Will valuers value rings for more than what they are worth?

[Kissingfish]

I ask this because I recently picked up my ring from an independent valuer..
I will tell everyone, I paid $6000 for my e-ring.
The ring consists of:

1x .52 F VS2 princess cut diamond, GIA. Can''t remember the specifications. I think it was 4.45x4.43 or something like that. Almost square..
2x .11 P4 Si1 round brilliant argyle pink diamonds

Mounted on white gold.

I posted the picture earlier today.

I thought it was a decent price, and certainly worth it..

The valuer valued the ring for $13000 ..

That is a HUGE increase.. What does this figure mean, exactly?

I will certainly insure it for that amount, but does this mean that
a: I was undercharged
2: Valuers increase value of ring


If 2, would there be an accurate way of knowing how much my ring is actually worth?

 

[Kissingfish]

Sorry, just checked.. The dimension of the ring is 4.46 x 4.42

Still fairly square, right?

 

[denverappraiser]

Ask this to the person who assigned the value,

Any statement of value must contain an element of what something is worth to whom, when, and under what circumstances or it’s not very useful information. This should all be spelled out in the ‘fine print’ of the appraisal report.

It’s certainly possible that you got an unusual bargain or that the appraiser simply made an error but far more likely is that the appraiser is defining value and/or the market in a way that’s different from the way you would. In many cases, what they mean by ‘value’ is ‘What’s the highest price that anyone would be willing to ask at any store anywhere on the planet when they are under no pressure to actually make a sale at that price?’

Certain items, like the pink side stones, can be fairly difficult (read expensive) to replace. If the value being described is an effort to estimate the budget to replace the ring with another like it, they may be assigning an unusually high value for this replacement in anticipation of shopping difficulty if an insurer is under pressure to buy something very specific. This pressure can tend to raise prices, especially for extremely unusual items.

If the report doesn’t say what it means, then it means nothing. Ring them up and ask for an explanation.
Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[oldminer]

The range of possible mark-ups, from the maximum to the minimum has widened over the past 5 years. Retail numbers are all over the place from quite high is a few select places to very low on some Internet sites. An appraiser who does not ask what market the item was purchased in is doomed if a market value chosen is too low. The customer is worried, the seller is going to be angry and the appraiser looks as if they do notknow what they are doing.

If the appraiser is too high, most customers are elated, sellers are very pleased with the amount and the fine appraiser, and the appraiser has no problem getting payment. Life is wonderful!

To do the job right is a whole other affair. To hit the value with reasonable exactness is a very challenging thing to do. A little low, and you''re in trouble. A little or a lot high and nearly everyone loves you. It is a very tough thing to be just right enough to keep the entire process going well.

Today, there are more and more clients who want proper levels of appraisal and insurance coverage. They do not want a "feel good" report and to pay for too much insurance. I agree with this appraoch, but I find few people are yet his well educated. Most still would rather feel good.

It is a balancing act. Sometimes we do it well and other times we fall off the high wire.

 

[RockDoc]

As both Neil and Dave have written, coming up with a value takes a bit of knowledge.

Firstly, what is the stated purpose of the report? How is it to be used?

If it is for insurance purposes, did the appraiser research what kind of policy you are buying, so that the value is relevant to the method by which a claim would be settled by that company, and for your type of policy? In the event of a loss is the replacement value for the insurance company''s replacement source, or do you get to shop for another one, at your source?

Was the value actually RESEARCHED, or did he just estimate a value by just looking, by looking at price guides, or actually comparing market prices charged for comparable items?

The report should state this in detail.

Rockdoc

 

[Kissingfish]

Hi all.

Thanks for your replies.
I got the valued certificate from home last night, so here it is, exactly as it is written:



Albert Simkiss Jewellery Valuations Pty Ltd

Jewellery Insurance Valuators
And Gemstone Consultants


Retails Replacement Valuation for Insurance Purposes

18 ct White Gold tapered half round band ring with curved underbezel and bar channel
set with 1 Princess cut diamond at 4.46x4.42x3.31mm
0.52cts total known weight
Colour: F, Clarity: VS2
Laster Inscribed as per GIA Certificate No: 15295788
And 2 Brilliant cut Pink Diamonds at 3mm 0.11cts each = 0.22cts total known weights
Colour P6, Clarity: SI1
6.70grams in weight
$12,850




Then there is a signature, and some credentials.


Doesn''t say anything else.
On the back, it says:


1. The articles described above have been examined and the values given are an expression of our opinion.
2. Gemstones have not been removed from settings for accurate assessment, all grades & weights are approximate.
3. Whilst all care has been taken in making this valuation, no liability is accepted other than to the person to whom the certificate is given for, any errors or omissions in the certificate, including any liability to any person by reason of negligence.
4. Damage to items will be mentioned, ordinary wear will not.


That''s all.

I don''t know. I don''t like the idea of approximates and opinions..
Maybe it''s just me. Do all valuers work this way??

 

[RockDoc]

Date: 2/15/2007 7:26:54 PM
Author: Kissingfish
Hi all.

Thanks for your replies.
I got the valued certificate from home last night, so here it is, exactly as it is written:



Albert Simkiss Jewellery Valuations Pty Ltd

Jewellery Insurance Valuators
And Gemstone Consultants


Retails Replacement Valuation for Insurance Purposes

18 ct White Gold tapered half round band ring with curved underbezel and bar channel
set with 1 Princess cut diamond at 4.46x4.42x3.31mm
0.52cts total known weight
Colour: F, Clarity: VS2
Laster Inscribed as per GIA Certificate No: 15295788
And 2 Brilliant cut Pink Diamonds at 3mm 0.11cts each = 0.22cts total known weights
Colour P6, Clarity: SI1
6.70grams in weight
$12,850




Then there is a signature, and some credentials.


Doesn''t say anything else.
On the back, it says:


1. The articles described above have been examined and the values given are an expression of our opinion.
2. Gemstones have not been removed from settings for accurate assessment, all grades & weights are approximate.
3. Whilst all care has been taken in making this valuation, no liability is accepted other than to the person to whom the certificate is given for, any errors or omissions in the certificate, including any liability to any person by reason of negligence.
4. Damage to items will be mentioned, ordinary wear will not.


That''s all.

I don''t know. I don''t like the idea of approximates and opinions..
Maybe it''s just me. Do all valuers work this way??

Dear KF

This appears to be from an appraiser in Australia?

Is the 12K valuation in Australian currency? If so, can you convert that to US dollars.

IMPORTANT NOTE: Comments below are made using typical consideration of opinion that apply to common in the US. The laws and types of insurance policies in Australia may be different which would require my researching what your insurance policy terms and conditions are along with applicable insurance regulations if they exist. Gemological and valuation standards are expressed based on common standards by US appraisal and gemological societies.
___________________________

RE: Your concern about "approximate". If the appraiser examiines an item while the stones are set, it is reasonable to state approximate carat weights and measurements. This is a comon and reasonable practice since the appraiser doesn''t have the opportunity to actually confirm the carat weights by actual weighing of the stones on his carat scale. He did however, state an actual weight for the metal weight of the ring.l

Primarilly, the valuation needs to parallel how a claim would be settled by your insurance company. If the company will go to their own source to replace the article at "Insurance Company Cost", and that cost is less than what you''ve insured it for based on the valuation document, the valuation is potentially made in the incorrect market. The appraiser should have discussed the type of policy you are going to get, along with finding out the methodology of how the company would settle your claim in the event of a loss.

If you paid $ 6K, as you stated above, MAYBE you got something worth a bit more. But twice the price? If you intend to insure the ring for the appraiser''s value, you should also provide copies of the receipts to the insurance company of how much you actually paid for the item. In the US, the insured has an obligation to do this. (i.e. policy says something like insured represents that he has presented the insurance company with all facts that would affect the material risk to the insurer). The logic of this is simple: If you neglect tell the insurance that you want to insure a $ 6000.00 item for $ 12,000, you have an incentive to make a claim. That obviously affects their material risk, and many policies have a "back door escape clause" written in the policy which usually is the ability at their discretion to "vacate the claim". This means if they find out you grossly overinsured it without telling them, they can not pay the claim, and just refund the premiums you paid. This is rarely done, but is an option for them.


There is no statement in the document you wrote that refers to the following:

Type of manufacture
Stamping of markings on the item
Quality of the workmanship of the item
Who it was made by, if made by a designer, or someone with a unique design of the item.
Type of polish / finish
Condition of the item ( New, Used etc.) Just simply says "damage" will be noted. If the item was purchased recently, he could say it was in New condition/ Nearly New Condition/ etc.

They refer to the GIA grading report number, but don''t say whether they agree or disagree with the conclusion by GIA.
They don''t state if the pink diamonds are natural, synthetic or if any of the stone were checked for treatments, nor how sure they are of that if not 100% ascertainable ( many times it isn''t ).
It also doesn''t list what equipment was used during the examination.


There doesn''t appear to be any description of what tests were performed for the stones or the jewelry.
There also isn''t a statement of independence attached?

As to the statement with respect to their liability, at least here in the US, the appraiser does have liability to forseeable thrid parties who would rely on the document. The insurance company certainly is relying on the accuracy and facts stated in the report. Many appraisal reports here disclaim ANY liability to anyone, but at least in this document he states he does have some liability to the person he issued the appraisal to.

If he is a member of an appraisal society that has standards for their reports, that should be stated as well noting which groups standards were applied in preparing the report.

While it is commonly assumed knowledge that values do change, an expiration date as to the values should be noted as well. There is no industry standard for this, and would be a personal/business decision of the appraiser, but if not included in the report, one doesn''t have any reasonable explanation of how long the value is "valid".

Rockdoc

 

[denverappraiser]

Date: 2/16/2007 1:36:10 AM
Author: RockDoc

While it is commonly assumed knowledge that values do change, an expiration date as to the values should be noted as well. There is no industry standard for this, and would be a personal/business decision of the appraiser, but if not included in the report, one doesn't have any reasonable explanation of how long the value is 'valid'.

Rockdoc

I actually disagree with this.

Value is a function of a specific item, in a specific marketplace and on a specific date. Assigning an expiration date requires predicting how prices are expected to change in the future, which is normally not the job being asked of an appraiser. Insurance companies will generally require appraisals be updated with some frequency, usually every 2-3 years or so in order to maintain coverage, but it is up to them to decide if a 4 year old valuation is appropriate to determine their liability on a particular contract, not the appraisers.

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