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Yet another appraisal question...

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kayla17

Ideal_Rock
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Should I insure the ring for the appraised value which would cost me $779 or for the purchase price which would cost me $646?
 

Lanee

Brilliant_Rock
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Jan 29, 2003
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534
I would think if there is a substantial diference between purchase price and appraised value--definetely insured appraised value. If the difference is minimal (a couple hundred) I don't think it would be worth paying the appraised value premium over a long term.

But wait for a response from someone more educated on this type of thing, like niceice or lawgem.
 

Greg G

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Jan 27, 2003
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I went with the purchase price since I think it's fair to get what I paid for it back - at least for the next couple of years. I'd just have to put GoG back to work finding me the perfect stone once again. Once the value starts going up I'll be insuring it based on the appraised replacement price.

-Greg
 

justme

Shiny_Rock
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Dec 5, 2002
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184
Kayla -

Are those annual rates
WOW? either VERY high or VERY expensive items!

Who is the quote from?

I was told if I could buy it at more than 1 location for approximately the same dollars, then I should insure items for the purchase price as it would cover my loss.

Why pay higher premiums for something that in all probablity won't be needed and that you can find for the orginal purchase price?

If your thought is well maybe if I lost/broke/had this one stolen etc. I would upgrade - you'll be further ahead banking/investing the 130 dollars a month "in case" this happens and if it doesn't in 10 years you'll have at least $1300.00 to do with what you want instead of wasting it on a policy you didn't use!

Just my thoughts.

Justme
 

okaynow

Rough_Rock
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Jan 15, 2003
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I was talking to Jewelers Mutual and they told me to use the appraisal because if the store I bought it from goes out of business, or if the dealer can't get me the same deal, then I wouldn’t be able to replace the stone. I say go for the appraised value, unless the appraised value is absurdly high.
 

justme

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Okaynow -

Not arguing with which way to go - but isn't that like asking the wolf to guard the chicken house?

I would expect an insurance agent to want a higher rate. (although Chubb gave me the line below.)

Post does say that if I could find it for approximately the same price in more than one location to insure the ring for the purchase price.

Does any vendor have an opinion as you see the outcome of insurance claims?
 

okaynow

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Jan 15, 2003
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justme,

I do see your logic. Perhaps I would then only recommend insuring it at appraisal value if the appraisal was just modestly over the purchase price. At least this way if you lose your ring, you'll have a little flexibility with where you can get your replacement and how long it will take to get a replacement- a bigger budget may lessen the search time for the replacement.

What about this scenario: What if the purchase price is higher than the appraisal? What if you got ripped and can't return it? Is it possible to insure the purchase price?
 

mike04456

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I would go with the appraised value ***if*** it came from a reputable, independent appraiser. If it came along with the purchase as part of one of those unfortunately-not-uncommon "appraisals" at twice the selling price, I'd want to get a second opinion.
 

dimonbob

Brilliant_Rock
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Hello Kayla 17;

Remember you pay for how much it is insured for.

It is nice to pay $5000 for a diamond ring and it gets appraised for $8000. It makes you feel like you got a deal.
Right? Well you did! But don't go and insure it for $8000.
Also don't insure it for the $5000 that you just paid. You are overpaying the insurance in the first case and you are under insuring in the second case. Tomorrow, you cost of diamonds could go up and also tomorrow the price of gold or platinum could go up.

Pick a number in between like $6500 and you will be covered for several years and not be paying the insurance company too much.

Lets see...home owners insurance, auto insurance for 3 cars (for my wife, son and me), life insurance, medical insurance, home contents insurance, and last by not least an jewelry insurance rider on my home contents insurance. I think the insurance companies have us where it hurts.
 

kayla17

Ideal_Rock
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Hi,
To answer your question justme, those are premiums from Chubb. I think it is more expensive to insure jewelry in NYC. High crime rate, maybe?
I decided to go with the purchase price rather than the appraised price.
I felt that I could do this for now, and in a year or two, change the coverage to insure the appraised value instead.
I asked Chubb to make sure this was possible and they said as long as I had proper documentation, it would be okay.
 

kayla17

Ideal_Rock
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Bob,
Now that you mentioned it, I do have three appraisals on the ring! And they are each completely different.
One came with the ring when I got it and appraised it for $3700 more than what I paid.
Another is from Accredited Gem Appraisers, but for the center stone only and it alone appraised for $9,000 more than what I paid. I don't know how much more the whole thing will appraise for but I am guessing the setting will appraise for an additional $4000, so that brings it to $13,000 more than what I actually paid.
The last appraisal I got was for $1000 less than the actual purchase price, which was kind of dissappointing to me. I had thought the ring would appraise for at least what I paid for it!
So, I have three appraisals! One for less, one for more and one for a lot more than what I actually paid, plus I have the actual purchase price receipt.
So, which one would you pick?
 

claimsjeff

Rough_Rock
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Dec 28, 2004
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From an insurance carriers perspective...... As you have indicated above, we could most likely replace the item TODAY for the same amount that you paid or less. So why pay a premium on an over inflated appraisal. Keep in mind most insurers rely on the appraisals for several years, since it often takes time and sometimes money to continue to get an updated appraisal on a frequent basis. This is an investment, and your jewelry will most likely continue to cost more into the future. Thus the question, do you want to rely on an appraisal that you know will be out of date in a short period of time and the insurer will likely not be able to put you back in the same position or an over inflated appraisal that you are paying a premium on today. I think the answer should be to find a reasonable appraisal that considers the current market condition today and the costs it may be to replace it in the next few years. Good luck!

Jeff A. Mills
Vice President Claims
Jewelers Mutual Insurance Co.
 

denverappraiser

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The key is to be sure you understand what question the appraiser is answering in their report. There are quite a few choices that will result in different valuations. The one that is of interest to the insurance company is “What is an appropriate funding to replace this item with another of like kind and quality in the case of a loss?” This is not the same as “What would Tiffany’s charge for a ring that looks sort of like this one?” and it will probably have a considerably different answer (unless Tif’s made the ring). Insurance companies usually replace in the local marketplace, which may not be where you bought and this can sometimes result in a difference. There is very little merit to insuring for more than it will cost to replace because it increases your premiums and you get nothing in return. Since you are trying to predict future values, it is often prudent to include a small buffer for possible inflation. On the other hand, if you bought at less than the replacement cost, you should be able to retain the benefit of your good bargain.


To answer your question, I agree with mike04456, use the appraisal if it’s been reasonably prepared. I would expand that. If the appraisal isn’t reasonably prepared, get one that is. It can save you an enormous amount of grief at the claims end if you have complete and accurate documentation up front. While you’re at it, check out the insurance on your home and other property, the same rules usually apply. A little bit of work up front will serve you well.


Neil Beaty
GG(GIA) ISA NAJA
Independent Appraisals in Denver
 

RockDoc

Ideal_Rock
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Aug 15, 2000
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2,509
The appraisal MUST be written to address the specific type of coverage that you buy.

NYC has an incredibly high crime rate. Chubb is expensive to insure in NYC. However, Chubb pays you in cash, so you can get the replacement where YOU want. Chubb writes an as agreed/or as valued policy. They also have an automatic 50% increase in the payment you''ll receive if the actual cost to get another stone is higher than the insured amount.


Most of the other types of policies, pay only THEIR COST to replace PROVIDING that the replacement cost to them is less or the same as the stated amount. Most commonly, they will never pay more than the stated amount.

A proper appraisal should disclose all the relevant information and be researched for the value that is appropriate for the method that a claim would be paid.

You may find less expensive insurance companies than Chubb charges- but the coverage will be less than they provide as well.

Get sample policy copies, and read the sections on claim settlement thoroughly.

Rockdoc
 

claimsjeff

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Dec 28, 2004
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Without getting into a serious debate with Rocdoc...I agree in part that you should review the coverages carefully. At the same time why pay for bells/whistles on any product(homeowners, auto, or the policy that is listed above if you don''t need it). That''s the decision the consumer must make. At the end of the day...as the consumer what do you really want. Ie.. if you lost the stone...do you want like, kind, quality back....or the choice to do something else(buy a T.V., pay off loans, or different jewelry) with the money you get. Depending on how you answer the question....it should help lead you to the product you want to buy. I''m the first to admit that insurance is a commodity and buyers beware. Read the label, kick the tire, get all of the information from several sources....before you buy.

Jeff Mills
 

BluePea

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Mar 2, 2005
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51
You should definitely insure for the appraisal value. In my case, the appraisal value is over $1,000 higher than the purchase price, and that is because I have an IF ideal cut excellent symmetry and polish .94 carat stone. Diamonds just under a carat are difficult to find, especially well cut ones with good specs, so it was appraised for a higher value so that if the stone needs to get replaced I can get a stone of at least the same quality, rather than having to accept an inferior one because of availability issues.
 
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