A Guide to Jewelry, Diamond & Engagement Ring Appraisals

Jewelry appraisal is an important function within the jewelry industry. It has three main purposes. First, some insurance companies require an appraisal in order to issue a personal jewelry policy. The second purpose is verification/consultation of a prospective purchase. And finally, some people may have inherited or been gifted items that need to be identified and valued. In order to make the right decision as to whether you need an appraisal and what kind of appraisal you need, it is important to understand the process and options fully.

It may be surprising to learn that diamond and jewelry appraisals are not regulated. That is, anyone can render an opinion and charge a fee. There are no credentials required, and no safeguards in place to prevent conflict of interest. And accordingly, almost all appraisals will contain some form of legal disclaimer.

Therefore, it is up to the consumer to determine the value of the opinion they are accessing, and what should and should not be done with the results. And that is sometimes difficult to determine, especially for someone new to the jewelry world.

The key is to understand what you wish to accomplish by taking a piece to an appraiser in the first place. For most people, it is for the purpose of verification and for obtaining an insurance policy. That process is a fairly straight forward. However, there are still qualitative differences between appraisals. Consultation appraisals where the consumer is seeking information and advice about a purchase (or a prospective purchase) is another level altogether. In that case the qualifications, experience, and reputation of the appraiser are absolutely paramount.

Jewelry appraisal fees vary widely. Rates depend on things like number of items and required level of documentation. For example, if you want the appraiser to do a stone plot for your diamond rather than simply inspect and verify a diamond against a lab report containing stone plot, the work will take longer and cost more. Similarly, if the item is signed or antique, it may require extensive research to determine authenticity and value.

On the other hand, if all you want is a quick verification and a verbal opinion on an item, such as one you are considering purchasing, many appraisers will provide this level of service for a reduced fee.

Many appraisers will allow you to wait while the work is being done so that you do not have to leave your valuables and they do not have to take responsibility for them. If you have many items, it will require more time and it may be necessary to leave them in the care of the appraiser until the work can be completed.

Some appraisers will come to your location. They will bring an assortment of instruments and equipment and perform all work on your premises. This is particularly helpful if you have very expensive items that you don’t feel comfortable traveling with, or have limitations in terms of traveling. There will be an extra on-site fee for this level of service.

Before hiring any appraiser, research their credentials and reputation and have a full discussion with them about the scope of work you require. If leaving your valuables in their care, verify they have insurance to cover any losses.

Most appraisers will provide an alternative to a formal documented appraisal. At a reduced rate many will perform a verbal consultation. This may involve some of the same gemological evaluations that a full appraisal entails, but may be less comprehensive and will not involve documentation.

Every appraiser is different in the levels of service they provide and the associated fees. Before deciding on an appraiser and a format for your evaluation, have an in-depth conversation about services, fees and credentials.

There are many occasions when an appraisal is needed on a loose diamond or gemstone. Since many modern shoppers are buying loose diamonds online and having them set locally, there is a growing demand for diamond appraisals. In many cases these are diamonds that are already accompanied by a laboratory report (certified diamonds), but the consumer needs their identity and value to be verified. In some cases this may involve only a verbal consultation. In other cases the diamond or gemstone may not have a lab report and therefore require a more in-depth testing and evaluation on the part of the appraiser.

As mentioned earlier, there are no strict credentials required to do jewelry appraisals. One might think that you need to be a graduate gemologist or have some sort of advanced training, but that is not necessarily the case. While there are highly educated appraisers who possess full accreditations, other appraisers may actually be very new to the business and have no formal training at all. So depending on what you are trying to accomplish or what requirements your insurance company may have, you need to be aware of the credentials of your appraiser.

If your item contains a diamond or gemstone that represents the majority of the value of the piece such as a solitaire engagement ring, an appraiser with gemology credentials is highly recommended. A GIA Graduate Gemologist, an AGS Certified Gemologist or an appraiser with the title FGA are the top credentials to look for.

Appraisers who are members of the top trade organizations such as the American Gem Society (AGS) are most likely to be both competent and ethical. The AGS has designations for Certified Appraiser and Certified Appraisal Laboratory.

Members in good standing with other respected organizations such as the NAJA (National Association of Jewelry Appraisers) or American Society of Appraisers (ASA) are likely to be very qualified. They will be trained in both modern and antique jewelry valuation. You should be able to verify the credentials of an appraiser with the organizations themselves, or to find qualified appraisers by going to their websites.

Most appraisals are based on the concept of “fair market value”. This is an opinion of the retail replacement cost of an item on the retail level where neither the buyer nor seller are under any duress to buy or sell.

Another type of appraisal is based upon liquidation value; the price at which an item can be expected to find a buyer immediately without much effort. These values are significantly lower than fair market value.

There are other appraisal designations. Whatever the basis for the valuation it should be clearly stated in the appraisal document.

One of the most common types of appraisals is the diamond engagement ring appraisal. Typically the engagement ring is an expensive item featuring a center diamond of high quality. It is also an item that is purchased by a young person not well acquainted with jewelry, so the validation of the purchase is a big motivator. Also, since it is commonly one of the most expensive purchases made by most young people, there is plenty of incentive to take out an insurance policy on the item. While not necessarily required by some insurance companies (see link below to Jewelers Mutual), a current appraisal is required by many.

Because the appraisal business is largely unregulated and valuations are just “opinions”, there are some trade practices that are questionable or unethical. One of those practices is to use a high appraisal as a selling tool. This can be a highly misleading or even blatantly deceptive practice. If a seller is pitching the value of their item based upon its appraisal value, it is an indication that something unethical may be at play. A buyer should always weigh the purchase in terms of what comparable items are actually being sold for by reputable companies, and upon verifiable attributes and product quality - not because someone presents an inflated appraisal to make it look like the world’s greatest deal. With fine jewelry, when things appear too good to be true they usually are!

Potential conflicts of interest are very common in jewelry appraisal. An appraiser who is also buying and selling jewelry has a built-in conflict of interest. They may be inclined to undervalue an item or otherwise find fault with it hoping to be able to make a sale of their own merchandise. This may not be the case, and many appraisers associated with jewelry stores will avoid any such unethical behavior. But it is important to consider this possibility. For this reason you are always better off to choose a qualified, independent appraiser whose sole business is appraising, and is not in the business of buying and selling.

Whiteflash does not do jewelry appraisals. Not because we don’t have the credentialed experts on staff, but because we want to avoid any appearance of conflict of interest. In the past we have contracted with a local appraiser in order to accommodate customers needing this documentation. Even this did not feel arm’s length enough for us, and we subsequently implemented a technology solution in partnership with Jewelers Mutual Insurance Company that enables our customers to conveniently obtain insurance quotes, and to bind coverage if they so choose, at the time of purchase without having to get an outside appraisal. More on this option below.

Because we serve a nationwide clientele we have put together a list of independent appraisers located in different cities around the country. We have vetted these appraisers for their credentials and their reputations in order to point visitors to qualified professionals local to them. We recommend these appraisers and welcome feedback from our customers who use them.

As mentioned above, we have implemented a solution for Whiteflash customers to obtain personal jewelry insurance from one of the premier jewelry specialists in the nation. We have long recommended Jewelers Mutual to our customers looking to insure their jewelry purchases, and have now integrated into our website a functionality that makes it super easy to get coverage which does not require a separate appraisal.

After you make a purchase from Whiteflash you will receive a link that will enable you to go to the Jewelers Mutual website to get a quote. The details of your order will be automatically sent to Jewelers Mutual enabling them to give you an instant quote. If you decide to purchase the coverage, you can do so at this link and coverage will be bound immediately. Most customers find the quotes to be very competitive with other quotes they receive and many of our customers do take advantage of this convenient way to obtain protection for their new purchase. This also removes the time, effort, and money associated with getting an outside appraisal just to be able to obtain insurance.

An expert jewelry appraisal done by a qualified, independent jewelry professional can be indispensable in certain situations, and more than worth the price. It is important to evaluate your particular circumstances and options in order to determine if the expense of an appraisal is necessary.

Many insurance companies require a current appraisal in order to issue a personal jewelry policy. Others may not. Since jewelry appraisals can be expensive and involve some time and effort on your part to obtain, it pays to consider your options.

When deciding to get an appraisal, choose an independent appraiser with experience and credentials, and one who is not buying and selling jewelry, in order to avoid potential conflicts of interest.

For other questions about jewelry appraisals feel free to contact one of the friendly and knowledgeable diamond and jewelry consultants at Whiteflash. For questions about personal jewelry insurance we recommend you contact the specialists at Jewelers Mutual.