How accurate are appraisals???

[SalanG]

I haven''t been around for a few months so I finally just got the e-ring appraised.

I paid $1,750 for a ritani eternity setting, .25 ct weight and $4,300 for a JamesAllen 1.02ct, vs2, h, excellent everything.

Went to independant appraiser and it was appraised at $11,000.


Does this seem high or did I just get a great deal!

 

[stone-cold11]

Normally it is on the high side, appraisal is based on the selling price of local BM. Did you tell him it is bought online? Also, tell him it is for insurance, or you will be paying a lot more for the insurance premium.

 

[denverappraiser]

An appraisal is an estimate of value for a particular item, in a particular marketplace and on a particular date. All those qualifiers are important. The one of those that seems to cause people confusion is the issue of marketplace. As Stone-Cold points out, the default market being described is often what it would cost to custom make a similar new piece at a high end local retailer. This is possibly interesting, and may even be what you need, but it’s not unusual that a production piece from a discount source costs quite a bit less than that. It’s worth noting that if you use this for insurance purposes, the standard agreement from insurance companies is that they will replace the piece with another of ‘like kind and quality’ or words to that effect in the case of a loss. They specifically are NOT agreeing to write you a check for the bottom line value conclusion on the appraisal that you submit. They hire skilled professional shoppers to buy these things and beat up the jewelers in advance to drive down their costs. At the same time, your premium is going to be a direct percentage of your declared value. The result is that an inflated appraisal may make you feel good but it’s really doing no favors because it drives up your insurance premiums without changing their behavior in the case of a loss one iota.

To answer your question in the headline, your appraisal may be entirely accurate (or not) but it also may be the correct answer to the wrong question. If you're not sure, talk to your appraiser about it. Part of what you're paying them for is to communicate their findings to you clearly but part of the onus of that is on you to ask the right questions.


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

 

[Regular Guy]

Neil, what''s the net outcome take away from your analysis, in terms of describing any different results that would be possible in...say...coming to visit you? (Sorry, you''re likely to have answered this not less than a dozen times, but probably I''m thick).

My appraiser near DC, I think, could have heard different info from me until I was blue in the face, but regardless, based on my engaging him, I believe he was going to give me one appraisal amount, regardless of what I told him in terms of my needs.

Will you vary the "number" at the bottom, based on your understanding of circumstances? I understand you may describe the basis for the number in very accurate ways.

BTW, warm regards,

 

[denverappraiser]

Date: 9/11/2009 12:47:06 PM
Author: Regular Guy

Will you vary the 'number' at the bottom, based on your understanding of circumstances? I understand you may describe the basis for the number in very accurate ways.

Absolutely. Any statement of value must contain an element of what it’s worth to whom, when and under what circumstances. The expected budget to have a duplicate made new at retail is a completely different question than what it would be expected to cost in a neighborhood store, which is a completely different question than what it would be expected to cost at a discount internet vendor which is completely different from what a consumer could be expected to realize on resale or how much they could deduct from their taxes if they donated it to charity. All are valid questions mind you, and each could be described as the 'value' in it's own context. This holds true for all property by the way, not just jewelry buy the way.

Every appraisal I do starts with a interview with the client both explaining the above and making sure that I understand what they are trying to learn that brought them in. The correct answer to the wrong question is doing the client no favors.

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

 

[Todd Gray]

In my experience, most jewelry appraisers base the value of the item being appraised on what they feel it would be sold for in the local market... If there is a Ritani dealer in your area, the appraiser most likely based the value on what they felt the local Ritani dealer would have charged for an item of that quality. The reality is that none of the internet vendors are charging mark-ups anywhere close to those imposed by the traditional brick and mortar retail business model - so of course you got a great deal

 

[SalanG]

I told the appraiser it was for insurance purposes.

It doesn''t seem ethical to appraise at a different value based on what the appraisal is being done for. If it was a donation, I could be overstating my charitable contribution, lowering my taxable income. If it were for insurance I could try and rip off the insurance company depending if it were beneficial to be higher or lower.

In the end the insurance will be between .1-1.2% of the appraised value. If I choose a policy with a deductible I can insure for anything under the appraised value.

 

[denverappraiser]

Date: 9/11/2009 5:13:50 PM
Author: SalanG
I told the appraiser it was for insurance purposes.


It doesn't seem ethical to appraise at a different value based on what the appraisal is being done for. If it was a donation, I could be overstating my charitable contribution, lowering my taxable income. If it were for insurance I could try and rip off the insurance company depending if it were beneficial to be higher or lower.


In the end the insurance will be between .1-1.2% of the appraised value. If I choose a policy with a deductible I can insure for anything under the appraised value.

It’s unethical not to.

The IRS clearly defines the value definition they will accept for charitable contributions (and it’s not the same definition used by appraisers for estimating the replacement cost new at retail).

The very reason the insurance companies prefer to replace with like kind and quality instead of writing you a check for the final value is precisely because appraisers are all over the map in their estimations of what things should cost. It works better for them to use the appraisal for the description and let the price be set by a competitive bidding process.

I’ll try to give a non-jewelry example. What’s a hot dog ‘worth’? It costs one thing at the grocery, another at the ballpark and still another at the cart out on the street. It’s the same Hebrew National dog. Is this evidence of a bargain at the grocer when other grocers may be cheaper still? Is it evidence of a ripoff going on at the game? You’re under no obligation to buy one after all. What about the 7-11 where it’s less than the one at the park but more than the guy on the street? If you bought one, how much could you expect to get for it on resale? If you ‘appraise’ a dog and declare it to be worth $3 because that’s what the guy on the street wants, what has the client learned with this information taken out of context? If he was heading to the dogwallah and wanted to know what to expect it's possibly helpful but what if he really wanted to know which grocer to use? That becomes a terribly misleading piece of information, even though it’s true.

I can't speak for your appraiser in addressing how they came by their value conclusion but they should be prepared to explain it to you. Read all of that fine print in the appraisal report and if that doesn't answer your questions, ask 'em. Communicating with you about their findings is part of what you paid them for.

Most insurers require you to either use the transaction price or the full value from an appraisal but this will vary from one company to the next. Your agent should be able to help explain what the rules are for their own company. That's part of what THEY get paid for.

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

 

[Richard Sherwood]

Then you''ve got those synthetic turkey dogs masquerading as real hot dogs.

Oy Vey!

 

[Modified Brilliant]

Neil is enjoying some Rocky Mountain high hot dogs tonight while Richard is just plain chillin
with all natural turkey stuffed hot dogs.
All this hot dog talk is making me yearn for a high sodium Fenway Frank.
Oy vey to that!

www.metrojewelryappraisers.com

 

[haagen_dazs]

very interesting thread
newbie questions
1) how do insurance companies insure the diamonds?
2)Do they request for the certification so that they can replace the diamond for a similar diamond ?
3)What if the diamond does not have a certification?
4)If insurance companies are not basing it on the appraised value, why do insurance companies need the appraised value in the first place?
5)I wonder (after doing one''s homework) if people get an appraised value lower than what they bought the diamond for.... lol

 

[stone-cold11]

Date: 9/12/2009 2:10:31 AM
Author: haagen_dazs
very interesting thread

newbie questions

1) how do insurance companies insure the diamonds?

2)Do they request for the certification so that they can replace the diamond for a similar diamond ?

3)What if the diamond does not have a certification?

4)If insurance companies are not basing it on the appraised value, why do insurance companies need the appraised value in the first place?

5)I wonder (after doing one''s homework) if people get an appraised value lower than what they bought the diamond for.... lol

1) Not sure what you mean by that.

2), 3) you send them as much information as you have if their replacement policy is a replacement in kind type. There is a cash out policy too, I think by Chubb, but I think that is more expensive.

4) They are basing it on appraised value and charging you for it. Depends on their replacement policy, cash out will be more cut and dry. Replacement in kind, there could be more wriggle room for them to make $$ as if they found a cheaper stone that is similar... So the more information you give them, the less wriggle room they have to say that is a similar stone.

5) Possible, but you will likely get a very upset customer...

 

[denverappraiser]

Your insurer is requiring an appraisal for a variety of reasons that are not likely to be the same as yours.

1) It provides a 3rd party statement that the item actually exists, at least as of the date of the inspection.

2) It provides a statement of the condition, again as of the date of the inspection. They wish to avoid claims for pre-existing damage or claims that result from inherent defects in the product.

3) It provides a description of ‘like kind and quality’ for purposes of replacement.

4) It puts a 3rd party (the appraiser) legally on the hook with you if they want to go to the mat over the above.

5) It provides a basis for setting their premiums.

6) It sets the upper limit of liability for the policy.

Notice that none of these are really a function of what the item is ‘worth’ in any particular market. That is to say, it doesn’t really matter to them if you got a good ‘deal’ on your purchase. Buy what you want, from whoever you want and pay whatever you want. It’s not their job to assess the merits of your chosen merchant or of your transaction. What IS their job is to decide if they will agree to replace the item with another one that meets your description in the case of a loss in exchange for some premiums based on the declared value that YOU submit. Inflated values are in their best interest. They get to charge higher premiums for the same coverage while retaining plausibility deniability. After all, it was YOUR chosen exert who provided the information.

In nearly every case, the policy is agreeing to insure a piece of jewelry, not just a diamond. Grading reports on the components are definitely useful to them when they are available but they don't serve the same purposes as an appraisal.

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

 

[Modified Brilliant]

Date: 9/12/2009 8:30:20 AM
Author: denverappraiser
Your insurer is requiring an appraisal for a variety of reasons that are not likely to be the same as yours.

1) It provides a 3rd party statement that the item actually exists, at least as of the date of the inspection.

2) It provides a statement of the condition, again as of the date of the inspection. They wish to avoid claims for pre-existing damage or claims that result from inherent defects in the product.

3) It provides a description of ‘like kind and quality’ for purposes of replacement.

4) It puts a 3rd party (the appraiser) legally on the hook with you if they want to go to the mat over the above.

5) It provides a basis for setting their premiums.

6) It sets the upper limit of liability for the policy.

Notice that none of these are really a function of what the item is ‘worth’ in any particular market. That is to say, it doesn’t really matter to them if you got a good ‘deal’ on your purchase. Buy what you want, from whoever you want and pay whatever you want. It’s not their job to assess the merits of your chosen merchant or of your transaction. What IS their job is to decide if they will agree to replace the item with another one that meets your description in the case of a loss in exchange for some premiums based on the declared value that YOU submit. Inflated values are in their best interest. They get to charge higher premiums for the same coverage while retaining plausibility deniability. After all, it was YOUR chosen exert who provided the information.

In nearly every case, the policy is agreeing to insure a piece of jewelry, not just a diamond. Grading reports on the components are definitely useful to them when they are available but they don''t serve the same purposes as an appraisal.

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

Thanks again Neil for providing a clear and precise explanation.
In my real world of professional appraising, thankfully the trend that I have noticed for the past several years:

Consumers are not as impressed and are not "falling for" inflated values (also known as a "great deal") by the sellers.

Consumers want an unbiased and comprehensive appraisal documenting the specifics of their item in case of loss or theft.

Consumers are more interested in learning about the different types of coverage and how insurance companies work.

Consumers, however, for the most part, are still unsure about the "Valuation" component and often believe that the insurance
company will pay them the value stated on the appraisal. This is the critical role that appraisers must play in explaining the
insurance process. It''s been a long slow journey, but we are educating the public. It''s our obligation. Who else will do it?

So, consumers are making progress in understanding jewelry appraisals and little by little, the offenders (sellers) who write
highly inflated appraisals will eventually be a thing of the past. Hopefully. One can always hope.

www.metrojewelryappraisers.com

 

[SalanG]

"Consumers want an unbiased and comprehensive appraisal documenting the specifics of their item in case of loss or theft."

This is exactly what I want. I think an appraised value should be one set price and not matter what the appraisal is for.

Hot Dog at the ball park has a premium because there is no other option leading yo a higher mark up and it also includes overhead costs.

At the market the hot dog is raw, has to be cooked, you need rolls, condiments etc.

I don''t think you can compare diamonds to hot dogs. If I went out mined my own diamonds, cut them, set them and wore them, then I could see a comparison.

So back to the main question, based on the info on the ring, is the value overstated?

 

[Modified Brilliant]

It''s just not that simple to answer your question.
I believe a few months back there was a thread on "levels" of retail prices. Richard and I both agreed at the time.
There is of course "internet pricing" which is usually lower or close to "low retail."
There is "median" or "average" retail.
There is high retail where you are paying for the store/designer name.
I am constantly monitoring the retail market and adjusting values accordingly.
We are in a difficult economic environment where brick and mortar sales are down significantly
and any price is negotiable. Any valuation methods that were used in the past by appraisers
may need adjustment to suit the current conditions.
I always have a discussion with my clients regarding value, purchase price, and levels of pricing.
When broken down and explained, it all makes sense.
Now to answer your question...your appraised value appears to be based on median to high retail.
It is a conservative approach but not totally unreasonable.

www.metrojewelryappraisers.com

 

[denverappraiser]

Date: 9/12/2009 11:17:50 AM
Author: SalanG
'Consumers want an unbiased and comprehensive appraisal documenting the specifics of their item in case of loss or theft.'


This is exactly what I want. I think an appraised value should be one set price and not matter what the appraisal is for.


Hot Dog at the ball park has a premium because there is no other option leading yo a higher mark up and it also includes overhead costs.


At the market the hot dog is raw, has to be cooked, you need rolls, condiments etc.


I don't think you can compare diamonds to hot dogs. If I went out mined my own diamonds, cut them, set them and wore them, then I could see a comparison.


So back to the main question, based on the info on the ring, is the value overstated?

To be sure a dog at the ballpark contains some value added characteristics over the one on the street but I think you’re missing the point. I’m not trying to be obtuse and I’ll try again because I think it’s an important concept:

What is this TV ‘worth’?

Amazon.com will sell it to you right now for $2518.98 with free shipping. That’s a good number to go by. But wait, there’s a $200 rebate available at the moment so maybe that should be considered. That would mean that today it’s ‘worth’ $2318.98. Any shopper (and any insurer) who was considering buying one surely would be considering that but is it really worth more the day after the coupon expires?

The MSRP from Panasonic is $3199.95. That’s another reasonable number to go by.

Chances are good that there are local vendors who will also be happy to sell you one for somewhere between those two numbers or possibly at a premium for their added services, taxes etc. It wouldn't surprise me if some folks need to put out something like $3500 to actually get one. That's another pretty good basis for deciding what it's worth.

That’s the exact same item for 3 different prices, all of which are correct in their own context. Context is everything. The same is true of diamonds. One straightforward answer is that your ring is worth whatever you paid for it, especially if the selling dealer is prepared to sell another like it for the same price if you asked. It’s an academic question whether some other dealer might be willing to sell you one like it for more, less or the same price. Another answer is to take whatever the Ritani MSRP is for the mounting, add to it the asking price of a diamond like yours at a hypothetical high end jeweler, add the cost of setting labor and call it done (This is likely to be what your appraiser did). Both can be correct and there are other approaches between the two. Your appraiser has actually seen the merchandise, he/she has had the opportunity to discuss the issue with you and he/she has presumably researched the appropriate marketplace in coming up with their conclusion. I can’t answer if they are right without doing all of those things and since you selected them for their expertise and you’ve already paid them to do this for you it seems like they are the appropriate place to go with questions about their methodology or their conclusions. If you don’t trust your appraiser for whatever reason, take it up with them and if you still can’t come to an answer you trust, find another appraiser.


Perhaps others here can explain valuation theory more clearly than I. In the meantime I’m going to go shopping and get a hot dog at the Costco food court ($1.50 for a dog and a soda. Boo yah)

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

 

[tap02150]

haha cosco has good hot dogs.. but thanks for the post

It makes complete sense to me now that you describe it. This might be going out on a limb. But i want to insure my whiteflash ACA princess diamond. Is there a specific way i should go about doing this so that if anything happened to that diamond, I could replace it with another ACA princess from whiteflash? I don''t want them to try and replace it with something else. I would want something similar in light return.. not just clarity, size, color..even just AGS 0 (which it is). I want a similar light return by looking at the ASET.

Is the only way to do this go through Chubbs? where they cut you a check for the amount appraised?

Or can i have it described in my insurance policy that it be replaced with another whiteflash aca of similar light return? I''m just trying to figure this out before i go to an appraiser.

Thanks guys,

-Ted

 

[kenny]

I'll never forget when I bought my first diamond.
I think it cost $2000.
It came with an appraisal that said it is actually worth $3000, or maybe it was $4000.

At first I was so excited.
I was so proud of myself for being such a smart shopper.
Then as I learned more I became mad about it.

Now I just don't give any credence to appraisals and I don't care.
It is an unfortunate reality of the diamond market.

I don't blame the appraisers.
They have to follow the absurd conventions of their industry or their numbers will be very different from the competition and they'll go out of business.

Oh well.

Imagine Kenny's Apprasial Service:
What did you pay for it? $2000?
Okay then it's worth $2000.
I'd go bankrupt fast.

 

[Modified Brilliant]

Neil, while you''re at Costco could you check to see if there is a large padlock on the mustard dispenser?
Our local Costco locks their dispenser. Tough crowd.

www.metrojewelryappraisers.com

 

[Regular Guy]

Third time. I wrote one long response and lost it (and by the way...did you know WF now offers JM and not Touchstone?).

In the process of re-engineering the first response into a second, I realized I''m no longer sure what I think...or rather...I''ve sort of changed from Neil''s position to Salan''s...but on a somewhat different premise...or maybe not. My renewed effort goes back to an old argument of mine.

Neil...let''s bring back ethics, and assume that everything goes to actuals. It ACTUALLY matters what choices the appraisee makes (that is, the one going to you, the appraiser).

Let''s assume the insurer is standard, and you do know their practices. Your client is the appraisee...and yet, you don''t want to be sued by the insurance company. You know the insurance company''s practices for replacement (and you do allude to this above).

Presuming Salan, or anybody will be insuring themself for "like kind," why does it matter where the appraisee makes their purchase? Let''s say they either paid a "smart" price, or instead...paid an inflated price at a mall store. Shouldn''t you at least offer them the opportunity to pay an insurance amount based on the conservative assessment an insurance company would actually incur, relative to their own "actual" cost structure, independent of the markup the shopper did incur? Yes, in your conversation with the buyer, you can give the appropriate back story...you got great service, and that''s why you may be satisfied for me to give you an appraisal with a price consistent with that store, but by the way, a cost at 1/2 the amount would also be reasonable for me to provide to you, mindful of what the insurer will be required to do if they need to replace your diamond (this, in the case of the buyer really paying an inflated price)?

I suppose this analysis moves the picture back to standard pricing, and away from customized pricing, based on the interview with the client. But...I will return my point to the original one I intended to make. Appraising should be based on consequences of the action of having the appraisal. My first line of thinking DID go to Neil''s, saying we should ask the buyer where he did (or would do) his shopping. But...on second thought...I see that THIS consequence should not get the weight...it does not determine anything too much. What IS determinative, is what the insurer will do. Regardless of the "marketplace," the insurer...unless this is stipulated as such, will replace for like kind, and here, the marketplace isn''t ordinarily relevant. The insurer has their own sources, and their own pricing structure, more like that of a vendor than of a consumer, and so...although respect should be given to the fact that insurance rates themselves are not designed, in most cases, to replace dollars, but diamonds...still, those diamonds will not ordinarily be at the mercy of the buyer''s selected market, so, I would say, neither should the appraisee''s valuation.

Populating an appraisal with several prices and markets seems to serve no purpose to the appraisee. It may be descriptive, and offer theoretical information, but the insurer should really only be interested in securing the highest valuation they can in order to replace the diamond.

Nevermind that I hold insurers, and frequently (though not lately) appraisers in contempt. The argument I''m really making is for the appraiser to offer the appraisee two effective documents...one that they might enjoy having (describing the value of the item if bought at somewhere...likely where it was not...probably what Saban has now), and the other, designed to accomplish for insurance purposes that which any appraisee will usually want...the ability to replace the item for the lowest annual cost reasonable.

 

[haagen_dazs]

Date: 9/12/2009 8:30:20 AM
Author: denverappraiser
Your insurer is requiring an appraisal for a variety of reasons that are not likely to be the same as yours.


1) It provides a 3rd party statement that the item actually exists, at least as of the date of the inspection.


2) It provides a statement of the condition, again as of the date of the inspection. They wish to avoid claims for pre-existing damage or claims that result from inherent defects in the product.


3) It provides a description of ‘like kind and quality’ for purposes of replacement.


4) It puts a 3rd party (the appraiser) legally on the hook with you if they want to go to the mat over the above.


5) It provides a basis for setting their premiums.


6) It sets the upper limit of liability for the policy.


Notice that none of these are really a function of what the item is ‘worth’ in any particular market. That is to say, it doesn’t really matter to them if you got a good ‘deal’ on your purchase. Buy what you want, from whoever you want and pay whatever you want. It’s not their job to assess the merits of your chosen merchant or of your transaction. What IS their job is to decide if they will agree to replace the item with another one that meets your description in the case of a loss in exchange for some premiums based on the declared value that YOU submit. Inflated values are in their best interest. They get to charge higher premiums for the same coverage while retaining plausibility deniability. After all, it was YOUR chosen exert who provided the information.


In nearly every case, the policy is agreeing to insure a piece of jewelry, not just a diamond. Grading reports on the components are definitely useful to them when they are available but they don''t serve the same purposes as an appraisal.


Neil Beaty

GG(GIA) ICGA(AGS) NAJA

Professional Appraisals in Denver

thanks thanks!
this is very well written!

 

[Regular Guy]

Haagen Daas is right...Neil sees and describes very well.

Kenny...may be right.

Date: 9/12/2009 1:41:50 PM
Author: kenny

I don''t blame the appraisers.
They have to follow the absurd conventions of their industry or their numbers will be very different from the competition and they''ll go out of business.

Oh well.

Imagine Kenny''s Apprasial Service:
What did you pay for it? $2000?
Okay then it''s worth $2000.
I''d go bankrupt fast.

But...I think the best defence...and perhaps offence...of a practice that is at variance to the norm, is that it is sound.

My suggestion for providing 2 appraisals does sound wacky, and on the face of it...I''m sympathetic that it would ultimately not fly. But...it is a first thought suggestion...and right now, I''m not seeing how not offering a low valuation shouldn''t be in the strategic interest of the shopper.

 

[denverappraiser]

I’ll ignore the comments of being worthy of contempt or simply irrelevant and I’ll try to address some of the more substantive issues. Thanks for the kind words Hagen Dazs.

Kenny,

‘Insurance replacement purposes’ is one of the key answers required in the interview.
The client of the appraiser is the insured, not the insurance company and it’s important to note that not all insurers have the same procedures. For details about a particular policy it’s important to read the policy and the appropriate people for questions about how it will be handled in the case of a claim is the agent, not the appraiser. That said, the usual approach for replacement is for the company to forward the description from the appraisal to their list of ‘approved’ jewelers who will bid on the replacement. These are generally local stores where the company has previously negotiated a cost-plus sort of pricing scheme. The jeweler will bid to replace the piece based on their own sources and the description provided. The insured then has the option to accept the replacement, argue about whether it’s truly ‘like kind and quality’ that they are being offered, or accept a cash settlement for THAT amount, as opposed to the face value of the policy. If the replacement bids are greater than the face value they’ll cash out for full value and be done with it. This does occasionally lead to a fight because the local jeweler may not be all that well versed in what YOU count as important in diamonds. That’s why it’s important to get it all in writing and up front. Pictures of things like ASET’s, IS’s H&A’s etc. in the appraisal are very helpful.

Ted,

In the case of Whiteflash ACA’s, and any branded sort of item that continues to be on the market it’s pretty easy really. The appraisal needs to list the value characteristics of the item being appraised. That is to say, it must specify the minimum attributes of ‘like kind and quality’ that the company must meet or exceed in order to make a valid replacement. All genuine WF ACA’s contain the WF logo etched on the girdle. You paid extra for this and it would not be like kind if it’s not present in the replacement. No insurer is going to knock that off and they would be hard pressed to find one from any source other than WF so as long as Whiteflash remains in business selling ACA’s and as long as they are available for less than the declared value then the problem is resolved by simply having a thorough appraisal prepared that specifies this. In practice, I’m confident that Whiteflash is cooperative with insurers who are trying to make their mutual clients whole after a loss. The procedure becomes slightly different if Whiteflash were to be out of business and they MUST use an alternative vendor but the concept remains the same. They must meet or exceed the specs given in your appraisal.
(Note: As with my answer to Kenny, the details of your insurance are driven by the insurer, not the appraiser and I’m speaking in generalities here. For details on your particular policy, ask your agent. INSURANCE COMPANIES AND INSURANCE POLICIES ARE NOT ALL THE SAME )

Ira

The valuation for an insurance replacement appraisal should be based on a realistic expectation of what the insurance company will be expected to pay to exact replacement in the case of a loss. In most cases the market for replacement jewelry IS more expensive than the discount internet deals we see here. That’s because consumers expect the service of visiting a local store and because there is often customization required for the replacement that was not required with the original because the exact design is no longer available from production sources. It’s also a standard practice among appraisers to add something of a buffer for inflation in insurance valuations because although the value given is associated with a particular date, the policy based on it is likely to remain in force and unchanged for years. As much as it would help the funding of my pension plan to have clients pay me for an update every time the price of gold or diamonds changes, I think this would meet some resistance.

The problem with providing 2 or 3 or 4 appraisals to the client is one of price (appraisal prices, not jewelry prices). People already complain that the cost of appraisal services is high and if we have to do 50% more work then you can bet the price of the service will go up both because of the additional research required and the additional time required to explain the results. It makes more sense to do extra, and charge extra, for those who require it and leave it simple for those who don’t.

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