Having loose diamond appraised tomorrow...

[Sparkly_Girl]

What should we expect for insurance replacement value vs what we paid for the stone?

 

[Gypsy]

Why would they be different? If you bought it retail then the retail replacement is equivalent to what you paid in the first place. Anything over that is just 'feel good' padding that drives up your insurance costs.

 

[Sparkly_Girl]

Why would they be different? If you bought it retail then the retail replacement is equivalent to what you paid in the first place. Anything over that is just 'feel good' padding that drives up your insurance costs.

Well... I remember almost 20 years ago the diamond my xh gave me in my ering appraised at almost double what we paid for it. I have no idea why and in my very early 20's, it never occurred to me to ask. I'm just wondering if that wa snormal and what to expect for tomorrow's visit.

I'm guessing that the appraiser doesn't ask you what you paid for it, right? Or at least not until they've offered their expert opinion...

 

[Gypsy]

Why would they be different? If you bought it retail then the retail replacement is equivalent to what you paid in the first place. Anything over that is just 'feel good' padding that drives up your insurance costs.

Well... I remember almost 20 years ago the diamond my xh gave me in my ering appraised at almost double what we paid for it. I have no idea why and in my very early 20's, it never occurred to me to ask. I'm just wondering if that wa snormal and what to expect for tomorrow's visit.

I'm guessing that the appraiser doesn't ask you what you paid for it, right? Or at least not until they've offered their expert opinion...

If they inflate the appraisal values then they aren't a good appraiser. Slightly over what you paid (up to 15% over, IMO) is okay as it allows for possible inflation over a few years (most people don't get appraisals every year) but more than that is just padding and all it does is raise your insurance values. Your insurance will not overpay in the event of loss, so there is no purpose to the inflated values except to make you feel like you, falsely, got a "deal."

 

[Dreamer_D]

If you only want it for insurance then talk to the appraiser about how he will reach his valuation and tell him you do not want it inflated.

ETA: Depending on when you bought your diamond and where you bought it and how much you paid relative to the entire diamond market, the value that the appraiser gives you may or may not equal what you paid. The hope is to have an appraisal that is about equal to what it would cost you to replace your diamond from a similar source that you originally bought it from. Unfortunately, it has been my experience that appraisers are not all that great in general and my appraisals are always grossly inflated. So I usually do my own homework and know the retail value of my diamond before I go, then make sure the appraised value is not more than 20% over that amount.

 

[diamondseeker2006]

Agree with the others. Your diamond is worth exactly what you paid if you paid retail. If the diamond was a family stone or bought second hand, then of course a value needs to be determined. Those inflated values only benefit the insurance companies because if you lose your ring, they are going to pay a discounted amount to replace your stone and not pay the amount it is insured for (unless you have one of the rare cash out policies). I try to insure for the purchase price or maybe a little more. I would not use an inflated appraisal. I often use the sales receipt instead (along with diamond certificate).

 

[slg47]

I would look up what similar stones are being sold for today as a 'guide' to replacement value. Of course, replacement value also depends on where you are buying the stone...online/B&M/marketplace (large city? small city? etc...)

 

[John P]

In addition to the comments above, the kind of insurance policy you will have figures into the equation:

"Normal" homeowner's policies often stipulate that the insurer will go through their own agency to secure a "like-kind" replacement in case of damage or loss. If this is the case be sure to have the appraiser document everything thoroughly, including the grading lab used, the grades given in every category (including finish), the range of measurements such as table, depth and angles if you have a shape where angles are given, the exact metal, appx weight and all details of the setting, etc. These things will be very important to have documented - with your insurer and stored in a safe place - should you ever need to have the piece replaced by them.

Jewelry-specific policies cost a bit more but they permit you to use your own chosen jeweler for replacement. In such cases the insured-value becomes as important (or more) than the documented details. And if you have a specific cash-out policy the insured-value becomes key.

An appraisal is a valuation "snapshot" for X product in Y market at Z point in time. The same diamond ring costs more when purchased at a boutique in a Dubai Casino than it would purchased from Blue Nile with a coupon ~ and both figures may be quite different a year from now than they were last week... So what is "actual" replacement value? As the others have said; probably what you paid for it plus some cushion for inflation.

Your appraiser can put down any number that is reasonable. Hopefully your appraiser will explain the different valuations possible. I know one longtime Pricescope appraisers who provided four figures: First he'd give retail replacement value, or the average value he'd expect at a conservative B&M in his metropolitan area, intended for insurance. Then on a separate sheet he'd include estimates of prices in high retail, discount retail and expected internet pricing.

Bear in mind that diamond prices have historically risen over time. With this in mind it's a good idea to set yourself a calendar-reminder to revisit the figures on your policy every few years.

 

[LibbyLA]

Just a general comment about Jewelers Mutual. Every two years, they remind me to visit my jeweler to have him review the value of my jewelry based on current prices and make changes to my policy if it's appropriate. He has the gem and metal weights for each item in a database and plugs in current prices for everything to get updated values. Some years, I've needed to change my policy and some years, I haven't, but it's nice for me that they keep track and don't let me go more than two years without that reminder.

 

[John P]

JM is a top jewelry-specific insurer with a long, positive track record.

 

[blueiris]

And if you have a specific cash-out policy the insured-value becomes key.

What John said about the cash out policy is my situation. My jewelry items of higher value are itemized on my homeowners policy and with my company (Chubb), I have the option of replacing or receiving a check for the insured value. I've always liked this, even though it's more expensive, because the couple times I've lost jewelry and made a claim, I ended up not wanting to replace the particular items, but rather chose something different.

Chubb will also pay out something like up to 1.5x the insured value (for scheduled items) if they've increased in value over time - even if you're not insured for that higher value. This offers some peace of mind for me if I'm not quite on top of getting updated appraisals. Chubb also sends out periodic reminders that it would be a good idea to have itemized items reappraised due to increases in the market.

P.S. I don't work for Chubb!

 

[peachy4397]

There's no standard % variance between insured value and what you paid for it, since it depends on how good or bad of a price you got. My jeweler provided us with an "appraisal" that was 35% higher than my fiance paid for the engagement ring, but as we all know this is just marketing/fluff.

We had the ring independently appraised for insurance purposes, and the appraisal came in approx $1k (6%) lower than what he paid., which is pretty close.