomo]

I''m wondering, if you insure the stone for 15k you pay a higher rate. However, if the insured price is over inflated and they don''t pay, shouldn''t they need to give you back the extra insurance money you paid? I''m assuming they don''t, but that would seem like robbery to me. If they get the appraisal and they don''t think it''s accurate, then they shouldn''t let you ensure it for that much...

 

[moremoremore]

Exactly! People generally sound so satisfied with themselves when they say...Oh, my stone appraised for double. I want to say DUH! LOL...I actually asked an appraiser to keep it low. I don''t need to raise my premium for nothing!

 

[reena]

Date: 12/13/2004 8:44:47 PM
Author: moremoremore
Exactly! People generally sound so satisfied with themselves when they say...Oh, my stone appraised for double. I want to say DUH! LOL...I actually asked an appraiser to keep it low. I don''t need to raise my premium for nothing!

precisely! i have never understood that. over my insurance company''s vehement objection, i insisted on insuring my ring for the purchase price instead of the appraisal price. why? well, cause if i lose my ring, i''m looking to get enough $$$ back to REPLACE it. not to replace it and buy a set of studs, too. (of course i''ll raise the insured amount a bit every year to account for inflation etc.). i''m already paying enough $$$ every year in insurance premiums--why would i want to drive them up?

 

[jackson]

I submitted a sales slip until I could get the appraisal done...but need the appraisal also, since it gives dimensions, inclusions and their positions, etc. for possible identification...also cut factors and clarity, angle, etc...so that I get the same quality stone as well as size and color.....But I guess they would actually PAY what''s on the sales slip! The jeweler advised not to let the appraisor put the value too high...said his experience is that they give you what you paid for it...[$$)]

 

[moremoremore]

Well, the only thing Reena, is that I might reappraise yours in a year or two...only b/c the price will go up and you might only get what you piad. Mine is about 15% over what I paid I think.

 

[rosy]

What about those insurance companies such as Chubb that say they don''t require an appraisal for anything under $50,000.00? Does this mean that they charge higher premiums?

 

[reena]

agreed MMM.

rosy, you''re correct that chubb does not require an appraisal for items less than some high amount, perhaps $50k as you said. their premiums are certainly high, but i''m not sure whether not requiring an appraisal is the cause of that. i would guess their premiums are higher because they are one of the few companies that will cut you a check for the insured amount in the case of a loss, as opposed to replacing the lost item for you.

 

[rfath]

I had to laugh when I picked up my ring from the jeweler that had the setting made for me. They quite nicely included their ''independent'' appraisal... but missed a lot of pretty important information about the diamond itself in their paperwork (they *said* they inspected it prior to shipping it out). They knew that I''d gotten the stone online, but refused to believe that it was ideal (after all, only Lazare sells ideal diamonds!), so the price for the stone is the same as that for a regular, non-branded, traditional round stone.

Good thing I''d already taken it to an independent appraiser!