American Institute of Gemological Research, Inc.

independent jewelry appraisers serving the Denver metro area

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"Avoid a Bad Jewelry Appraisal"  

Most people think that all appraisals on your fine jewelry or diamond wedding or engagement ring are pretty much the same. Once you have your jewelry appraised and the insurance company accepts your appraisal you are set and ready to go, right? Well, yes and no. Yes, your insurance is insuring it once you pay your new premium. However, the insurance company makes sure it’s in a good position because: (1) The burden of proof of the value and quality of the jewelry is on you. (2) They usually have the right to replace or rebuild in like kind instead of writing you a check for the appraised value. Yes, your insurance may be all set, depending on whether the policy is written under a personal article floater or rider,or whether it is swept into contents along with your furniture and other personal property. Your insurance company is bound to pay or give you something, right? It is important to remember that agents, underwriters, and adjusters who work for your insurance company may have differing opinions about the validity of your appraisal. Back to the question of whether you are in good shape once your insurance company accepts your appraisal. No, you may not be in a good insurance position if you have a poorly written appraisal on your diamonds or precious colored gemstone; you may be very disappointed with the settlement. Why leave that to chance when you can have a detailed appraisal on your diamonds, watches, and other precious jewelry in the beginning and avoid a lot of problems in the future? Some people try to use a receipt from the jeweler; others try to find the cheapest appraisal in town and think they are safe. The worst-case scenario may happen when you go to an unqualified jeweler and pay to have your diamond ring appraised only to have your insurance company not accept it because the jewelry is not properly described or the appraiser whose signature appears on the appraisal is not qualified.

Many people think that estimated value is the most important part of jewelry appraisal, after all that’s why your using your time and money to get it done. That is not exactly correct when you stop and think about it. Yes, the appraised value will set your premium, however content is what lives on; while the price will change from year to year, the contents of your jewelry stay the same. That is what counts with the insurance company more than the price. Remember they are going to most likely want to replace the item, and when they do, you'd better have an accurate and detailed description of your jewelry by a GIA or FGA graduate gemologist. Not only should the appraisers be gemologists, but they should belong to a jewelry appraisal discipline such as the American Gem Society (AGS) or the National Association of Jewelry Appraisers (NAJA). The gemologist appraiser that you choose should be independent and have a good understanding of your jewelry in order to properly describe it on a jewelry appraisal.

We’re going to show you how to avoid many of the pitfalls of receiving an inadequate appraisal by outlining what you need in a jewelry appraisal on your diamond rings, watches, pearls, ruby, sapphire or emerald necklaces, earrings, or bracelets. Most appraisals lack many of the following.

Name and Address: The appraisal should usually state your legal name as it appears on your driver’s license or other government ID. Some insurance companies require that the appraisal include the physical address that is on your homeowner’s insurance.

The Purpose of the Appraisal: Has it been appraised at retail, wholesale, fair market value, or liquidation?

The Function of the Appraisal: Is it, for insurance, estate or IRS, taxes or distribution, or contribution?

Photographs: These are especially important on unique pieces of jewelry that cannot be adequately described with words.

Quantity: The number of items being appraised; is it a set or pair or a single item?

Gender: Is it a lady’s, man’s or unisex style of jewelry.

Manufacturing Style: This is very important. Is this just a cast piece of mass-produced jewelry, or is it a complicated and intricate hand-made wedding ring or fashion ring or watch? Is it a one-of-a-kind custom piece of jewelry?

Type of Jewelry: Wedding ring set, fashion ring, pendant and chain, earrings, vintage watch, etc.

Mounting Description: What is distinctive about the mounting? This may include how any gemstones are set.

Metal Description: If the piece is made of gold, what is the color and karat quality of the gold? Or is the piece silver or platinum?

Trademarks: Is there a trademark or manufacturer’s mark? It should have one by law, but sometimes the bench jewelers wipe it out when sizing your ring. If the trademark indicates that the piece of jewelry is by an established designer, this can make a big difference in the estimated value of the piece.

Identification Marks: Is the ring hand engraved or does it have a serial number?

Metal Finish: Does the piece have a bright polish, or a satin, bead blast, or hammer finish? Hand engraving can add to the estimated replacement cost of jewelry.

Condition: The condition of the ring at the time of examination.

Narrative Description: This should include an overview of the jewelry piece, including how many and what kind of gemstones are included as well as a longer description of the style of the piece. A description would explain if different parts of the jewelry are made of different metals or have unique features. The description should also include dimensions of the piece.

Stone Identification: Was there testing or microscopic examination performed,or did the appraiser just guess what it might be? Is the gemstone identified as natural or synthetic?

Stone Treatments: Is the gem treated to enhance color or clarity? This can be normal for some gems and greatly devalue others depending on the market. (Treatment cannot always be determined on a mounted stone.)

Stone Weight: Were the stones weighed prior to setting? Were they measured in length, width and depth to estimate total weight? Did the jeweler just guess at the weight?

Diamond Color: This is generally one of the most important factors in a diamond and is based on the GIA color grading scale which starts at D for absolutely colorless through Z for tinted stones.

Colored Stone Color: Most gemstones other than diamondsare defined as colored gemstones. (One exception is pearls.) Colored stone grading is much more complex than diamond color grading. The color in colored gemstones is viewed as a three-dimensional description: (1) Hue: the sensation of color, for example,blue, yellowish green, purple red, etc. (2) Tone: the lightness or darkness of a gem on a scale of 1 to 10. (3) Saturation: vividness of the color in the stone on a scale of 1 to 6. A slight difference in color grading can make thousands of dollars difference in the price of some gemstones.

Clarity Grading: Clarity is graded differently in diamonds and colored stones, using different terminology in the two groups to describe natural characteristics or inclusions. Clarity is more important in diamonds than in colored stones. The diamond grading scale ranges from flawless to I-3, and it is determinedusing dark field illumination and 10x magnification by a trained gemologist. The clarity of colored gemstones is graded without magnification and varies from eye-clean to severely included.

Cut Grade:The is one of the most important classifications in diamonds and is significant in colored gems. The cut grade in diamonds can make up to a 40% difference in the price of a diamond with the same weight, shape, color, and clarity.

Setting Style: How are the gemstones held in the mounting?

Comments: There should be a place to describe anything that can affect the value of the jewelry not described in the other areas of the appraisal.

Weight: The weight of the item is usually given in grams. This is used to help determine the value of the precious metal in the piece and is also very important for insurance replacement.

Appraiser’s Signature, Name, and Qualifications: As mentioned earlier, the appraiser should be a graduate gemologist with membership in one or more professional organizations.

Terms and Conditions: This should include an explanation of the process used for appraising and a list of equipment used. It may also give more details on the appraiser, definitions of gemological nomenclature, and legal information.

To omit any of these categories in an insurance or other appraisal may cause the owner an improper replacement or other type ofinadequate transaction. This can generally be avoided by not trying to cut corners when it comes to appraisals of your diamonds, watches, or other jewelry.

Warren D. Pressler,GG, Gemological Institute of America (GIA), National Association of Jewelry Appraisers (NAJA), American Gem Society (AGS)

© 2019 AIGR, Inc. Last update: November 30, 2019