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Insurance Professionals' Appraisal Checklist and Download

What should a proper appraisal contain?

1. Cover Document:

This explains in detail what type of value is being sought ("purpose") and how the appraisal is to be used ("assigned use"). It will identify the client and intended users of the report, and where the property was inspected as well as the dates of inspection and the dates of value. It will explain the approach to value used and the markets explored. The standards to which the appraiser complies will be explained along with any limiting conditions and other pertinent information not found anywhere else within the appraisal document. (info in check list) Link to summary appraisal check list.

2. Grading systems used: What is the grading system that they use for diamonds, colored gemstones and pearls? The systems must be listed out fully.

3. Professional Profile: This is the appraiser's history of education and experience. It lets you know how much education the appraiser has and how current it is. This is very important to see in writing. This part of the appraisal packet will really let you know where the appraiser stands in comparison with their peers. The appraisal must contain a copy.

4. Body: This is the item specific area of the appraisal. It is critical that it is written properly. (info in check list) Link to list of all other check lists.

5. Addendum:

The back of the appraisal should contain lab work, photographs, and any other support material not found in the appraisal body or cover documents.

Major Appraisal Red Flags

1. Appraisals not done by a trained Gemologist Appraiser You should verify appraisal content and value conclusions when the appraisal is not preformed by a professional appraiser. Remember just being a Gemologist is not enough. One should also have formal appraisal training, which is not taught in gemological training programs.

2. Use of diamond color master stone set. Unless the diamond that is the subject of the appraisal has a grading report issued by a laboratory like GIA you need to verify that the grader has a master set.

3. No style number/ name or manufacture on mountings. It is difficult and sometimes impossible to indemnify your client when the appraisal is missing this information. Due to the fact that most appraisals are done by the seller, they have this information and it must be included in the appraisal. For appraisals that are done after the fact, in many cases the trademark is not there or unidentifiable. In these situations there is not much that can be done.

4. No model style number or serial number on watches. Most watches have this information. This lets you know the date of manufacture and its exact replacement number. There are a lot of Gaff (knock-off) watches out there, Especially Rolex. This lets you know that it is real, if it is new, and if it has aftermarket parts. I see a lot of claims especially on Rolex where the insurance company loses thousands of dollars on claims on knock off and replacements of 25 year old watches with brand new watches.

5. Diamonds all the same quality.

In over 20 years of practice I have only seen a few very high-end pieces where small diamonds were all the same quality. When you have ring mountings, eternity (tennis) bracelets & necklaces, pavé and channel set earrings, and other similar items, the quality of the diamonds varies. In 90% of the appraisals that I see the qualities are stated usually as one clarity and color grade (e.g. VS2 clarity, and G color). They usually almost always match what they state the major center diamond is. The fact is that this is almost never the case. The quality, due to the way small diamonds are sold in parcels (e.g. 120 diamonds total weight 3.28ct, $1200 per carat) to the retailer. The parcel will usually in this case have VS2-SI1 clarity and G-J in color. If you have an appraisal on an eternity bracelet with (44) diamonds and it states VS2, G. I will bet that if you had it checked by a competent gemologist appraiser you would find a very different conclusion! To spend the time sorting for an exact match would add a very high premium to the cost.

6. Colored gemstones listed with no quality or enhancement listed.

Remember that colored gemstones are graded and 90% are enhanced and that has effects on value, care, and stability!

7. Very short item descriptions The one to two line appraisals. Remember these will not allow you to truly indemnify and usually cause you to heavily over pay on claims.

8. Over Inflated Value conclusions Remember if the appraisal is much higher than the sales receipt than there may be a problem and great moral hazard.

9. Ideal cut diamonds

A diamond listed as "ideal" without a laser cut analysis is 100% unacceptable. The diamond should have one along with the proportions individually listed so you can compare them to the AGS standard. Remember it is based on the lowest common denominator. In other words it is not the mean, the mode or the average. (E.g. if all critical measurements are 0, and one is a 4 than the stone is a 4 cut!)

10. Handwritten Appraisals You should never except an appraisal that is handwritten.

11. One Page Appraisals If the whole appraisal is one page it cannot contain all necessary information and therefore it is an automatic FAIL!

Why not download the checklists now?

Note: All download files are in Word for Windows format®. You will be prompted to either "open" the file or "save as." I recommend the "save as" option.

• Questionnaire for Interviewing Appraisers

    Questionnaire for Appraisers Checklist Download (Word for Windows® format)

    Questionnaire for Appraisers Checklist Download (PDF format)

• Diamond Appraisal Checklist

    Diamonds Checklist Download (Word for Windows® format)

    Diamonds Checklist Download (PDF format)

• Colored Stones Appraisal Checklist

    Colored Stones Checklist Download (Word for Windows® format)

    Colored Stones Checklist Download (PDF format)

• Jewelry Appraisal Checklist

    Jewelry Checklist Download (Word for Windows® format)

    Jewelry Checklist Download (PDF format)

• Pearls Appraisal Checklist

    Pearls Checklist Download (Word for Windows® format)

    Pearls Checklist Download (PDF format)

• Summary Appraisal Checklist

    Summary Appraisal Checklist Download (Word for Windows® format)

    Summary Appraisal Checklist Download (PDF format)



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