2. I received an appraisal when I bought my jewelry. Why do I need another?
An appraisal, by definition, is the average of what an item would sell for in a particular area. If the selling jeweler prepares the document, the value isn’t necessarily based on market research, but rather on what he/she feels the item should sell for. (Legally, this should be called a “Documentation of Sale,” rather than an appraisal; as such, it should state the price at which the item was sold.)
If this “appraisal” states that the item is worth substantially more than you paid, (an all too common practice), then the jeweler is doing you a disservice. You will be paying higher insurance premiums just because the jeweler wanted you to “feel good” about the deal.
A typical example: The jewelry store’s “appraisal” claims that a ring is worth $8000. You paid $5000.
Ask yourself this question: “I don’t even know this jeweler well. What makes me special enough to be getting a $3000 discount?”
Most insurance policies provide for replacement with “like kind and quality.” Unless you have a very special policy, you will not receive payment for a lost or stolen item. Rather, the insurance company will give you a replacement ring, bracelet or necklace! You will never recoup that $3000 difference in the event of loss or theft. Do you really want to pay all those extra premiums?
Could an appraisal performed by an independent appraiser result in a valuation higher than the amount you paid the jeweler? Yes, assuming that you did get a good deal (fortunately, a frequent occurrence).
Lastly, a jeweler may not have the training or equipment needed to properly measure the angles, proportions and other characteristics of gemstones. (Our best customers are jewelers!) Such information is critical, especially in an insurance appraisal, if you expect to receive a nearly identical replacement from the insurance company.
