Types of Jewellery Appraisals

How the Purpose & Function of the Appraisal Affects the Item's Value

The value of any item depends on a few factors. Let me illustrate this point using a car as an example. A new car is purchased at a dealership and it comes with a full warranty from the manufacturer. It has not been driven before, so it is assumed not to have any defects. Buyers are prepared to pay a lot more for a new car than a used car because there is less risk involved. Therefore, an appraiser would say that a new car has a higher value than a used car. The exception would be rare antiques. For the most part, jewellery is no different.

The key thing to note above is that the appraiser is not dictating a value but is reflecting the reality of the marketplace. Appraisers research where transactions often take place and reflect what things sell for.

Insurance Appraisals

An insurance appraisal has a complete description of an item of jewellery. The value assigned by an appraiser establishes the insurance coverage and determines the cost of an insurance policy. It sets the upper limit of insurance coverage. Jewellery appraisers base the value on research to develop the usual “go-to” source for that item. This value is called the Replacement Value. It is the typical cost to purchase the item where people would most often buy it. In most cases, a retail store. In some cases, an auction or antique store.

For example, suppose an item is an antique cameo brooch. In that case, the value of that item will be established by researching the cost of similar items at auction, antique stores, or estate sales rather than a retail jewellery store. This is because a retail jewellery store would not be the most common source for an antique cameo brooch.

When an item is sold by brand name and is clearly identified by markings, the appraisal value is the cost to replace the item with the same brand. If the branded item is no longer available, a comparable value will be used.


Check with your insurance company. Without a jewellery appraisal, most home policies may offer a minimal level of insurance coverage in the event of theft. It is normally required that you submit a jewellery appraisal to receive proper and full coverage for all risks. Without the appraisal, you may be subject to a limit of coverage set by your policy in advance, and you will often have to pay a deductible when you make a claim. Submitting an appraisal and asking for all-risk coverage for replacement value will guarantee you are paid in full for your loss, up to the appraisal value. You will pay a bit extra for this, but it’s worth it. Deductibles are normally between $500 and $1000, but your policy makes it clear, so you should ask your agent or read the fine print yourself. Your broker or agent will answer your questions regarding your coverage and make good suggestions to help you ensure your jewellery in the best possible way.

Insurance premiums seem expensive before a loss and inexpensive after one.

Estate Appraisals for Probate

When a person passes away, their property (including jewellery) is described and evaluated for probate. In assets like jewellery, the Fair Market Value, rather than the Replacement Value, is used. This is the value that the item would sell for in an open market. Even if the jewellery is not for sale, the Ontario government requires an estimated value of the jewellery as though it was sold one minute before the time of death. It is advised that you have a professional jewellery appraiser prepare the estimated value because the government has the right to question any estimate for several years after the time of death. As the Executor of the will, you are responsible for proving the value of the jewellery and other assets were honest and legitimate.

Fair Market Value

The price that a given property or asset would fetch in the marketplace, subject to the following conditions:

  1. The buyer and seller have reasonable knowledge about the item for sale; they behave in their own best interests and are free of undue pressure to trade.
  2. A reasonable time period is given for the transaction to be completed. Given these conditions, an asset’s fair market value should represent an accurate valuation or assessment of its worth.

Comparisons are made to estate auctions, antique store selling prices, and the second-hand market of eBay and other online sources. These are places where you would find similar items for sale. The Fair Market Value of an article of jewellery is often a small portion of the cost to replace it with a comparable item in new condition. Exceptions are very collectable or rare items in high demand.

Divorce Settlement

When you divorce, all the matrimonial assets are divided equally. We all know that a diamond ring will not be cut in half to share the two parts equally because that would destroy the ring and render its value worthless. Therefore, the courts need to know what your ring would be worth if you sold it on the day of your divorce. Like an estate appraisal, the court needs the Fair Market Value of the ring. Fair market value is not as low as the price you might get in a quick liquidation, but it is not as high as what you would pay for a comparable new ring at a jewellery store. 

The better the credentials of the jewellery appraiser, the more likely the evaluation will hold up if challenged in a court of law. 

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