9 replies to this topic

[CedarRapids]

I am going to get my loose diamond independently appraised. Is it harder for an appraiser to grade an IF diamond correctly as opposed to VVS, VS, SI, etc.?

If the diamond is indeed IF (GIA grades it this way), it would be nice if the appraiser found that to be true, too. Especially for insurance down the line.

Thanks in advance.

Edited by CedarRapids, 28 August 2011 - 11:14 AM.

[denverappraiser]

No, you cannot grade a mounted stone IF, or even VVS. In your case, the appraiser is going to inspect for damage and use the details of the stone to match it to the cert. Assuming that they determine that it's the correct stone and that it's undamaged, they they stipulate it as IF based on GIA's expertise. That's what you want for insurance anyway. In the case of a loss you want them to replace with a GIA-IF. Period. At that point you don't want to be arguing over the issue of whether GIA was 'right' or not.

[CedarRapids]

denverappraiser, on 26 August 2011 - 01:14 PM, said:

No, you cannot grade a mounted stone IF, or even VVS. In your case, the appraiser is going to inspect for damage and use the details of the stone to match it to the cert. Assuming that they determine that it's the correct stone and that it's undamaged, they they stipulate it as IF based on GIA's expertise. That's what you want for insurance anyway. In the case of a loss you want them to replace with a GIA-IF. Period. At that point you don't want to be arguing over the issue of whether GIA was 'right' or not.

Got it. I understand the strategy/purpose of the appriasal for an IF.


Thanks!

[LaurieH]

Is it harder for them to grade? Maybe. But, considering how few diamonds ARE flawless (internally or totally), as long as they're able to identify it as a diamond, and all their measurements match up to what is on your certificate (because I'm SURE you're buying a CERTIFIED diamond, arentcha? ) they'll have no problem verifying that what you were supposed to get is what you got. Also, most of the time, because the plot acts as a diamond's "fingerprint", and there's really no "print" in a flawless (FL or IF) diamond, the GIA (or AGS, i'm sure does this, too) will usually plot whatever surface feature (Natural, Indented Natural, Polish lines, etc) is notable, and/or inscribe the girdle of the diamond with the certificate number to make for easier identification. But whoever you go to, if they know what they're doing, shouldn't have much trouble with it

[CedarRapids]

Hello again. I wanted to follow-up on this thread which I originally posted a few weeks ago.

I received an independent appraisal and confirmed that the specifications of my loose diamond matched to what was stated in its grading report (AGS).

I have a question about the replacement value (for insurance purposes) stated in the appraisal document. What are advantages and disadvantages of getting an estimate that is on the high side (e.g., double the purchase price)? I presume that I will have a better chance of getting sufficient coverage but my annual premium will be higher.

[davidelevi]

Nope. There are no advantages to you, since the insurance is usually stipulated on a like-for-like replacement basis. This means that what the insurance company is committing to is to replace the diamond with one of like quality (which is why you want to make sure they get the best and most complete description) paying UP TO the price stated. They won't give you money with a few rare exceptions, and most certainly they won't give you the insured sum. If you can find the diamond at $10k, you can bet that the insurance buyer can find it at $10k too - or less. Overinsuring only means you pay higher premiums. Underinsuring can land you into trouble (or even straight refusal of binding a policy). Unless the appraiser believes that you got an absolutely wonderful bargain - and can substantiate that to you, the value should not be too dissimilar from the price you paid (say within 20-30%).

[CedarRapids]

Interesting. Thanks, Davide. So, why did I recieve a replacement value that was double my purchase price? What does the appraiser gain by doing that?

I knew that I would not recieve cash to settle a claim, so I wasn't expecting that. I wasn't sure why the replacement cost was stated to be so high. I found it perplexing and perhaps even disconcerting.

I do think the diamond was a good deal. I revealed the purchase price after I received the appraisal and the appraiser stated so.

I am going to get the ring reappraised and stone re-identified after it is set. Should I request a more reasonable replacement value since this will affect my premium? Unfortunately, the current appraisal will be used to get insurance during the setting process.

[denverappraiser]

It’s a matter of conflict mitigation. People LIKE it when things are ‘worth’ more than they paid, and it pisses them off when they’re worth less. It EASILLY takes twice as long and is twice as stressful to do an appraisal where the client is unhappy with the results. Jewelers get ticked off when things appraise for less than they charged and have to issue refunds and this frustration gets taken out against the appraiser (sometimes justifiably by the way). Referrals drop off or even become warnings to avoid. Direct work from the jeweler drops off or vanishes (most appraisers get most of their work directly from jewelers). Even insurance companies don’t like low values and will call up and ask for an explanation. There goes more time. In the extreme cases they’ll decline coverage on the piece. Now THAT get’s the client’s attention. Only in the jewelry business is it taken as bad news to be told that you got what you paid for and that you paid a reasonable price for it

All that goes away with a nice high value conclusion and with generous grading. Clients are happy, referral business flows, complaints vanish. I know, it’s weird looking from the outside, or even from the inside, but just listen to the ads on the tellly that promise your item is guaranteed to appraise for double your cost or your money back. Sit back, take a Xanax, and by happy in the knowledge that you got a bargain. Who cares if it’s all an illusion and it actually costs you money?

Back on topic. By all means call up your appraiser and discuss their value conclusion and ask them to defend it and, by all means, if it's wrong ask them to reconsider.

[CedarRapids]

denverappraiser, on 14 September 2011 - 04:40 PM, said:

It’s a matter of conflict mitigation. People LIKE it when things are ‘worth’ more than they paid, and it pisses them off when they’re worth less. It EASILLY takes twice as long and is twice as stressful to do an appraisal where the client is unhappy with the results. Jewelers get ticked off when things appraise for less than they charged and have to issue refunds and this frustration gets taken out against the appraiser (sometimes justifiably by the way). Referrals drop off or even become warnings to avoid. Direct work from the jeweler drops off or vanishes (most appraisers get most of their work directly from jewelers). Even insurance companies don’t like low values and will call up and ask for an explanation. There goes more time. In the extreme cases they’ll decline coverage on the piece. Now THAT get’s the client’s attention. Only in the jewelry business is it taken as bad news to be told that you got what you paid for and that you paid a reasonable price for it

All that goes away with a nice high value conclusion and with generous grading. Clients are happy, referral business flows, complaints vanish. I know, it’s weird looking from the outside, or even from the inside, but just listen to the ads on the tellly that promise your item is guaranteed to appraise for double your cost or your money back. Sit back, take a Xanax, and by happy in the knowledge that you got a bargain. Who cares if it’s all an illusion and it actually costs you money?

Back on topic. By all means call up your appraiser and discuss their value conclusion and ask them to defend it and, by all means, if it's wrong ask them to reconsider.

Thank you, Neil.

[davidelevi]

CedarRapids, on 14 September 2011 - 01:27 PM, said:

Interesting. Thanks, Davide. So, why did I recieve a replacement value that was double my purchase price? What does the appraiser gain by doing that?

I knew that I would not recieve cash to settle a claim, so I wasn't expecting that. I wasn't sure why the replacement cost was stated to be so high. I found it perplexing and perhaps even disconcerting.

I do think the diamond was a good deal. I revealed the purchase price after I received the appraisal and the appraiser stated so.

I am going to get the ring reappraised and stone re-identified after it is set. Should I request a more reasonable replacement value since this will affect my premium? Unfortunately, the current appraisal will be used to get insurance during the setting process.

Good deal yes, by any means, not least because you shopped carefully - and so will the insurer. 50% discount on "true retail" I don't think you'd get. As Neil points out, it smooths the waters, but it is to no-one's benefit except the insurer.

If you can, have a conversation with the appraiser before you insure the loose stone - if I were an insurance company, I'd be puzzled or even suspicious when I get a first appraisal on an unset stone saying "value: $20,000" and then one on a ring containing the stone saying "value: $15,000".