Diamond Articles

The Reality of Jewelry Appraisals For Insurance

May 25, 2016 - Diamond Articles

Many of our customers have jewelry appraisals for insurance reasons for their diamonds or jewelry that they are looking to sell. While these are useful when it comes to insuring your items, they are not as useful when it comes to establishing their second-hand value. Unfortunately, the price stated on these can be misleading and create false expectations.


Why is the price on my jewelry insurance appraisal not the resale value?

Jewelry appraisals for insurance purposes are just that. It covers the cost of replacement in the event that something should happen to your item. But it’s important to bear in mind that these are inflated values that do not reflect resale value of your goods for the following reasons:

  • Insurance values are higher than retail value (up to 100% above retail)
  • Second hand values typically range from 20%-50% of retail value

It simply does not add up. The reason insurance appraisals are inflated is that it allows insurance companies to charge high insurance premiums for items that have much lower replacements values. Replacements are not at 100% of insurance value. Jewelers also benefit as they can use this as a selling point: high insurance values reassure buyers that they are getting a great deal.


Infographic - jewelry appraisal for insurance reasons


Moreover, even if the stated price had been accurate at the time it was issued, the diamond, jewelry and luxury watch markets fluctuate over time. Fixing a price on these items is an impossible task as they are dependent on demand and as such do not have set values. The price at one point in time does not mean that it will have that same value the following week, month or year.


How reliable are jewelry appraisals for insurance?

When it comes to diamonds, the grading’s detailed on an insurance appraisal are issued by a jeweler and not by a laboratory such as the GIA or AGS.

Jewelers do not apply the same grading standards as a laboratory, they have less of a scientific approach and typically give a range of color and clarity grades (i.e. G-I color). Jeweler issued appraisals are notoriously variable and not audited by any third party. As such, these grading’s cannot be considered accurate but should instead be treated as a guide.


jewelry appraisals for insurance


What is the most reliable paperwork for my diamond?

When it comes to selling, the reality is that:

  • Any form of paperwork is helpful in establishing the characteristics of your item
  • None will be able to provide you with the resale value of your item

Appraisal documentation will list the core information needed for an expert to establish a price range without seeing it in person. Some types of paperwork are more useful than others as they include more accurate information and more detailed description.

The most dependable source of information for any diamond is a GIA certificate. The most respected laboratory in the industry, the GIA (Gemological Institute of America) provides trustworthy, detailed and accurate certificates.

However, insuring your jewelry is always a good idea, especially when it comes to high value items such as diamond engagement rings. This way, if your jewelry becomes damaged or lost, you can file an insurance claim.


How can I find the true value of my jewelry?

Simply put, the only sure way to determine the second-hand value of your items based on today’s market prices is to consult an expert. You can receive a free price quote by filling out our online form. To then receive a firm and final offer, either  schedule an appointment or send your item in for valuation.

We provide free, fully insured shipping to our headquarters in New York and offices in the UK, Tokyo and Hong Kong. We buy diamonds, luxury jewelry, watches and handbags and work with customers around the world. As an A+ BBB rated diamond buyer with hundreds of online reviews, can be sure that you are working with a reputable and trustworthy company.

While jewelry appraisals for insurance reasons are useful as they provide some insight into the characteristics of the piece of jewelry, they do not reflect the true second-hand value. Being aware that the price stated on your insurance appraisal is not what you should expect to receive is important when looking to sell your items.

Bio: Written by one of our diamond, designer jewelry or luxury watch experts. With over 150 years of combined experience, our experts are able to comment on trends, share industry knowledge and provide diamond, designer jewelry and luxury watch education.

What To Do Next

Related Articles
Diamond Articles: GIA Diamond Grading 

Since their opening in 1931, the GIA (Gemological Institute of America) have quickly established themselves as the foremost authority in gemology and become the industry standard in gemological sciences. The...


Life after divorce can initially feel difficult to navigate. There are a plethora of emotional and financial implications. You may be facing difficult choices such as whether or not you should consider downsizi...


Tiffany jewelry has long been an iconic brand renowned for impeccably crafted diamond rings. But when it comes to selling a Tiffany engagement ring, there are a few factors to be aware of. Once you have worked...

We guarantee the safety, security, and privacy of your valuables

We're Proudly Accredited By

Better Business Bureau Logo
  • NPA Logo
  • JVC Logo
  • Better Business Bureau Logo
  • Jewelers Board of Trade Logo