Why is insured value important vs retail value?
You likely have appraisals for most or all of your most important jewelry. They include the details of each piece; total carat weight of diamonds, carat weight of other stones, type of gold (14k, 18k), dimensions of larger stones, sometimes the origin of stones, and some type of ‘value’. Typically people use these documents for insurance purposes because in the event of a claim like theft or any kind of loss as these appraisals are all you have to support replacement.
What is "Resale Value"?
The resale value is dictated by the market at the time of sale. What other similar items are selling for will reflect on your resale value. Factors of the resale value are: the brand name, cost of materials, condition, if the item is rare, special history, if the high in demand (or if the market is saturated), etc. Often, the resale value is how much someone is willing to pay for the item.
For example, with one of our Vegas clients, she had purchased an Emerald ring about 15 years ago for $15,000.00. When she decided to sell it, it was valued at $60,000.00 because the price of Emeralds has risen dramatically. In her case, her appraisal worked against her as it had not been updated since the purchase. This is a perfect example why you want to always work with a firm who is experienced in selling jewelry and other high value items. Had our client just sold the ring for the amount on her appraisal she would have short-changed herself by about $30,000.00
Typically however, the insured value of your item, displayed on an appraisal will be greater than the resale value of your piece, unlike in the case of our client with the fantastic Emerald ring.
This can be very upsetting to people when they find out, and often, it is learned in an untimely manner. People think for years that their engagement ring or other treasure are like “money in the bank” based on their appraisal, and sometimes they are, but when they go to sell, the value is not necessarily the amount on the apprasial, rather the market is the determining factor.
Buying jewelry that is investment grade will help hold values and increase in value over time, so this is just another reason why we should all be buying Emeralds and Sapphires!