Purpose and Essential Elements of Jewelry Appraisals

Jewelry appraisals serve a specific purpose for those who collect jewelry. In this article, you will learn all about that purpose, as well as the essential elements that comprise an appraisal.  

About Jewelry Appraisals

Appraisals differ from grading reports and diamond certificates. For one thing, jewelers or independent appraisers perform appraisals not just on gemstones, but on an entire piece of jewelry. By comparison, specialized laboratories, like those at the Gemological Institute of America (GIA), assess only gemstones. In addition, appraisals are conducted in an office or workshop setting, under natural or incandescent lighting. Appraisers have some tools available for assessing gemstone qualities, but they do not use all the specialized lighting and tools that a gemological laboratory uses. An appraiser pays primary attention to the physical characteristics of the jewel, as well as the condition and craftsmanship of the setting, the metals, and each of its gemstones. With the information he gathers, he writes a detailed description of the piece. Additionally, he determines its quality and value (either fair market or replacement value). He notes all of his findings and what he used to determine his conclusions in a signed document on official letterhead for the jewel's owner.  

The Purpose of Jewelry Appraisals

Several reasons compel jewelry collectors to seek an appraisal of their jewelry. The primary purpose is to verify a jewel's value for insurance purposes. Jewelry appraisals also aid the estate planning process, and they provide a basis for jewelers to set their prices. Finally, during a divorce or division of property, an official appraisal provides each party with a fair market value for any jewelry divided between the separating spouses. Insurance replacement value proves the most common reason to obtain an appraisal. Insurance adjusters use an appraiser's report to recommend coverage amounts for a specific piece of jewelry. Since the price of insurance premiums directly correlates to the appraised value of a jewel, these documents prove essential in determining coverage, premiums, and replacement value. (source) Additionally, the detailed description offered by appraisers aids in the identification of jewels recovered after theft. In similar fashion, an appraisal aids in proving ownership of a particular piece.  

Elements of a Jewelry Appraisal

A Detailed Description

In the description, an appraiser describes in great detail the physical characteristics of the jewel in question. He pays close attention to the visible and measurable features. These include hallmarks, metal and gemstone quality, weight, and composition of materials. Gemstone quality factors specifically include cut, clarity, and color, as well as information about the rarity and special qualities of each stone. Oftentimes, appraisers estimate carat weight, unless they obtain permission to remove the gemstones from their mounts. Descriptions must include sufficient details and specifications to aid in the identification of the jewel in question.

Value

Of course, an appraisal includes a value for the item in question. The value must match the current fair market value of the components comprising the jewel. If an appraiser estimates a value too low, the insurance company may offer the owner insufficient funds to replace it with a comparable piece. Conversely, if the estimated value proves higher than its actual value, insurance companies charge more expensive premiums. (source) To justify the stated value, the appraiser must disclose all assumptions and limiting factors. For example, the report must include the addition of sales tax in the value, as well as any treatments of the gemstones. Treatments include any measures taken to enhance the stone besides cutting and polishing. For example, oil added to fill in surface cracks and heat treatment to alter color. The Federal Trade Commission requires the disclosure of nearly all such gemstone enhancements, and appraisers must identify and report all noticeable treatments.

Additional Elements

Other elements of an appraisal include the date, the name and contact information of the appraiser, the statement of purpose, and a photograph of the inspected jewel. In addition, they might include any aids to identification, including laser inscriptions or plot maps of the gemstones. Of course, the fine print includes all disclosures, as well as the credentials of the appraiser and the names of those who assisted in the creation of the final document. Finally, the appraiser signs off on it with his signature, and files the report with his agency. The agency then issues a copy to the jewel's owner. If you plan to carry insurance on your jewelry, you will need to acquire a jewelry appraisal. Feel free to contact us with any questions you may have about finding a reputable appraiser to assess your collection. ~Angela Magnotti Andrews