In the last 5 years the price of gold has gone up around $500/oz. and platinum around $300/oz. When I got married over 13 years ago, I insured my wedding ring as well as my wife’s, but it has been some time since I had them reappraised. I found out that it will cost 125% more to insure them both for their replacement value, should we lose either of them! As you can see, this could be a very expensive mistake.
Below are some helpful insights provided by Randy DeLopst, President of Taurus Insurance & Risk Management Consulting.
The prices of precious metals and stones need to be constantly monitored as prices fluctuate regularly. Getting regular, up to date appraisals is not inexpensive, but individuals need to consider the potential consequences. Obviously, you need to monitor the price movements of the key components of your jewelry and then consider the cost to obtain updated appraisals.
There are several organizations that educate, train and credential jewelry appraisers. The major ones are:
· American Gem Society
· National Association of Jewelry Appraisers
· American Society of Appraisers
· Appraisers Association of America, Inc.
· International Society of Appraisers
There are other organizations that educate and credential gemologists, but they do not train them as appraisers. These organizations educate, train and credential individuals to evaluate and grade diamonds and colored stones in such things as color, clarity, cut and carat. Pearls are graded in such things as size, color, shape and condition.
One of the most recognized gemologist designations is from the Gemological Institute of America (GIA). Jewelry stores may profess they have GIA certified staff members. However:
a. This does not mean these individuals are qualified appraisers. Being able to grade and assay gems or pearls is only one of the skills that are required. The appraiser must also be able to evaluate the labor cost to create the piece of jewelry. Labor costs can account for 25% to 50% of a piece of jewelry’s cost. So, expertise on just the materials side of the equation is not enough.
b. There are several types of GIA designations. Just what kind of GIA designation does the individual possess? A GIA Graduate Gemologist (GG) is certified in both Diamonds and Colored Stones but may not be certified in Pearls. If you have pearls, you should look for someone with a separate GIA Graduate Pearls designation. The GIA Graduate Diamond designation means the person is certified only in Diamonds. The same holds true for the GIA Graduate Colored Stones designation and the GIA Graduate Pearls designation. These designations are further explained on the noted Web pages for GIA below.
So, what is a person to do?
1. Consider a jewelry appraiser credentialed by one of the Jewelry Appraiser Associations listed below. If you have very valuable items, you want an appraiser who has the highest level of the credentials an organization bestows and with years of experience in doing the kind of appraisal you need. Take time to research and understand the different levels of credentials an Appraisal Association grants. The Association websites are the starting point for your research.
2. Consider using a GIA Graduate in the type of jewelry you have if they are credentialed in the type of jewelry you have, i.e. Diamonds, Colored Stones or Pearls, but they must also demonstrate they have developed appraisal skills beyond their ability to evaluate and grade precious stones or pearls. This may be a challenge for the lay person to evaluate. In addition, GIA Graduates may not be strong in evaluating jewelry without precious stones, i.e. solid gold or silver rings, bracelets, necklaces, etc. Again, years of experience in doing both the evaluation/grading of jewelry and the performance of the appraisal are important factors to consider.
If you wish to consider using a gemologist certified by the Accredited Gemologists Association (AGA), you should use a similar evaluation and selection process described above for GIA gemologists.
Randy DeLopst, CPCU is president of Taurus Insurance & Risk Management Consulting. Mr. DeLopst has 35 years of experience as an insurance and risk management consultant. He does not sell insurance. He is the founder and president of Taurus Insurance & Risk Management Consulting, Galena, IL. He can be reached at rcdelopst@gmail.com or 608-282-5854.