Ring appraisal lower than expected, now what?

[hopefulheidi]

Long story short, we got my engagement ring appraised this past Friday and my fiance and I were both a bit surprised to see how low the replacement value came in. I understand that my G colored I1 doesn''t fetch the highest $/carat nor does my palladium&white gold alloy setting compare to platinum, but our appraisal was just a teeny tiny smidge over what we paid for the piece and I''m pretty confident we got a really good deal. The appraised value probably couldn''t have been any closer to our price tag if we had just done the math for the appraiser; which I assume is what you generally want in an appraisal. No sense in overinsuring right?

Except in our case, 2+ ct Ideal cut stones in the G-H range with an eye clean I1 clarity are next to impossible to find. In a way this makes our "sweet spot" kind of rare, but it''s not the kind of rare that seems to factor into the appraisal value. If we were to have Chubb pay out for a replacement we''d either 1) Probably end up waiting months to find a similiar stone that compares to our current one or 2) Be forced to chip in extra money to go up in clarity while staying in the size/color we like (or perhaps even to just get an equally good I1). Nate has already contacted our insurance guy and he was very adament about the fact that we cannot insure the ring for more than it''s recent appraisal value.

I''ve done a little bit of research on insurance pay outs and I know there is often talk of the replacement plan where a vendor is chosen, and any future stone replacements are facilitated by that vendor. Would that perhaps be a better idea for us? If we went this route, and a vendor was able to find a G-H, I1-I2, Ideal cut stone around 2 carats but it had a higher price tag, would we be required to pay the difference or does such an insurance plan cover the actual specs regardless of associated cost?

Any help would be appreciated

~Heidi

 

[diamondseeker2006]

Chubb with a pay-out is almost always the best choice. Remember that the insurance will hopefully never be used! So be glad the appraisal was not inflated. If something does ever happen to the ring, the money you paid will be reimbursed. Then you cna choose whatever you want at the time. You can also increase the covered value over time by having appraisal updates done.

 

[hopefulheidi]

I can totally see your point. Guess I''m just a worrier. I waited SO long for this ring and I love it so much that I don''t want to even have to think about anything bad happening to it!

Thanks for the sound advice
~Heidi

 

[diamondseeker2006]

I know how you feel! I really do! Hopefully 99% of us will never need to use the insurance. But it at least covers the amount we paid in the event of a loss. That way, we can enjoy our rings without worrying!!!

 

[kcoursolle]

It''s usually better to have a lower replacement value anyways because most of the time you never end up making a claim and you don''t want your rates to be too high. When I''ve gotten actaul independent appraisals they only come in a tiny bit bigger than the paid amount, but when I get appraisals from the jeweler they are usually inflated more. I think as long as your replacement value is high enough to actually replace your ring, then don''t worry about it. You will probably want to get updated appraisals every few years to make sure your replacement value is high enough as the prices of metals and diamonds increase over time.

 

[denverappraiser]

Talk to your appraiser. It may simply be an error. I agree that a 2ct+ G/I1 ideal is a difficult item to replace in todays market and when the replacement company finds one it’s not likely to be at a bargain price. Ask them how they came about their value. Don’t rule out the possibility that they’re right and that it can be replaced for their proposed budget but ask them to defend their position. It’s part of what you’re paying them for.

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

 

[hopefulheidi]

Date: 1/28/2008 10:16:20 PM
Author: kcoursolle
It''s usually better to have a lower replacement value anyways because most of the time you never end up making a claim and you don''t want your rates to be too high. When I''ve gotten actaul independent appraisals they only come in a tiny bit bigger than the paid amount, but when I get appraisals from the jeweler they are usually inflated more. I think as long as your replacement value is high enough to actually replace your ring, then don''t worry about it. You will probably want to get updated appraisals every few years to make sure your replacement value is high enough as the prices of metals and diamonds increase over time.

That''s actually part of my concern; that the replacement value isn''t high enough to replace my exact ring.

The price at which we actually purchased our stone was lower than others that were available at the time (and it was a much cleaner I1 than any of the others) and our jeweler is quite frankly one of the most affordable jewelers I''ve found so pairing those two bits together, we were actually lucky to get this particular configuration for the original price we paid. We''d be hard pressed to find a similiar stone at a similiar cost and heaven forbid if our jeweler refused to make another ring for us we''d find ourselves spending even more money to replace the setting, meaning even with a pay out from Chubb we''d still have to chip in quite a bit of money to recreate what we are fortunate enough to have now.

It''s not that I want to overinsure or to upgrade to a nicer stone/ring if anything happens to my current piece, I just want to ensure that we have enough coverage to replace what we currently have.



~Heidi

 

[hopefulheidi]

Date: 1/28/2008 10:18:47 PM
Author: denverappraiser
Talk to your appraiser. It may simply be an error. I agree that a 2ct+ G/I1 ideal is a difficult item to replace in todays market and when the replacement company finds one it’s not likely to be at a bargain price. Ask them how they came about their value. Don’t rule out the possibility that they’re right and that it can be replaced for their proposed budget but ask them to defend their position. It’s part of what you’re paying them for.

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

Neil,
Thank you so much for your suggestion. Part of me really wondered if maybe our appraiser was a bit more conservative with his appraisal because he knew we purchased from the Internet and therefore assumed we got a fair deal with no need for a markup to recoup costs. I really enjoyed working with him and as I generally have a very difficult time questioning the authority of others I was hesitant about calling him and "second guessing" his evaluation. Perhaps with your sound advice, and my fiance''s backbone, we can at least contact our appraiser and find out what lead him to his replacement value.

Thanks again. Your reassurance was just what I needed
~Heidi

 

[strmrdr]

make sure that mention of it being eyeclean is on the appraisal and is defined.
Then the chubb agreed value policy is a good idea on a stone like this.

 

[Italiahaircolor]

Hmmmm...this is a tricky one...

Does anyone know if appraisals even reflected how "unusual" a diamond is? I always thought that an appraisal was strictly a business of numbers...and only reflected the price of your diamond regardless of how difficult/easy it is to find another one??

But, if you''re really bothered by his finding, I would address him directly and ask why the number was so low and how he came to that conclusion. I''m sure he has fact and reason to back up his finding and would be happy to educate you on why he came to the conclusion he did. And if you still feel as though you''re not getting an accurate appraisal, commission another one with a different appraiser. The orginal appraiser could be completely off...maybe his misunderstood something, or wrote something down wrong...but I always thought that replacement appraisals did truly reflect the cost of the stone, and if you''re saying that it was within the a few dollars of what you paid for the diamond, then maybe it is accurate...

Also, don''t take the numbers personally. Appraisals never factor in sentimental value...and that is priceless. Hopefully you''ll never even need the insurance...

 

[strmrdr]

anything that effects the value of the stone should be noted and documented in an appraisal.
An eyeclean i1 is worth more than a frozen spit i1 with large visible inclusion so it should be noted.

 

[Tacori E-ring]

Kind of a thread jack but how did you get your AV to do a slide show? So cool!

 

[JandJ]

hello!

hopefully i can shed some light on this situation... i am an insurance claims adjuster... AND i recently had my own claim on my newly aquired ring so i know this from both ends!


an agreed value represents a higher policy premium but a set amount that is automatically paid if the ring is a total loss, regardless of replacement cost.

on the other hand, a scheduled item for a certain amount is scheduled for the replacement cost. the amount that it is scheduled for is NOT considered the replacement cost, but the limit that the policy will pay. for example, you have a ring scheduled for $10k, the determined replacement cost is $8k, you will get $8k... likewise you have a ring scheduled for $10k, the replacement cost is $12k, you will get $10k.

my company utilizes a replacement cost vendor who determines the replacement cost for scheduled items. they are required to find an item of equal or greater value, so in diamond terms they must find you a equal color and clarity graded ring, or they must go up in the disputed category. however, as we all know, not all diamonds are created equal, so this is where documentation is your best friend as the more documentation you have regarding your specific ring, the better as it will help a replacement vendor better find a diamond that is truly a "replacement" for your current one.

all that being said, remember, the amount that you schedule (or "agree") that your ring is worth is the MAXIMUM that will be paid. that means, at minimum, you should have your ring brought in every couple of years to be appraised to make sure that the amount your ring is scheduled for is reflective of the current market.



hope this helps!