I regularly see two mistakes that are made. One, the client asks for the value to be inflated and two is a complaint about the cost of the insurance. Today, the insurance companies have the buying power and the knowledge to replace any piece of jewelry at its exact value. Therefore, to overvalue a item of jewelry will give you a bigger insurance cost without any advantage. The insurance company bases the replacement value at the wholesale level, not the retail level. Therefore, please keep this in mind if unfortunately you have a loss.
Some insurance companies will pay the amount that is written on the appraisals. And, some will only offer the wholesale value and then direct you to a jeweler that can replace your item and give you the choice of replacement or accepting the wholesale value in cash.
Finally, some insurance companies will pay replacement costs on your diamond ring appraisal even if the item costs more than value put on the appraisal. Please remember to get the answers from your insurance agent so that you are well-informed on this subject matter, and the appraisal you received is done by an experienced graduate gemologist.
An accurate appraisal is an essential ingredient to owning jewelry.
*Courtesy of David Stern