Types of Jewelry Appraisals

The types of appraisals available are, insurance appraisals, estate appraisals, distress appraisals, and one type that is not an appraisal, but an estimate of the value called replacement value.

The first and most prevalent type of appraisal is for insurance evaluation. The idea of an insurance appraisal is that in case of loss or theft, you would be able to buy or have the item replaced at no cost to you. This appraisal is primarily for insurance companies so that they understand the value of your item. This type is a retail replacement cost. That simply means if you go into a retail store, you could replace it or find that item for the price on that appraisal. Just over 80% of the evaluations or appraisals we do are for insurance appraisals. This appraisal is not what you could get if you decided to sell this item.

Estate appraisals are valuations for items in an estate for two different reasons. One, if the estate is large enough, and there are tax ramifications and the second for dividing the pieces amongst the heirs. This evaluation is basically what the estate could expect to recover if they liquidate or sell the item. It is often much lower than the insurance value. It should not be used for an insurance replacement policy from your insurance company.

A distress appraisal is like an estate appraisal and that it is the value you could get if you liquidate or sell any of your jewelry quickly. The value is often slightly lower than the estate appraisal because of the necessary price reduction for the speed of liquidation.

The fourth type of evaluation is the replacement value. This value is established from an old appraisal, sales receipts, and even photographs. It is an estimate of value to replace a jewelry item that has not been inspected or graded physically. We do not use the word appraisal because we are unable to see and evaluate the item. Some insurance companies will accept this replacement value while most do not. It is often used to estimate losses for tax purposes.

Estate and distress appraisals are often difficult for the recipients to understand. I am often questioned why I paid $10,000 for this ring, and you are telling me it is worth $1500 for estate purposes or if I try to sell it. Unfortunately, that is correct. There have been several times when families question that their dearly departed aunts’ ring is not worth anywhere near what they thought it was. Sadly, if they try to liquidate, they will receive far less than any retail or insurance appraisals.