May 10, 2011

Jewelry Appraisals: Qualified or Layman?

Posted in appraisal, jewelry, rose diamonds tagged , , at 12:00 pm by rosediamonds

Following the latest string of tornadoes, we have been preparing more appraisals than normal.  Many consumers do not realize there is no federal or independent body setting qualifications for who may be a jeweler or a jewelry appraiser.  Anyone can hang out a shingle as a jeweler or an appraiser.

In fact, most jewelry retailers are not even Graduate Gemologists. A JCRS study of appraisals received by insurance companies found that only 21% of them were prepared by graduate gemologists.

What does this mean to you, the consumer?  Many times,  jewelers have no formal training about diamonds, gemstones, precious metals, jewelry repairs, etc.  Most jewelry stores across the country send jewelry repairs out to independent contractors (off site).  Jewelry appraisals are prepared by these same merchants who often inflate the values to make their products seem like more of a bargain.  Inflated appraisals may make clients feel better about their purchases, but they also end up paying more for their insurance as the premium is calculated on the appraised amount listed.  Jewelers can purchase a pad of 50 official looking appraisal forms for $10.

A GG degree insures that the jeweler has a basic knowledge of gems and jewelry evaluation and that he is able to perform the relevant lab testing.

Some retailers without a GG degree have learned their business on the job and a very good at what they do, but others are not even familiar with basic jewelry terminology or grading systems.  Most jewelry retailers do not have a gem lab, with instruments to properly examine a stone and determine its quality.  They must either rely on the word of their suppliers or simply guess.

This lack of knowledge shows up in many insurance “appraisals,” written on fancy letterhead but with no content.  If you’ve gotten an appraisal that reads, “One gold and diamond ring, value $2,000,” it’s not surprising — jewelers write thousands of appraisals like that every year.  But such a description is useless for adjudicating a loss claim according to the insurance claims adjusters.   Another reason to have an educated appraisal: in the case of loss or lawsuit, a graduate gemologist is better equipped to handle litigation support and is a more reliable expert witness in court case.

While researching this article, I read up more on the different certifications offered by various appraisal associations, and there are several organizations out there with some requiring only an admission fee (cheaters!) and others requiring extensive testing.  Some have different levels of “membership”  a for a healthy fee.

Due to my background in the insurance industry, I feel I have seen both sides of the story.  On one hand, I am a GIA Graduate Gemologist and have studied jewelry periods, jewelry design & manufacturing, and valuation extensively.  I am looking into further delving into the appraisal associations as well (not the cheater kind though).  As someone in the insurance industry, I can tell you most claims adjusters are not GIA gemologists either, and rely heavily on the appraisal $ value instead of the detailed description.  Insurance companies have trained jewelry experts on staff, but they are not called in on minor claims.  I can also tell you that more and more insurance companies are requiring appraisals to be performed to a graduate gemologist to reduce the “one ring value $5000” appraisals from coming in.

FYI: We complete jewelry appraisals same day service at Rose Diamonds and offer Appraisal Lite if you have an original appraisal that needs to be updated (with skyrocketing metal and diamond prices).  It is half the usual appraisal fee.

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