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Why a "Free" Appraisal Isn’t Worth Even That Much.

Could you hand your “free appraisal” to a total stranger and expect them to identify your jewelry in a crowded pawn shop showcase? How about in all of the showcases in all of the pawnshops in your area? If the answer is “not a chance”, then that’s exactly the likelihood of recovering your jewelry or of getting an accurate replacement from the insurance company.

• It's really important to understand that you are insuring an item; not a "value".  The document you provide to the Insurance Company that describe that item are your only legal protection and are the sole basis of any claim settlement. The more vague or incomplete the description is, the better it is for the Insurance Company.

• A common mistake that people make is to use the “free appraisal” provided by the seller to bind their insurance coverage. Or worse yet, they use the sales receipt. They rely on their Agent to tell them if the documentation is okay.  The Agent rarely has the expertise to recognize a good appraisal and will gladly accept minimal documentation. He’s working for the Insurance Company and he knows that providing adequate documentation is your responsibility. The Agent primarily cares about the “appraised value”: it directly impacts your premium and his commission. The description is there to protect you. Does it?

• Does the free appraisal accurately reflect what you paid or did the seller inflate the claimed value to show you what a “deal” you got?  Common sense would indicate that an appropriate replacement value is the amount for which they sold it to you.  Why would you want to pay higher premiums for a phony, inflated value when any claim will be settled based on the description?

• Did the seller try to protect himself by using broad ranges for size and quality? For example, if you submit a document that describes your diamond: “Approx. 1 carat, H-J color, SI clarity diamond”. Is a 0.89 ct. diamond “approx. 1 carat”?  Is it H color, I color of J color?  Is it SI-1 or SI-2 clarity? The price difference between a 1 carat H color, SI-1 clarity and a 0.89 ct J color SI-2 clarity is nearly double. Since you provided an appraisal that gives them a choice, which do you think the Insurance Company will use to replace your diamond? At the very least the description in your free appraisal should match the seller’s sales pitch. Only an independent, trained appraiser can verify the seller's claims and provide you with accurate values and descriptions that protect your interests.

• As a cautionary note, if you submit an appraisal to the insurance company in which either the grades or values are knowingly inflated or intentionally misleading in your favor the insurer may consider that to be fraud or conspiracy to commit fraud.  Remember, your policy is a legal contract.

• If your policy allows the option of cash instead of letting the Insurance Company “repair or replace”, then you should verify how the amount you receive is calculated.  In most policies the insurer is only obligated for their cost to repair or replace whatever is described in the documents you provided.  The Insurance Company may request bids from replacement companies based on the description in your free appraisal and you would get a check in the amount of the lowest bid!

• So you lose twice. You pay inflated premiums and you get a replacement that doesn’t match what you really had; or, you get a check for a fraction of what it will cost you to replace your jewelry.  All from using a "Free Appraisal".

So what is a Free Appraisal actually worth?  At best, next to nothing; at worst…???

How much is an independent, accurate, professional appraisal worth?  Everything!

For current prices or to discuss how we can best serve you contact us or

More in this category: Appraising the Appraiser »
American Gem Society
Gemological Institute of America Inc.
American Society of Appraisers
National Association of Jewelry Appraisers
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