An appraisal is a “tool” to accomplish some purpose… obtain insurance, distribute property among heirs or to collateralize a loan, to name but a few of those purposes. Your appraiser needs to know the function and purpose that you will be using the document for. Your appraiser is your advocate... but only if you are truthful too. Answer any question they may have and bring any supporting documentation with you to your appointment.
Insurance Appraisals – This is our most asked for service. This is a very thorough document, accurately describing your jewelry along with the most common selling price from full service firms engaged in sale of like kind and quality items. If the item is lost or stolen, the information containing in this report will permit a new item to be created. With this, you can obtain coverage, for that specific item, from your Homeowner’s Insurance carrier or an Independent Carrier. This document is written in such a way so that any party reading it knows every aspect of the item and can re-create the item in the event of loss, theft or damage. All appraisals contain photographs of the described items.
Types of insurance available for jewelry - Insurance companies vary on their replacement policies. Ask your particular company how they handle losses.
Replacement Insurance is the most common. Your insurance company will replace an item, or pay you no more than their actual cost to obtain it, regardless of the value stated on the appraisal document. You want to have current, realistic values, reflecting what is actually happening in the market. If the value is unrealistically inflated, you will be paying higher premiums for coverage that you will never recover.
Agreed Value Insurance is the alternative to Replacement Insurance. It is important to note that not all companies offer, and not all customers qualify for this type of coverage. With Agreed Value Insurance, the insurance company does not find a replacement, but rather pays you the face amount on the policy. This type of policy often is inflated annually by the insurance company automatically based on the CPI, which will inflate the premium you pay as well. Keeping tabs on your item’s current actual value is also important with this type of coverage too.
Knowing the type of coverage you have before you experience a loss will prevent a great deal of heartache and headache if you should experience one.
IRS Documentation – This is commonly called a Fair Market Value Appraisal and is less straight forward than an Insurance Appraisal. This type of value is often less than an Insurance Replacement appraisal. These appraisals are structured to be in compliance with the legal definition of Fair Market Value and is a requirement by courts and the Internal Revenue Service for valuation issues. This value is often appropriate for other legal or tax purposes such as dissolution settlement, divorces, charitable contributions, and even for some criminal proceedings.
Appraisals for Other Purposes – There can be a myriad of reasons that you may need an item evaluated. Openly discuss your needs with the appraiser, and you will be best served. Other types of appraisals include: