“We guarantee it will appraise for double what you pay.” What’s wrong with this picture? Are appraisers supposed to reflect what things sell for in the marketplace or appease the jeweler by making everything sound like a steal of a deal? When avenues for discounted jewelry became prevalent in the marketplace several years back, this half-of-retail scenario held up for the discounters for a while. However if the retail markups in this industry have dropped – which they certainly have, so shouldn’t the apprised values? So why do some appraisers keep appraising sky high even though the industry margins keep getting smaller? Because the “half price” jewelers want them to, that’s why.
The consumer does not appreciate hearing that their insurance company is offering them half of the appraised value in a settlement after paying premiums on the full amount, but guess what? The insurance companies are shopping through brokers and discounters for their replacement, and usually get better prices than consumers do. In establishing the original coverage they have to rely on the appraiser’s information and use that value portion to set premiums. If that value is way over a realistic purchase price it only inflates premiums and sets up a future confrontation with the client. Yes, appraisals need to reflect the overall marketplace and give the consumer options for replacement, but they also need to be realistic and not merely a “feel-good” value the jeweler wants “their” appraiser to reflect.
The days of the one line generic jewelry appraisal are numbered. The insurance industry is becoming more involved in the type of appraisal their clients obtain and sending them to independent laboratories for complete and accurate gemological descriptions – like the ones NGL has offered for over a decade.
In addition, diamonds individually valued at over $10,000 often require a diagram of their internal characteristics. This service is always available through NGL and although we recommend a loose diamond for such inspection, mounted diamonds can be plotted as well.
The most significant changes in the appraisal business are going to be coming from new legislation, however. In both the US Congress and Washington state legislature, bills to regulate the appraisal industry are being reviews and will be seeing action soon. First affected will be the real estate business, long a target for congressional scrutiny, but next will be personal property appraisers, such as those of fine jewelry. We at NGL welcome this intervention, but only hope sufficient requirements and limited “grandfathering” for appraisers is also enacted.