INSURANCE APPRAISAL
For insurance purposes, a relative retail replacement value is typical. Since retail values vary from source to source, you may see discrepancies between jewelry appraisers depending upon their interpretation of the market.
How insurance works
Your insurance policy (or agent) will explain your coverage limits and conditions pertaining to jewelry. To your homeowners or renters policy you need to add scheduled property insurance for individually listed items outside of the generic coverage. Art, antiques, furs and jewelry are typical items so listed because they are of significant individual value and/or need detailed descriptions. The premium you pay is based upon the dollar amount listed, usually from an appraisal.
The insurance company’s obligation is to replace a lost item with one of equal quality – spending what it takes, up to the amount scheduled for that item. Because insurance companies obtain discounts from their replacement sources, they end up paying out less than the typical retail replacement figure states. If you opt for a cash settlement, it will usually be at this lower amount. More and more insurance companies are asking appraisers to be conservative in their values which can reduce insurance premiums.
What should I have appraised?
Your insurance policy will state a coverage for unscheduled specialty items such as furs and jewelry. Generally, items worth less than $500 do not require the detailed description and cost of an appraisal. Any single item of over $1000 in value is a good candidate for an insurance appraisal. Items such as an engagement ring appraisal or a diamond appraisal is always a good idea.
If the value of an individual item is $1000 or more, it usually deserves an appraisal and is separately scheduled on your policy. Extra coverage is then purchased and the item is fully covered (usually without a deductable) for replacement with like quality. This is where the real strength of the independant appraisal comes in. With a qualified appraisal, the insurance company has specific requirements for replacement and you have a document to make sure that happens.
ESTATE APPRAISAL
If the purpose of the appraisal is for an estate settlement a fair market value is required. This type of value is substantially less than retail and is a requirement by courts and the Internal Revenue Service for legal purposes. This value would also be appropriate for other legal or tax purposes such as dissolution settlement, charitable contributions and for some criminal proceedings.
OTHER TYPES OF REPORTS
Divorce Settlement/Dissolution of Marriage
This is a fair market value report for an equal division of common property.
Damage Report
This report expresses the difference in value resulting from breakage and estimates the cost of the removal, re-
cutting and resetting of the gemstone, as well as the value of the re-cut gemstone (loss of weight).
Donation
These reports are based on fair market value and are necessary for tax deductions of donated items.
Comparison
This report is for a client who brings in a jewelry or gemstone item to verify its identity and/or quality as claimed by
the seller. Comparison appraisals usually reflect the item at its most common retail replacement value.
Post Loss
This report establishes the value of a previously undocumented item that was lost or stolen. This is a hypothetical
valuation based on information supplied by the client and supported by photographs and a description of the item.
Casualty Loss
This report determines the fair market value of a lost, stolen, or destroyed item not previously documented. The IRS
allows an income tax deduction of some portion of the value with a proper casualty loss appraisal.
As a certified jewelry appraiser, I am able to deliver jewelry insurance appraisal on almost any type of jewelry as well as loose diamonds and colored stones. The following is a partial list of what I offer:
Engagement ring appraisal, wedding ring appraisal, diamond ring appraisal, diamond jewelry appraisal, gold jewelry appraisal, ring appraisal, watch appraisal, antique jewelry appraisal, and vintage jewelry appraisal.
