Is it possible to negotiate the appraised value with appraiser?

[geek_for_diamond]

Hello,

I just got my georgeous e-ring from GOG, the next step will be insurance.
My ring costs $7000 and the apprasial from GOG is $10900, 50% more than what I paid. If I go to an independent appraiser just for insurance purpose, the apprased value could be be even higher. I''m not sure if it''s possible to ask the appraiser to just value my ring like 20% higher than purchase price, which should be good enough to cover the inflation for the next couple years. Since I live in NJ, in case of loss, I can easily go to GOG to get a replacement without paying high mall jeweler price.

I searched the forum, basically there are two choices - Chubb and JM. From what I learned Chubb has cash out policy, can insure with purchase amount, but per dollar premimum is higher, and it''s not easy to find a broker to issue standalone chubb policy. Therefore I may go with JM.
If the appraised value can be lower to $9000, according to JM the premium savings would be about $30 per year. I''m not sure if it worth the trouble? Is it even possible to ask GOG to reissue an apprasial with lower value?
I may also want to add $500 deductible to save additional 14% premium, I have $1000 deductible on my auto insurance, but I saw somewhere mentioned most people want 0 deductible?
Anyway thanks for your inputs!

 

[shiatsu]

Just tell the appraiser what you believe the value should be and see if he agrees with you. If you have a good idea what it''s worth most likely he will agree. Their job is to appraise it at what a normal B & M store would sell it at (often insurers will only work with approved B & M stores when replacing), and it''s their job to be pretty accurate at doing that. Appraisals supplied by the place selling you the jewelry are often inflated a little, but it''s not a bad idea to have the appraisal a little high to give yourself a little cushion to make sure you can replace it with something exactly the same as you have.

 

[denverappraiser]

The job of the appraiser is to provide documentation that properly describes and properly funds a replacement with like kind and quality in the case of a loss. They do that by looking at the marketplace and seeing what comparable items cost. If you have a recent arms length transaction involving that very item, this is one of the best possible ‘comps’ they can get (there are times when this is not the case but generally it applies for new purchases). The difficulty is in defining the market of replacement because the same thing will be priced differently in different marketplaces. This decision is made by the appraiser rather early on in the appraisal session. I''m not sure ''negotiate'' is the right word for this but ask them directly what market they chose and why they chose that one. They should be prepared to explain and, if it''s not appropriate for the situation at hand, they should be willing to change.

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

 

[belle]

you don''t *have* to insure the diamond for the appraised value. the point of the appraisal is to assure the insurance company that the item is ''worth'' at least what you are insuring it for.
you pay the premiums, so you get to determine how much coverage you want. if you want to just be covered for exactly what you paid, then insure for that amount. if you want to pay the premiums to insure the item for more than you paid, you get to decide that too. it really doesn''t matter how high the appraisal amount is, you decide what amount (high or low) you want to be covered for.

 

[Regular Guy]

I think there's high practical variability in this area:

Date: 1/29/2007 10:53:09 PM
Author: belle
you don't *have* to insure the diamond for the appraised value. the point of the appraisal is to assure the insurance company that the item is 'worth' at least what you are insuring it for.
you pay the premiums, so you get to determine how much coverage you want. if you want to just be covered for exactly what you paid, then insure for that amount. if you want to pay the premiums to insure the item for more than you paid, you get to decide that too. it really doesn't matter how high the appraisal amount is, you decide what amount (high or low) you want to be covered for.

Belle, I think JM is on record that you only have this choice in sub $5K pricing. Over that amount...you need the appraised amount. That was true in working with my agent, who's given me a rider on my homeowners with Nationwide. Alternately, I think, without having explored it in great detail, the agent from State Farm who would have offered a valuable articles policy may have did what you said, Belle. And...god's honest truth...I think the variability may be more usually based on the norm adopted by the agent than by company policy...though I don't know that for a fact. Reading here. it looks like recently, per Rock Doc, with the Totaldollar guy being active, a new threshold of near $10K is the new minimum for Chubb through him...though previously no such minimum had been recorded at all.

Also, Denver....though I appreciate the real spirit of what you say, I'm inclined to think most appraisers wouldn't be so flexible unless the conversation you suggest were engaged WAY at the beginning of the relationship...like when you're setting up the appointment, vs after you walk in the door.

 

[RockDoc]

There are a lot of factors that apply.


Time is certainly one attribute that should be considered.

When buying a stone, no one is under any requirement to make the purchase within a "tight" frame.

When an insurance company has to buy a replacement - they are under some time constraints on occasion.

For commonly available items, this isn't an issue, but when uncommon size or quality stones are the object that has to be purchased, having to buy a better stone may become an issue.


Let's also take a large OEC cut stone- say 4 carats for example. When purchasing one that has been used in a period piece, the price is generally lower than a modern cut stone. Let's approximate a selling price of $ 28,000.00 probably a fairly close estimate of what might have been charged at the time of sale.

Now let's assume that OEC is lost out of the mounting, and because of the style of mounting is "antique" looking, just plopping a modern cut stone would ruin the look, and at least as the customer is concerned doing that would "ruin" the "look" of the item.

The insured bought a replacement policy for $ 28,000.00

In that the insurance company can't replace the stone- they cash out, and the insured gets a check for $ 28,000.

They love the design of the ring, but can't find a stone that will fit in it that is an OEC cut stone.


So folks..... think about what should be done here.......... ????????

Anyone got any thoughts?

Rockdoc





If one isn't available - what to do?

 

[oldminer]

We generally make our reports for retail replacement value. Alternatively, after a conversaton with more sophisticated clients we often provide a dscount retail replacement value which gives adequate coverage, but is a price in a more competitive market. We can, but don''t generally offer, to appraise items at Deep deiscount retail value, which would be like Internet replacement value. I personally think it is risky to have no cushion in the valuation, but it is a decision mutually arranged between the appraiser and the client. There is no problem in suiting certain situations with the correct level of mark-up.

Sometimes an appraiser must make the right selection of market and hold firm. Not everything is subject to the request of a client. If a consumer wants a low figure on an appraisal simply to return an item to a retailer because it didn''t appraise for enough then we have a big problem. I don''t mind making an appraisal fit the legitimate needs of a client, but I have a big problem with being mis-used and being put in the middle of a change of heart about a purchase.

 

[Regular Guy]

Truly, the advantage of a company like Chubb is the transparency of their offer...i.e., what your insurance covers you for is a check in the amount of what you insure the diamond for. So, the value of your monthly payments is clearly tied to a specific payout at the end, if the need for a payout ever comes to fruition.

What most insurance is about, however, is not this kind of payout. It''s about replacement cost. In this case....since I do believe that most insurance carriers will attest to replacing like kind based on an appraisal document...what is the appraiser to consider with respect to his one on one conversation with the client? Whose interest is he serving? The client...who can replace at internet costs. The unknown insurer...whose actual expense is designed to be based on a fraction of the the client''s cost, and accordingly, the rate of monthly insurance is also probably less than Chubb''s rate, since the representation of insurance is not replacement then, but for the ostensible retail amount itself.

Rock explicitly says that when doing an appraisal, the particulars of the insurer should be discussed. But...that is just a discussion, and not a commitment. Yet, the client walks away with a document that he can do whatever he wants with.

It''s an overly wild and woolly environment out there, vis-a-vis insurance. In the end, because I am very bad with paperwork, working with an insurer that can just grab its premium automatically every year from my homeowners insurance premium has worked for me. From this point of view, the aesthetic that is attractive to me, ethically, is consistent with Dave''s point here: "Sometimes an appraiser must make the right selection of market and hold firm." Frankly, this firm point is not seemingly checked by anybody, and ... unless I learn differently, is pretty arbitrary, actually. Still, from the point of view of insurers standard practice, and the real relationship appraisers have with society...setting a price for goods so that insurers can recoup consistent with the tables they intend when they set their pricing...I''m guessing this norm is reasonable....though not necessarily best for a client who wants to game the system, whose rulebook is not very well written.