purchase price in appraisal?

[questionsRus]

Hey guys, what's up. I recently had my diamond appraised (at least that's what i wanted, she actually did the temporary setting i bought as well, but that's ok. Anyhoo, in her appraisal, she stated that the replacement value of the diamond was one thing, and then she also mentioned what i paid for it. Isn't this kind of counterproductive? If the insurance company sees that, won't they say "well sheesh, he paid this, this is what it's worth". she did put that i could expect to buy a similar diamond for the appraisor price in a b&m store or online, but i'm still unsure. should i ask her to rewrite it without that?

also - what insurance company offers insurance where they will just give me cash value, i don't want them getting some cheap diamond if something happens to the one i bought? and how much more is it to do it that way?

 

[denverappraiser]

QuestionsRus,

Appraisal values are often misunderstood. Most jewelry appraisals are for insurance replacement purposes. In most such cases, the insurance company will write the policy where they agree to replace a lost item with another one of ‘like kind and quality’ in the case of a loss. This means that they will use the description in the appraisal, not the price, as the main guide in how to handle a loss. As long as they can replace the piece for less than the agreed value, they will do so. They will shop for the best deal they can find and, for the most part, they shop pretty skillfully. Since your premium is based on the bottom line amount of the appraisal instead of how the company will behave in the case of a loss, it isn’t really in your best interest to have an inflated value here although customers often seem to want this. Insuring it at a value based on your cost is often the best route although this may leave you underinsured if the replacement involves custom making something or some other special or unusual condition. It depends on the details of the individual item. This is part of the reason for getting an appraisal done instead of just submitting your sales receipt. Your appraiser is trying to cover all of the bases. She wants to give you big value to make you feel good, and include the cost to keep your premiums down.

Do you think you could the replace the item with a similar one for the same price? Can the insurance company? If so, keep the cost in there and bind the policy at that value. You might even consider removing the other value. If not, have the cost figure removed as irrelevant.

Does it say in the document how she came up with the replacement value?

Neil Beaty, GG ISA
Independent Appraisals in Denver

 

[questionsRus]

it sys the instruments used, what was appraised, and where i bought it. quoted:

Lady's yellow gold solitaire style engagement ring stamped inside the shank: 14K (no trademark) finger size 7-1/2 with a four prong white gold head containing one round brilliant cut diamond weighing .81 ct., VVS-2 in clarity, I in color, and of excellent proportions (hearts and arrows effect). The diamond is set in a manner to expose the laser inscription: SUPERB(HEART)CERT 13289229 easily visible at 30x on the girdle edge.

Replacement cost new ----------------------------------------------xxxx

**appraisor did not sell the diamond or the band, however they did set it after examining it in my presence and verifying the grade from documention that mr. (me) presented: GIA report#, GEMEX Light Performance Analysis #, and Megascope report #; photocopies of documents attached. He also disclosed that both the loose diamond and the solitaire mounting were purchased on the internet ($x diamond, $x solitaire ring). The above replacement cost new represents the modal selling prices of a comparable ring complete at the majority of area retail stores that could supply such as of the date of this document, including the Internet. Several sources were referenced for valuation purposes. The diamond was reexamined after setting in the solitaire mounting and verified to be the same diamond

Instruments used: blah blah blah. Note: It does not appear that this diamond has been clarity enhanced, laser drilled, fracture filled, nor is HPHT treated. Testing with instruments that may be available at a future date could prove different results. According the the www.superbcert.com website I referenced the disclosure statement attests to the fact that their diamonds are also conflict free. This is currently not possible to positively identify.


That's about it, except to the attached documents.

 

[questionsRus]

good lord that was the most typing i have done in a long time!

 

[diamondliz]

She probably appraised the temporary setting because insurance companies will not insure a loose diamond (in most cases). USAA will provide the full amount of the appraised value in CASH. They are one of the few insurance companies I have heard of that have a cash option.

 

[questionsRus]

Thanks kile. Can non government people get USAA? (asking for the benefit of other people reading, i can get it)

 

[diamondliz]

I believe it is still only military and their dependants. Enlisted can now get it.

 

[denverappraiser]

questions,

That description is pretty good, as is the explanation. I don't think the mention of your cost causes you any problem because she is clearly stating what she means by her value conclusion (and it makes me all tingly to see someone use the word 'modal' in a sentence). She is just documenting the details of original transaction. It would probably be better to mention the specific vendor instead of the generic term 'on the internet' when discussing the purchase but this is elsewhere in the description and presumably in the attached documents. If the value defined in the insurance policy is the one she calles 'replacement cost new' then you should be fine.

USAA is available only to US military personell, vetrans and their dependents. Chubb, Firemans Fund and Jewelers Mutual offer defined value policies as well. I'm sure there are others. They tend to be substantially more expensive than the replacement variety but they are popular with many people on this forum for obvious reasons. The companies usually want to see receipts and to write the contract using this price as the defined value but this isn't always the case. It can't hurt to ask.

Naturally, the discussions on this forum shouldn't be mistaken for real insurance advise. The details of the contract are important.

It looks like a lovely diamond by the way.

Neil Beaty GG ISA
Independent Appraisals in Denver

 

[rocks]

USAA is a fabulous company. it is essentially a cooperative, (though they are not a "for profit"entity, they do pay an annual dividend to subscribers, based upon "losses") and their membership is restricted to former officers and their dependents (through an affiliate company). if either of your parents were officers, and subscribers, then you would be eligible for any of their insurance or banking products.

if you are eligible, they are the best.

 

[niceice]

We've never been impressed with USAA as a replacement company for jewelry... They might be great for cars and houses and stuff like that, but in our opinion they're jewelry replacement program leaves a lot to be desired.

The reason for stating both the purchase price and the estimated retail value on an appraisal is because ethical business / appraisal practice requires that the original purchase price be disclosed as well as the estimated retail value if different... In some cases, it may prevent your insurance company from denying your claim for fraud related reasons because they can't reject your claim under the guise that you over insured the item without disclosure...

 

[fire&ice]

One thing - I remember a poster a while back with this insurance. From her description USAA only insures for "theft" & not loss. If true, something to really think about.

 

[rocks]

with usaa, if you have a personal articles floater, they insure against all losses. about 3 years ago, i lost a ruby and diamond earring, shortly after i got them. i was completely up front about having lost it, and had only just added it the policy...they paid for me to have it replaced at my discretion. i was shocked, but those are the facts! my diamonds are also insured with them, and they assured me that they would pay cash is i could replace any lost diamond at a lower price than they could (there is a notation referencing the gia certs and sarin reports).

i will say that they are not terribly knowledgeable about precious stones or their value...but if you can provide them with enough information, they will generally comply with a member's request. they take integrity and honor very seriously.

 

[blitz]

USAA! I am an appraiser that writes appraisals for USAA members and am also a USAA member for 18 years.
They gave us double the amount we filed for after the Northridge earthquake, saying out bids were too low to repair. They turned out to be correct!

As for jewelry, they sell jewelry, so a member does have the option of replacing through them, or they will cash out (nothing is every written in stone with insurance companies).

"The reason for stating both the purchase price and the estimated retail value on an appraisal is because ethical business / appraisal practice requires that the original purchase price be disclosed as well as the estimated retail value if different... "
Thank you, thank you, thank you. Most of the internet sellers (diamonds that I have seen) sell diamonds below the most common retail cost. Based on the traditional jewelry store as being where the majority of people buy.
Not all the internet people report both, for that matter alot of "stores" don't either. I think your doing right

 

[questionsRus]

Hello again. I signed up for USAA today, and it turns out i can't get insurance for a ring from them, because i don't have home or renters insurance. However, they said I can still get it under my parents until I get a house and have home insurance. So, to those of you who have USAA, how much is coverage normally? Thanks for all the input, i understand now why the lady said what she did in the appraisal. thanks a ton!

 

[rocks]

hi rus,
cost for insurance depends upon where you live, and their experience with loss in your area. unless you live in nyc or another major metropolitan area they will probably be in line with most other insurance companies, possibly a bit cheaper. probably cheaper than chubb. also, their customer service people are exceptional.

to put you further at ease...i also have two clients...a three star general and retired admiral. both have some remarkable jewelry insured through usaa. both have suffered at least one loss since i have known them, and usaa chose to let us to the replacement simply at the members request.

good luck!

 

[hoorray]

I have USAA insurance for everything (homeowners, auto, property, jewelery, etc.) I've had it for 18+ years, as my DH won't even consider anyone else. I've never had a big loss , but the minor claims I've made have been handled so efficiently, that I become the hold up in the process really quickly.

I can't find the exact amount we pay, but think it is the range of $1.1 - $1.4/$100 insured. Thus, it pays to keep the insured value close to what it would cost to actually replace the item, not an inflated "retail" price that no one pays.

I recently called to make sure they had enough information about my e-ring stone listed. They told me that the stone was insured against all theft and loss, so I think F&I is wrong on this point. They were more than happy to add the sarin report to my docs. They are not super knowelegable about fine jewelery, but I don't think that would keep them from doing the right thing on a loss. I bought a necklace through them once, and returned it because it was lighter weight than I expected. I don't think I want them buying my replacement unless I have a lot of say in it, but I have to believe that they have good buying power if you can control the quality.

I lost a diamond earring once that was covered by a blanket special rider -- not specifically, and they cut me a check immediately.

SO...I can't claim that I've had a big loss and they came through, but my experience with them is top notch, and if I were you, I would simply call them and ask the specific questions you may have about how they work.

One thing to note -- they told me they had to be able to replace the stone for the $$ amount covered, or they would just cash me out. If I think the value has changed, I should submit a new appraisal and revise the covered value periodically. I may do that in the next year or so due to the increasing prices, as I don't have the value significantly over inflated.