Diamond Pricing Question

[Regular Guy 28]

So I managed to get myself into a Wholesaler's office when purchasing a diamond for my would be engagement. I ended up with a round brilliant 1.31 F VS1 (only one small cloud near starlet), Excellent, polish, symmetry and cut, No fluorescence, no culet, girdle medium - slightly thick (faceted) 3.5%.

Proportions: 62.6 depth / 55 table / 35.5 crown angle / 16 crown height / 41 pavilion angle / 43 pavilion depth / 50 start length 80 lower half.

Came with a GIA Certificate and had a laser inscription registry.

I paid $9,500 (including tax) for the stone, did I really pay "wholesale" or was it just a very good retail price?

And, what is the "retail replacement value" of my engagement ring.

The ring itself is 2.2 mm thick, designed in platinum (PT950 / 50 iridium) total approximate side stone carat weight is .33 (8 on either side totaling 16 stones in (f-g)) designed from a novo with a 6 prong setting. Paid S1,150 including tax.

I want to insure the ring and don't want to pay a fortune on premiums beyond what I have to / should have to replace the ring if she loses it / has it stolen.

I looked at IDEX's SRP, but didn't know if that was accurate / over inflated / or undervalued given the fact that I have a "3 EX" stone. I'd love to believe that my ring appraises for double what I paid, who wouldn't, but I don't want to pay the premiums just to feel good about my purchase.

Any information from the informed public would be helpful, basically I just want to know, if I lost my ring, and needed a new one and they allowed me to walk into someplace and get a new ring, what's the amount I would have to get to replace it.

 

[Regular Guy]

So, who''s the real Regular Guy?

Date: 12/15/2009 8:07:08 PM
Author:Regular Guy 28

I paid $9,500 (including tax) for the stone, did I really pay ''wholesale'' or was it just a very good retail price?

Not sure about the wholesale or retail business, but I can tell you diamonds on this board tend to be more than competitively priced, and for a GIA diamond with those characteristics, you paid near the bottom of what is otherwise available, with costs tending to run $11K, give or take $2500.

 

[denverappraiser]

Hmm. Back when I went to business school, selling things one at a time to the end consumer was called ‘retailing’. As far as I know, this hasn’t changed so let’s call your dealer what he is, a retailer. This is true even if they are selling to other customers for resale and no matter what it says on the sign out front or on the guys business cards. One easy way to compare his prices is to look at similar offerings from other retailers who advertise here. The IDEX SRP is a travesty. Ignore it. Yes, that seems to be a nicely competitive price. It would likely be difficult to duplicate this deal.

You mentioned a desire to insure it but it’s not clear what you’re asking about. Most insurers will be happy to accept your sales documentation to bind a policy. You can also get it appraised and use that documentation to insure it at a higher policy limit if you wish. This will increase your ability to replace it with something comparable in the case of a loss, even if the insurer isn't able to find as good a deal for you. Is walking into a random store and paying the asking price really the way you would go about a replacement if the need were to arise? It's unlikely that this will be the procedure used by your insurer.

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

 

[Regular Guy 28]

Can either of you or anyone else for that matter give me some direction on insurance?

Who's good? What should I look out for?

Denver Appraiser:

Personally, not very fond of your condescending tone. I'm a little bit familiar with business schools having gone to HBS, a small school, perhaps you've heard of it?

That being said, this particular "wholesaler" does not do business with the public and doesn't have a storefront or sell diamonds on the internet. While the transaction was not a lot sale, and therefore does not merit a volume discount; they do not have a storefront or sell diamonds "retail." Consequently, they requested my reseller certificate to be sent over post transaction. I however, paid cash so let's just say that the reseller cert is "in the mail."

Which probably would lead one to ask, "how do you know that it's legit?"
I actually took a friend of mine who graduated from the GIA but doesn't really deal with diamonds that much anymore and wasn't able to duplicate the price I got here. We were able to match the GIA laser registry inscription on the girdle and showed me through his 30X loupe, so I know it's legit.

I would like to know, and maybe Gary H can comment on this; what insurance carrier is the best. How my my diamond would / should be insured for would be great to know as well. I don't want to insure the diamond for 20K when really all I had to do was insure it for 14K etc.

If someone would let me know that would be great. I simply don't want the overinflated figure that jewelers often give customers to make them feel good about their purchases and base my insurance premiums on that.

Thanks in advance to all who reply to this.

 

[denverappraiser]

I don’t mean to be crabby at you, my tone is directed towards the ‘wholesaler’. YOU are a retail customer and a member of the public. Both you and they know that. There’s nothing wrong with that, they can sell to whoever they wish, but this has become a standard practice of a majority of the jewelers who operate out of non-traditional locations and who claim to be wholesalers, importers, manufacturers, jobbers, cutters and miners etc. By selling to you they have given up any claim to being a wholesaler, at least with regard to that particular transaction. Whether or not they wish to be responsible for the sales taxes is between them, you and the state. This little ruse is not only common, in some markets like the diamond districts in many major cities, it’s typical, and it’s nearly always presented as some sort of evidence of low competitive prices. This is simply a false assumption. They may or may not be selling what they say and they may or may not have competitive prices for it. How they describe themselves, how they decorate their offices and even what deals they may or may not have with other customers are simply beside the point. Shoppers are wise to pay attention to the details of the deal at hand rather than to a claim of what is or is not a ‘wholesale’ transaction.

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

 

[quietforce]

Appraiser and Regular Guy - you're both right!

It sounds like RG got a great deal - rock bottom of what's available on the Internet and in those situations you don't get to see it beforehand.

But it's also true that a bunch of people call themselves "wholesalers" when they are really not - I just had an experience in the NYC diamond district exactly along those lines. I found several of his stones listed through bluenile and other internet outlets for up to 15% less.

But to answer your question... I just finally bought the ring (not through that guy, incidentally) and the store appraised it for about 20% above my cost. Since I bought it through a family friend's store, and I might not be able to get that deal again, I figured I was willing to pay to insure that much more value so if anything did happen it would be pretty easy to replace. I imagine - I don't know for sure - that you could go to an independent appraiser, explain your situation, and you could together arrive at an appraisal value that makes sense.

(There are links to good appraisers around the country somewhere on this site...)

As far as where to get it insured - do you have homeowners or renters insurance? I have renters insurance, I spoke to them and was able to get a rider to cover it for about $150 per year. (ring was a little less expensive than yours, but I live in NYC which I imagine jacks up rates a bit).

That's all I know. Hope it helps.

 

[Regular Guy 28]

So I had it appraised and they say it's worth 18K, (16 for the stone and 2 for the setting) Including the PT950 platinum setting it was set into (14 side stones in F-G color with total weight of .24 carats).

It kind of seems high considering I paid only 10,500 for the stone and custom setting. Please let me know what your thoughts are on this matter.

I wanna insure it and make sure that if something happens to it I'll be able to replace it with a fair amount of ease. On the other hand I don't wanna spend more in premiums than I have to.

Any help would be greatly appreciated in this matter.

Additionally, if someone asks, do you refer to the ring as 1.55 (total weight of diamonds on the ring) or as 1.31 (the center stone)?. What's the norm?

Love your feedback.

 

[Regular Guy]

Regular Guy #1 back at you...

BTW, when folks come on, the pattern of practice is for us to do our best to answer questions that are in play...that are being asked. That said....

Date: 12/20/2009 8:08:55 PM
Author: Regular Guy 28
So I had it appraised and they say it's worth 18K, (16 for the stone and 2 for the setting) Including the PT950 platinum setting it was set into (14 side stones in F-G color with total weight of .24 carats).

It kind of seems high considering I paid only 10,500 for the stone and custom setting. Please let me know what your thoughts are on this matter.

I wanna insure it and make sure that if something happens to it I'll be able to replace it with a fair amount of ease. On the other hand I don't wanna spend more in premiums than I have to.

Any help would be greatly appreciated in this matter.

Additionally, if someone asks, do you refer to the ring as 1.55 (total weight of diamonds on the ring) or as 1.31 (the center stone)?. What's the norm?

Love your feedback.

...I'm surprised you know enough to have asked for Garry H's advice, but for not having used the tool he created which most folks also know to make reference to on this site, here. I did use it after your first post, but...again....you didn't ask about it, and I wouldn't be surprised if the cash transaction may limit your options. But...those sort of options aren't obviously on your menu.

I would recommend either Jeweler's Mutual, or State Farm...the latter first if they'd deal with you for insurance alone. Frankly, if you have a homeowner's policy, or even renters, a rider to either of those would be fine, too.

The more fine question, of what to insure it for...is a good question I'll let others address. For my money, if you have a strong appraisal, you are protected, and should seek to insure if for what your receipt...the lower amount stipulates. But, you'll need to check with your insurer to see specifically what they will require, and what they'll do if a loss ensues. But...since JM and such are supposed to guarantee of replacement of like kind, it seems a good appraisal should insure you get that, and if the insurer accepts the receipt as proof of valuation, that lower cost, it seems to me, is what you should go with.

(Edited to add) but, upon further reflection:

a) probably to use the benefit of the appraisal, you'd have to include it's price, but...
b) the characteristics you both purchased it for, and received, are probably noted on the cert, so
c) if you can insure with both the receipt, and cert, that would probably be my recommendation...
d) unless there are other things specified on the appraisal you value, and would want to protect, in the case of seeking to replace for like kind. Generally, the appraisal amount is not way far from what we frequently see here. And, one more thing...
e) despite your stated interest in insuring for like kind, one other option is to insure for cash value, removing some of these issues, and you could do that with Chubb insurance. That can probably most easily be secured (by either receipt or appraisal, as you would prefer...probably receipt, including the separate receipt for the ring, because the reported minimum they go with for insurance is $12K) with Touchstone insurance. A google search would find them, as would searches for contemporary hits on them here.

Regards,