Appraisals serve many purposes. Clients often ask, “What is it worth?” We ask, “For what purpose?”
A piece of jewelry or fine timepiece may have many different values according
to the purpose of the appraisal. I have listed below different types of appraisals.
•Replacement Value for insurance scheduling
•Fair Market Value for estate tax determination
•Fair Market Value for divorce or equitable distribution
•Fair Market Value for charitable contribution
•Cash liquidation value (for quick sale)
•Orderly liquidation value (broker, auction or independent
•Market comparison for pre-purchase appraisal/consultation.
Are you getting a fair deal?
Is my jewelry covered under my homeowner’s insurance policy? And can I buy insurance on my jewelry alone?
This is something that you will need to discuss with your insurance
agent. Most companies require that you carry a homeowner’s policy, and will not
write a policy for jewelry alone. At least one company (Jeweler’s Mutual
Insurance Company) sells a policy specifically for jewelry. Information is
available from Jeweler’s Mutual participating jewelers or directly from
Jeweler’s Mutual at (888) 884-2424.
As a general rule, items of limited value are covered under
a blanket clause in most homeowner’s policies. Keep in mind that such coverage
also includes computers and TV’s and numerous other items. It doesn’t take
much to exceed the policy limit. Usually, jewelry of significant value will be
insured under a rider purchased separately, and must be listed and appraised
piece-by-piece. A policy may also list certain restrictions (deductibles,
depreciation, terms for filing a claim, etc.). It is important that you discuss
all of these matters with your insurance agent and learn the specifics of your
Most insurance policies provide for replacement of the lost, stolen or damaged item rather than monetary reimbursement. In the event of a claim, a professional insurance appraisal will provide the insurance underwriter with a complete description and analysis. Specific criteria must then be adhered to when the insurance company replaces the item. In addition, jewelry and gemstone prices are volatile.
What information should I bring with me?
An appraisal is considered a legal document. Therefore an independent appraiser should not rely on someone else’s work even if the item has been previously appraised. We start with a clean slate. The only information that will be helpful to us is a mounted stone’s exact carat weight -- if known (possibly listed on a sales slip that you may have). By taking measurements and using mathematical formulas, we can quite accurately determine the carat weight of a stone, without removing it from its mounting. A sales slip or other documentation is useful for verification.
If your first appraisal was performed by the same jeweler, by all means bring in the paperwork with your jewelry. In this case the appraiser will verify that the
item is still as described in the original report, and update the information
within a new document. The appraisal fee is reduced substantially, since most
of the work has already been performed.
An old appraisal could leave you substantially underinsured.
Appraisals are written to be valid for a limited period of time. Some markets are extremely volatile. Prices for certain colored stones for example, can change dramatically from year to year. Values of certain other items tend to fluctuate with the inflation rate. The Insurance Institute of America recommends having your jewelry appraisal updated every two years.
Michael Fischer is the owner of Prime Time Fine Jewelry located in Solana Beach.For more information, please call, 858. 259.1819 or send an email email@example.com.