I saw the assessment of that 1.33 carat ring that I wrote about a
few days ago! It was written by a jewellery store owner, he wasn't
even licensed to write that appraisal!
Actually, in the US there is no such thing as a license to appraise
jewelry. There are very few governmental regulations concerning
insurance replacement appraisals, other than it is unlawful to use
one as a sales tool or as a means of committing fraud. Some insurance
companies require that a GG (someone who has earned a Graduate
Gemologist diploma from the GIA) sign off on any single item valued
at over $25,000, but from my experience, even that’s rare.
Just for what it’s worth, a GG diploma means that the individual has
met certain requirements concerning their ability to identify and
grade That’s it. There are no lessons about mountings,
craftsmanship or metals. There is not a single word in the entire
course about how to determine value. Someone with a GG diploma can
tell you all about crystal structure and aventurescense, dichroism
and birefringence, but unless they have specific appraisal valuation
training given by some other group like NAJA (National Association of
Jewelry Appraisers) or AGS (American Gemological Society) or another
similar group, or they have many years of jewelry experience, they
are no more qualified to assign a value on a jewelry replacement
appraisal than anyone else.
friend/agent can now see what is missing! As this is a 'closing of
an estate', I told him to tell his aunts that they won't see the
$55,000 as they expected.
You’re right, Gerry. They probably won’t see much over one tenth of
that for that stone. There are three basic types of jewelry
appraisals. Insurance replacement value, estate value (which should
have the exact date for which the value was determined, usually the
date of death of the owner) and fair market value (which should have
an expiration date, usually one month from the date of the
appraisal). The text in these appraisals will be more or less the
same, but the values will be different. In many, if not most cases, a
The value assigned on an insurance replacement appraisal has only
two purposes and they are both intended for use only by the insurance
company. The first is to set the premiums that the insured will have
to pay, usually based on a percentage of the appraised value. The
other purpose is to set the maximum liability of the insurance
company in the event of loss or damage. Those are the only legitimate
uses of the value listed on an insurance replacement jewelry
Using an insurance appraisal to determine market value is like using
the monthly payment sticker on the window of a new car to determine a
fair selling price for a five year old car. They are totally
unrelated and are arrived at using completely different criteria.
That’s why it is illegal for anyone to use an insurance replacement
value appraisal for any purpose other than procuring replacement
insurance. If the dollar amount on a replacement value appraisal is
even mentioned during a sales presentation, even if it’s between two
next door neighbors neither of which is in the business, the seller
has probably violated the law.
While the appraisal you quoted is not rich in detail Gerry, it
really isn’t all that bad, except for the value of $55,000 (there’s
gotta be something more to that story). I’ve seen much worse. I’m
working on an insurance replacement of a lost diamond right now with
an appraisal that makes that one look pretty good. How about this -
"Lady’s ring, 14K yellow gold set with two round diamonds - $5000."
Signed by a “professional independent appraiser"with"GG” after his
name no less. At least the one you’re talking about gives a color
range, clarity range, measurements and carat weight of the most
valuable part of the piece.
I think you might be being a little bit hard on the insurance guy
(in your first post anyway), he’s an expert in insurance products and
in helping people figure out what type of coverage they need, not in
evaluating jewelry or the quality of jewelry appraisals. I think he
could be afraid that it might be considered a conflict of interest
for him to get involved in the liquidation of assets, especially if
the selling price is to be determined in any way by the insurance
coverage his firm wrote. That’s not really his job and if anyone
wanted to get ugly about it later on, he could be in real trouble if
that $55,000 figure is ever mentioned to a potential buyer. He may
not know much about jewelry and appraisals, but I’ll bet he’s aware
of that little pothole.
For anyone that wants to be more informed about appraisals, I would
recommend consulting NAJA or finding a NAJA member appraiser. There
are so many misconceptions that people have about appraisals, it’s a
little bit frightening. What’s most frightening is the number of
people in the jewelry trade that are really misinformed about the
whole appraisal business.