Expected variance of paid amount vs appraisal re. engagement ring

[cycosis]

First time engagement ring purchaser (hopefully last).

I have paid X amount of dollars for an engagement ring. It was a custom design and its awesome. I went and picked it up yesterday and I was given the rock's GIA certification as well as an appraisal. What surprised me was the the appraisal amount was over double what I paid for the ring. Is this typical? Wouldn't that jack up my insurance if I decided to insure the ring?

[macman64]

When I bought one it was a similar situation. If you setup your home insurance policy it should be covered by that. In the grand scheme of the insurance it isn't that high of a value.

[gwill]

I've always wondered about appraisals of jewelry at auctions. I guess if an engagement ring is being valued at twice that amount then it would be as bad at an auction. I would double check your home insurance policy before assuming anything. They can set stupid limits in areas you weren't expecting... Or in the off chance of a robbery you can be under insured for certain criteria.

Still curious about anyone who's familiar with appraisals. Why do they come out to be so much higher?

[rob the knob]

it is a scam of jewelry industry to make you spend more


IS YOUR JEWELRY APPRAISAL VALUE TOO HIGH?
WHY DOES YOUR JEWELRY APPRAISAL APPRAISE AT SUCH A HIGH VALUE?
Posted on June 2, 2008 by Richard Scott | 0 Comments





Why is your Jewelry Diamond Appraisal Value too High?
Jewelry Appraisals are a Confusing Thing!

Say for Example you Bought a Diamond Engagement Ring that Retailed for $9,000, and you Paid $5,000 for it.

$4,000 More?

The Appraisal that the Jeweler gives you States it’s Worth $,9000. (What it Retailed for.)

Why are Jewelry Appraisals Appraised at the Full Retail Value?

Is there a Need or a Reason to Appraise your Jewelry much Higher than what you Paid for it?

Because that also means that you’re going to have to Insure it for that $9,000 Price instead of what you Paid. That’s a Big Difference.

So Why is this?
The Only Real Reason:

Because it Looks Better on Paper and it makes you Feel Better.

You’re going to Think that Diamond Ring is Worth a lot of Money. You’re going to Think you got a Really Good Deal. But the thing is, no one would Ever Pay that Full $9,000 for your Ring. Why would they? You didn’t!

Jewelry Appraisals list Cut, Color, Clarity and Carat Weight, a Detailed Description and of course the Retail Price.

So is the Retail Price Fraud?

When you Bought it did you think “Boy, I really got a Good Deal“?

I’ve never been able to understand why Appraisals are Marked up so High. You can’t Sell it for $9,000. Even if you Lose the Ring or the Ring gets Stolen, Insurance Companies won’t even Pay $9,000 for that Ring. They’ll get Real Cheap Replacement Values from Local Jewelers and Replace your Ring… and chances are they’ll Pay Less for your Ring than you did.

This is because Jewelers give Insurance Replacements a Better Deal because they bring them a lot of business.

Isn’t that Crazy?

So what happens is, you’re Paying Insurance for a $9,000 Ring that the Insurance Company will be able to get for $4,000 (again, just a Rough Example). Ha! What a Rip Off! Sad, but True. It sort of makes that Appraisal Worthless. But then again, Insurance Companies insist on them.

So what Can you Do?

You’re Paying for a $9,000 Ring and only getting $4,000 for it???

Tell the Jeweler doing the Appraisal to only list the Value as what a True Replacement value would be (Plus a little bit more for Taxes and Inflation).

NOT the Retail Price!

That way you’ll get Enough Money to Cover your Ring if it’s Stolen or Lost, and in the meantime, you don’t Pay some Astronomical Inflated Jewelry Values for nothing.

It only Sounds Good!

That Inflated Value may Sound Good. It may make you think you Got a Hell of a Deal and a Steal. But if you’re Paying way more to Insure your Ring because of it’s Exaggerated Price, then you really aren’t Saving any Money now are you? Chances are, you’ll Pay More!

So have the Jeweler Keep the listed Jewelry Price down, that way you won’t Over Pay with Insurance Costs and your Jewelry Appraisal will be Accurate, Fair and give you a Better Idea of what the True Value of your Jewelry is!

[rob the knob]

more


Jewelry Appraisals - The Cold Truth

Here it is, short and to the point! You can not sell your diamond or jewelry for the face value of an appraisal done for insurance purposes - ever.
Understanding Appraisals

When you are looking to sell your house or condo, you have an appraisal done by a qualified home appraiser. The value they come up with will be very close to the selling price you should expect to sell your home for.
Nothing could be further from the truth in the jewelry industry. Most appraisals in the jewelry industry are 'insurance appraisals', which are normally given values of approximately 100% above retail. These appraisals are inflated, and do not represent the actual value of the jewelry.

Jewelry stores will often provide you with appraisals at double the sale price. They supply an appraisal for $10,000 when they are selling the jewelry for only $5,000.

Buying at half of the appraised value, what a great value! You must be making a profit of $5,000!

Of course not, if the value really is double why are they selling it for half price?

Who wins by issuing appraisals high values?
Insurance companies win when they charge high insurance premiums on an item that actually has much lower replacement value.
Jewelry stores win when they use inflated insurance appraisals as a sale tool, giving the buyer a false sense of value.

Jewelry Appraisals - Reality Bites

Now you have your used jewelry, you paid $5,000 and have your appraisal that says it is worth $10,000. When you go to sell you want to sell it for as much as you can.
When you approach a diamond buyer, they are going to offer you below wholesale value for your used diamond and jewelry. As an example if you paid $5,000 and your insurance appraisal says it is worth $10,000 you might be offered an amount in the range of $2,500 - $3,000.

The difference from the offer price, and the price originally paid is the markup the jewelry store placed on the item - their profit.
Remember the $10,000 value is an inflated value - it does not represent a realistic value and you should never expect anyone would pay you that amount.

Getting A True Value

If you are looking for a third party opinion regarding the value of your diamond, you can take it to an appraiser. However, do not simply ask for an appraisal or you are going to get the 100% above retail value which is highly inflated.
When you want to know what the jewelry is really worth, you need to ask your appraiser for the resale, cash value or even liquidation value. An appraiser will then tell you what you should expect to receive from a cash diamond buyer or estate buyer such as ourselves.

[cycosis]

^Awesome info thx. I'm going to take in my receipt, not the appraisal to my insurer.

[Star1995]

This and a lot more can be found with a simple Google search.

Do yourself a favor and Google Debears scam, or any variance of that and start reading. Unfortunately too many people have been brain washed into thinking you must buy her a diamond or someone will think you're either cheap, you must not love her that much or you're just a bad person.

As for the appraisal, it's all part of the scheme you've already drank the Kool-Aid so either start reading and beat yourself up for falling into the trap or stop right now and keep living in the dream world... Don't ask too many questions unless you're ready to reveal the truth.

Hopefully you only got sucked into the diamond scam and not the "White Gold" scam...

[cycosis]

Actually I did get taken care of quite nicely by a long term family jeweller. Ive had the rock appraised by several other sources and I know I got a fair price on it so Im not concerned. I also didn't blow any ridiculous budget. I was genuinely just curious about why the appraisal paper was so much more.