Why do I need an appraisal?

There are three common types of appraisals; Retail Replacement Value, Fair Market Value, and Liquidation Value.

The most common reason for an appraisal is for insurance scheduling. Insurance companies require a Retail Replacement Valuation Appraisal. Most insurance companies offer some coverage (usually $1,000.00 to $1,500.00) for jewelry in case of theft in a standard homeowner’s policy. For better coverage, most insurance companies will want a Retail Replacement Valuation Appraisal of your items. This appraisal should be performed by an accredited gemologist/appraiser.

The second most common appraisal is Fair Market Valuation. Fair Market Valuations are provided in the case of an estate settlement and in instances of buying and selling on the secondary markets.

The third type is a Liquidation Valuation. This is usually done in times of distress. A person may need to liquidate items to obtain cash quickly.

Which kind of appraisal do I need?

Retail Replacement Valuation is used for insurance scheduling and is the most common appraisal needed. The appraisal is used to determine the amount of coverage you may need on your jewelry. The purpose of the appraisal is twofold; first, the value given to the items is used to set your premiums, and the description is used to replace your item if necessary. An accurate appraisal will provide specific details such as metal content, the weight of the item, color, clarity, carat weight of diamonds and gemstones in the item. This will help protect your interest in the item and help the insurance company replace your items as similarly as possible.

Fair Market Valuation can be used for a variety of purposes, including equitable distribution in an estate, charitable contributions, divorce settlement, as well as selling on the secondary market. The best way to determine which appraisal is right for you is to tell the appraiser the purpose of the appraisal. This will determine the type of appraisal you need as well as the correct markets.

Liquidation appraisal. Used when you need to liquidate your assets quickly or the assets of a family estate or divorce.

Do I need to have my appraisals updated and how often?

Jewelry values fluctuate. To ensure you’re covered for the correct amount, update your appraisals every 2 to 4 years. Since jewelry insurance premiums are typically based on the current value of your jewelry. If your replacement values are too high, you could be spending more than necessary to ensure your items. Or the reverse could mean under-insured and may incur additional expenses to replace your jewelry. Don’t forget to inquire about your deductible. Insuring your jewelry for the current replacement value is vital. However, if you have jewelry with large gemstones (diamonds) or designer/branded jewelry, you may want to have the appraisal updated more frequently.

What is the difference between a laboratory report and an appraisal?

A laboratory report is used entirely for the identification and grading of a particular gemstone or diamond. This type of report is for grading and identifying purposes only. An appraisal evaluates the gemstone or diamond and determines the value in the appropriate market. The two are often used together as the appraisal uses the report to translate the quality into a value.