diamond inspectWHAT IS AN APPRAISAL?
An appraisal is a document that describes an item, assesses its relative quality and assigns a value to it. Descriptions usually cover the visible, measurable and analyzable facts about the item (weight, materials, markings). Most appraisals also describe subjective features such as gemstone quality, relative rarity and overall quality of manufacture.

The majority of appraisals done today are for insurance replacement (retail replacement) purposes. The point of insurance is to return the value of the item to the customer. Therefore, insurance appraisals should reflect the realistic cost of replacing an item in a retail jewelry store that regularly sells the type of item being appraised.

Most experienced retail jewelers with basic formal appraisal training are qualified to write insurance replacement appraisals on the new merchandise they sell in their stores. They may also be qualified to write insurance appraisals on new jewelry they do not sell, if the jewelry is similar to the products in their store. Appraisals done on other types of jewelry or for other purposes require more advanced appraisal training.

Reflect an actual selling price between a willing buyer and seller, when neither is compelled by time or need to buy or sell in the item’s most common market. Fair market value must represent the item’s value in its current (used) condition. Fair market value is generally required for charitable donations and estate appraisals. Fair market values may run lower than retail replacement values, because replacement values often reflect the cost to replace a used item with a new equivalent.

Usually reflect low values because of the situations that create their need. Divorce settlements and some types of estate liquidations may require this type of appraisal, depending upon the jurisdiction where the scenario takes place. Less common types of appraisals include probate and loan collateral appraisals.