Need Assistance Understanding Appraisal

[Matthews1127]

Good Morning, PS!
I took my wedding set to be appraised, last evening. While I was able to be a part of the process, and asked plenty of questions, I'm still unclear of one thing:
Does the appraisal determine the estimated VALUE of the items appraised, or their estimated WORTH?
I am clear that because the diamonds & pieces were appraised INTACT that everything was ESTIMATED, not EXACT.
I am particularly interested because my pieces were appraised marginally higher than what was spent (before taxes & extended care policies).

Any information that can be offered to help me to better understand my appraisal is appreciated.
Enjoy your day!!!

CRM

 

[Austina]

Here in the U.K., an appraisal is usually based on what it would cost to replace the item, rather than the 'retail value' of the piece. Our insurance company require appraisals for individual items over a certain value, and only insure them if they're in the safe or you're wearing them. We insure things based on the receipted cost, rather than an inflated sum, otherwise our premiums are ridiculous.

 

[denverappraiser]

Not all appraisals are answering the same questions. The key is in the definition of ‘value’, and this should be contained within the body of the report. With most, say 80%, the question being answered is what would it be reasonably expected to cost to replace the piece with another of like kind and quality, at retail, new, locally, in the case of a loss. This is known as insurance value because that’s what the insurance company is agreeing to do, and the appraisal report will become something of a purchase order for that replacement in the case of a loss.

It’s common for replacement to cost more than the initial purchase. Some of this is simple puffery but there really are a few important dynamics at play.

For example the replacement often will be using local one-off manufacturing and local labor while the original was mass manufactured in a lower wage place.

For example, retailers, and manufacturers, don’t all charge the same for their time and talents. The appraiser is estimating this, and most will estimate on the higher end. Put another way, We’re not usually assuming that you’re going to replace using the cheapest stonesetter in town. Supplies do not all cost the same, even if they’re similar. Even things as simple as karatage are an issue. 18k means 75% gold. How do we know it’s not only 72%? We have chemical and electronic testing techniques, but they’re not all that accurate. The difference between 17k and 18k is within the margin for error. On the other hand, the most accurate tests are destructive. Obviously, we don’t want to do that. The result is that we’re doing the best available non-destructive test, we come to what we believe to be a reasonable conclusion, and that becomes carved in stone. At replacement time, they MUST deliver 75% or the customer isn’t being made whole.

Certain data, as you observe, is estimated. For example, actual weight of those little stones on the sides of the piece called melee. Come replacement time, it will be necessary for the replacement jeweler to buy some stones, and the price will be based on the actual weight, but it’s crazy and destructive to take apart the piece to get that weight. That leaves two paths. We can estimate based on the dimensions, or we can use outside information, like a claim from the manufacturer. Whoever made the first one really did know and it’s just a matter of whether this made it through to the appraiser.

Your appraiser should be prepared to answer all of these questions. Most should be in the body of the report itself. If you don’t understand their report, call them up and ask questions. Their contact information should be in there as well.

 

[Matthews1127]

Not all appraisals are answering the same questions. The key is in the definition of ‘value’, and this should be contained within the body of the report. With most, say 80%, the question being answered is what would it be reasonably expected to cost to replace the piece with another of like kind and quality, at retail, new, locally, in the case of a loss. This is known as insurance value because that’s what the insurance company is agreeing to do, and the appraisal report will become something of a purchase order for that replacement in the case of a loss.

It’s common for replacement to cost more than the initial purchase. Some of this is simple puffery but there really are a few important dynamics at play.

For example the replacement often will be using local one-off manufacturing and local labor while the original was mass manufactured in a lower wage place.

For example, retailers, and manufacturers, don’t all charge the same for their time and talents. The appraiser is estimating this, and most will estimate on the higher end. Put another way, We’re not usually assuming that you’re going to replace using the cheapest stonesetter in town. Supplies do not all cost the same, even if they’re similar. Even things as simple as karatage are an issue. 18k means 75% gold. How do we know it’s not only 72%? We have chemical and electronic testing techniques, but they’re not all that accurate. The difference between 17k and 18k is within the margin for error. On the other hand, the most accurate tests are destructive. Obviously, we don’t want to do that. The result is that we’re doing the best available non-destructive test, we come to what we believe to be a reasonable conclusion, and that becomes carved in stone. At replacement time, they MUST deliver 75% or the customer isn’t being made whole.

Certain data, as you observe, is estimated. For example, actual weight of those little stones on the sides of the piece called melee. Come replacement time, it will be necessary for the replacement jeweler to buy some stones, and the price will be based on the actual weight, but it’s crazy and destructive to take apart the piece to get that weight. That leaves two paths. We can estimate based on the dimensions, or we can use outside information, like a claim from the manufacturer. Whoever made the first one really did know and it’s just a matter of whether this made it through to the appraiser.

Your appraiser should be prepared to answer all of these questions. Most should be in the body of the report itself. If you don’t understand their report, call them up and ask questions. Their contact information should be in there as well.

Thank you, @denverappraiser!!
This is what I THOUGHT, but I wanted to confirm that I understood, correctly. I know this is merely for replacement purposes, and I'm thrilled with the report. I was also impressed by the appraiser; she was thorough, detailed & extremely helpful in explaining things. I just wanted to be certain I followed, correctly. I do not assume things, if I have any question of understanding.
You have confirmed everything for me, and I thank you very much!!

 

[denverappraiser]

I imagine she would appreciate it if you would give her name and maybe even say something nice about her here, on Yelp, or on Google.

 

[Matthews1127]

I imagine she would appreciate it if you would give her name and maybe even say something nice about her here, on Yelp, or on Google.

I will have to do that!!! She was wonderful!!!

 

[KKJohnson]

Thank you posting this thread! We just insured my ring (after months and months of harassing my hubby) and they told us that we have to have the ring reappraised every 5 years. So it got me thinking of the appraisal because everything to do with the stones weight was all estimated so now that I have sent it off for a new setting should I go ahead and request they send it to get A GIA report? This things are confusing but knowing what the appraisal means in replacement if anything happens helps

 

[Matthews1127]

Thank you posting this thread! We just insured my ring (after months and months of harassing my hubby) and they told us that we have to have the ring reappraised every 5 years. So it got me thinking of the appraisal because everything to do with the stones weight was all estimated so now that I have sent it off for a new setting should I go ahead and request they send it to get A GIA report? This things are confusing but knowing what the appraisal means in replacement if anything happens helps

If you can afford to have it GIA, certed, and you have NO certification, it would be a good idea to have the diamond sent to GIA for certification; appraisers use your cert during their appraisal, because it's estimated. My appraiser mentioned GIA certification costs $600.00USD. My diamond is certified, but we were talking about diamonds, jewelry & other things during our time, together & it came up in conversation.
It's also helpful, if your stone is laser inscribed, which, if it is not, and you want GIA to add your cert# onto your diamond, that is an additional charge.
Appraisals are good for 3-5 years (mine expires in 3). It is recommended to have appraisals every 3-5 years to keep the insurance updated, and ensure the value of any replacement is compliant with comparable prices, of the time (God forbid you may HAVE to replace any of your valuable jewelry).

 

[KKJohnson]

If you can afford to have it GIA, certed, and you have NO certification, it would be a good idea to have the diamond sent to GIA for certification; appraisers use your cert during their appraisal, because it's estimated. My appraiser mentioned GIA certification costs $600.00USD. My diamond is certified, but we were talking about diamonds, jewelry & other things during our time, together & it came up in conversation.
It's also helpful, if your stone is laser inscribed, which, if it is not, and you want GIA to add your cert# onto your diamond, that is an additional charge.
Appraisals are good for 3-5 years (mine expires in 3). It is recommended to have appraisals every 3-5 years to keep the insurance updated, and ensure the value of any replacement is compliant with comparable prices, of the time (God forbid you may HAVE to replace any of your valuable jewelry).

Yeah I might go ahead and ask David Klass if he can send it to get GIA certified if it helps keep any future appraisals accurate. Seems like the best time to do since it's being reset. It's funny because I've had two different local jewelers tell it's not worth having the GIA, but when comparing buying another stone outright I can't get anywhere close to replacing it in based on the $$ it was appraised for. My husband wants it appraised lower so he doesn't have to pay so much on the insurance but I don't think he understands we couldn't replace it just on the insurance on the alone if it was ever lost/damaged/stolen. I think I will post the specs on the thread I started and see what some of the pros say here on PS. Thanks for your input!

 

[MollyMalone]

If you can afford to have it GIA, certed, and you have NO certification, it would be a good idea to have the diamond sent to GIA for certification; appraisers use your cert during their appraisal, because it's estimated. My appraiser mentioned GIA certification costs $600.00USD. My diamond is certified, but we were talking about diamonds, jewelry & other things during our time, together & it came up in conversation.
It's also helpful, if your stone is laser inscribed, which, if it is not, and you want GIA to add your cert# onto your diamond, that is an additional charge. * * *

Hope you don't mind, Matthews, if I clarify a couple of things. GIA's fees are on a sliding scale, so unless your stone is 6+ cts, you won't be paying GIA more than $500 under current pricing. E.g., GIA is presently charging $105 for a Diamond Grading Report (their more expensive report) on a 1.00 - 1.49 ct. Also, if you opt for the Diamond Dossier report (available for diamonds under 2 cts; costs $85 for 1.00 - 1.49 ct stone), the laser inscription is included free of additional charge. That's because the Diamond Dossier does not include the clarity plotting diagram provided when you ask for the Diamond Grading Report.

More info about GIA's 4 different, diamond grading reports for D-Z stones & link to price schedule here:
https://www.gia.edu/gem-lab-service/diamond-grading

 

[Matthews1127]

Yeah I might go ahead and ask David Klass if he can send it to get GIA certified if it helps keep any future appraisals accurate. Seems like the best time to do since it's being reset. It's funny because I've had two different local jewelers tell it's not worth having the GIA, but when comparing buying another stone outright I can't get anywhere close to replacing it in based on the $$ it was appraised for. My husband wants it appraised lower so he doesn't have to pay so much on the insurance but I don't think he understands we couldn't replace it just on the insurance on the alone if it was ever lost/damaged/stolen. I think I will post the specs on the thread I started and see what some of the pros say here on PS. Thanks for your input!

Just something to consider: appraisers follow a protocol. Asking an appraiser to "go low" is probably not possible, and if it is, not recommended. Prices fluctuate, and you want to make sure you have room in your replacement budget to account for inflation in market prices. Hopefully, you'll never have to use it...but in case of unforeseen circumstances, higher is always better.
I understand your DH wanting to save money, but, in the long run, it may set you back, in the future, if you ever find yourself in the position where you have to replace anything....

 

[KKJohnson]

Hope you don't mind, Matthews, if I clarify a couple of things. GIA's fees are on a sliding scale, so unless your stone is 6+ cts, you won't be paying GIA more than $500 under current pricing. E.g., GIA is presently charging $105 for a Diamond Grading Report (their more expensive report) on a 1.00 - 1.49 ct. Also, if you opt for the Diamond Dossier report (available for diamonds under 2 cts; costs $85 for 1.00 - 1.49 ct stone), the laser inscription is included free of additional charge. That's because the Diamond Dossier does not include the clarity plotting diagram provided when you ask for the Diamond Grading Report.

More info about GIA's 4 different, diamond grading reports for D-Z stones & link to price schedule here:
https://www.gia.edu/gem-lab-service/diamond-grading

The center stone is estimated to be 4.45 but I don't might paying up for accurate information especially because the stone was my mother in laws. I see it as an investment (maybe not a great one but still it's a valuable asset) so having accurate information on it would be good

 

[Matthews1127]

Hope you don't mind, Matthews, if I clarify a couple of things. GIA's fees are on a sliding scale, so unless your stone is 6+ cts, you won't be paying GIA more than $500 under current pricing. E.g., GIA is presently charging $105 for a Diamond Grading Report (their more expensive report) on a 1.00 - 1.49 ct. Also, if you opt for the Diamond Dossier report (available for diamonds under 2 cts; costs $85 for 1.00 - 1.49 ct stone), the laser inscription is included free of additional charge. That's because the Diamond Dossier does not include the clarity plotting diagram provided when you ask for the Diamond Grading Report.

More info about GIA's 4 different, diamond grading reports for D-Z stones & link to price schedule here:
https://www.gia.edu/gem-lab-service/diamond-grading

That's extremely helpful, and thank you for clarifying. I'm surprised she gave me a figure of $600, but perhaps, she was including other charges in her estimate? I have no idea; I never inquired, she offered the information in casual conversation.
I appreciate the clarification, and I am thankful you made & noted the corrections!!
Accurate info is so vital!!!

 

[MollyMalone]

@Matthews1127 - yep, the appraiser's price estimate may have included her estimate for what she/a jeweler would charge to remove the stone & send it, insured, to GIA.

@kristine johnson - I don't believe David Klass "covers" loss or damage to your stone while it's in his possession or in the possession of his outside benches (that's far from unusual; many jewelers do not have insurance coverage for this & will expect you to waive liability on their part), definitely something to find out. Is the ring presently insured? Even if it is, the policy may not extend to this scenario. So far as I know, Jewelers Mutual is the only jewelry insurance carrier that will cover loose stones while being set, and even that has certain qualifications, primarily that the stone is set w/in 30 days of purchase. JM may be willing to write a policy that covers a gift transfer, rather than purchase, but in any event will want an appraisal before quoting a price, writing the policy. Sorry to bring up possible, additional complications & perhaps you've already squared all this away!

 

[KKJohnson]

@Matthews1127 - yep, the appraiser's price estimate may have included her estimate for what she/a jeweler would charge to remove the stone & send it, insured, to GIA.

@kristine johnson - I don't believe David Klass "covers" loss or damage to your stone while it's in his possession or in the possession of his outside benches (that's far from unusual; many jewelers do not have insurance coverage for this & will expect you to waive liability on their part), definitely something to find out. Is the ring presently insured? Even if it is, the policy may not extend to this scenario. So far as I know, Jewelers Mutual is the only jewelry insurance carrier that will cover loose stones while being set, and even that has certain qualifications, primarily that the stone is set w/in 30 days of purchase. JM may be willing to write a policy that covers a gift transfer, rather than purchase, but in any event will want an appraisal before quoting a price, writing the policy. Sorry to bring up possible, additional complications & perhaps you've already squared all this away!

Ring is insure but I'm not sure it covers (I will be looking that right now, we did tell them we were having it reset so I'm suprised they didn't say anything). Interesting that when I tried to link to David's website it redirects me to Michael Kors...I'm kinda disappointed that he doesn't carry insurance for lose and wouldn't advise clients of this. I have already shipped the ring so there isn't any going back now.

 

[canuk-gal]

The center stone is estimated to be 4.45 but I don't might paying up for accurate information especially because the stone was my mother in laws. I see it as an investment (maybe not a great one but still it's a valuable asset) so having accurate information on it would be good

If it were me, I'd get the GIA cert. You might learn it is larger than estimated (price benchmarks increase at 4.5, etc) --hence the value increases. No downside to having accurate information!

cheers--Sharon

 

[diamondseeker2006]

Just a note regarding insurance. I personally never insure with an inflated insurance valuation. In fact, my diamond has gone down in value since we bought it, which would be true of most people who bought when prices were higher back in 2011 or 12 for the next couple of years. So I really would be overpaying a lot if I had used an inflated appraisal instead of my purchase price. Diamonds can decline in value, stay stable, and they can go up. But I think the wisest thing is to update the appraisal if there is an upward trend in prices. Otherwise, you pay too much in insurance premiums, which isn't any better than having to pay some towards a replacement. Most of us will pay for premiums for many years and never use the policy, so overpaying premiums based on an inflated really does not make financial sense.

 

[MollyMalone]

Ring is insure but I'm not sure it covers (I will be looking that right now, we did tell them we were having it reset so I'm suprised they didn't say anything). Interesting that when I tried to link to David's website it redirects me to Michael Kors...I'm kinda disappointed that he doesn't carry insurance for loss and wouldn't advise clients of this. I have already shipped the ring so there isn't any going back now.

Off the top of my head, think Alistair McKelsey (in Australia), Brian Gavin Diamonds, and Leon Mege are the only jewelers generally known to the PS community who cover outside stones entrusted to them. But at least Whiteflash and Victor Canera post a cautionary advisory on their respective web sites; WF's is especially thorough:
https://www.whiteflash.com/about-di...g-with-customers-diamonds-and-jewelry-875.htm

Do let us know if DK tells you he has insurance & that he is indeed willing to assume liability for any damage and loss to your stone -- I'd be happy to be wrong!

 

[Octo2005]

Off the top of my head, think Alistair McKelsey (in Australia), Brian Gavin Diamonds, and Leon Mege are the only jewelers generally known to the PS community who cover outside stones entrusted to them. But at least Whiteflash and Victor Canera post a cautionary advisory on their respective web sites; WF's is especially thorough:
https://www.whiteflash.com/about-di...g-with-customers-diamonds-and-jewelry-875.htm

Do let us know if DK tells you he has insurance & that he is indeed willing to assume liability for any damage and loss to your stone -- I'd be happy to be wrong!

Add Steven Kirsch to that list. I had my own insurance on the loose stone, but he has a policy that covers it while it is there.

 

[Octo2005]

Add Steven Kirsch to that list. I had my own insurance on the loose stone, but he has a policy that covers it while it is there.

This was earlier this year, so please clarify that with him to make sure that is still his current policy

 

[canuk-gal]

If it were me, I'd get the GIA cert. You might learn it is larger than estimated (price benchmarks increase at 4.5, etc) --hence the value increases. No downside to having accurate information!

cheers--Sharon

Too late to edit--so providing an addendum to my comment above. I would, first, clarify with your vendor the process of sending the stone to GIA--insurance coverage while in transit, etc,--before agreeing to send it. MollyMalone provided a substantive post.

cheers--Sharon