Re-appraisal for diamonds that are no longer in production

[chrono]

After reading another post about when to re-appraise your diamond, a thought popped up in my mind:
What about stones that are no longer cut? For example, my Jubilee is no longer in production. How does that affect its value? I''d rather have another Jubilee than cash out but I guess that''s not possible since there''s no more Jubilees.

 

[oldminer]

If a like-kind is not available the option of the insurance company is usually to give you a cash payment. Its the same with a car. If you have a car which went out of business after you bought yours, they will let you replace it with another car of a different brand or give you money. No one will make a one-off car for you and probably you can''t get a one-off diamond cut for yourself, either. Some things just can''t be replaced with identical items.

 

[denverappraiser]

Insurance companies agree to insure a lot of different things, many of which are unique in nature. Standard jewelry insurance is different from other kinds of personal property insurance in several important ways but one big one is that they generally agree to replace a lost item with another of ‘like kind and quality’ that is new. That is to say that even though what you lost was a used ring, watch or whatever, they will replace or fund replacement with a new one. This is not the way they handle cars, furniture, computers or most other insured property. With most items, they will look to see what a comparable new one will cost and then reduce that value based on the age to account for the fact that it is no longer a new item.

This puts them into a funny situation with jewelry where a new one is simply not an option, in cases like yours where the copyrighted design is no longer in production or, for example, when the designer is deceased or simply retired on the beach somewhere. They must find an alternative. The first option will be to try to find an alternative designer, cutter or whatever that currently makes an acceptable substitute. ‘Like kind and quality’ is not the same as ‘identical in every way’ after all. Another option is to find a replacement on the secondary or used market. Another is to hire a contemporary craftsman to reproduce the item. Modern cutters CAN cut most specialty cuts if they choose to, it’s just a matter of whether the sales price will justify this kind of custom work and if copyright law will allow it. Lastly, they have the option to pay cash at the face value of the policy.

My general observation is that most companies are genuinely interested in happy customers and that they will enter into this negotiation in good faith either through an adjuster or a replacement contractor. They will try to match your lost item and if they can’t find it, they will try to offer a reasonable substitute. This is where it gets sticky. If their offer isn’t acceptable but it meets the description contained in the appraisal that you presented at the beginning then you’re in a bind. They are being reasonable and it’s you who isn’t.

The solution is twofold. First, read your appraisal. Make sure your appraisal has an accurate description of your ring and that it contains all of the attributes that you consider to be important including things like specialty cuts, designers and whatever details you would like to be considered in the case where a replacement becomes necessary. If it doesn’t, call your appraiser or get it appraised by someone else. Second, consider if the valuation is realistic to what is being discussed and that it is justified by description in the report. You’re paying the company premiums to make you whole again in the case of a loss, but it’s only fair if you actually tell them what that’s going to entail.

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