Your appraiser should know which one you need, but just in case, it’s nice to know
Did you know there are multiple appraisal values that your appraiser could provide? If they are worth their salt, they will know which one you need when you tell them what you need it for. But you’re here to get jewelry insurance,
For insurance purposes, the most common appraisal type you’ll receive for modern jewelry (i.e., still available on market) is retail replacement value. It will sometimes also go by the name new replacement value. This type of appraisal provides the insurer with the expected amount it would cost to replace the jewelry in the retail market.
For insuring antique jewelry, or estate pieces (i.e., jewelry that is no longer available on market), you’ll likely need a comparable replacement value. This sometimes goes by the name second hand replacement value appraisal. This is relevant to an older estate piece or antique because there won’t be a relevant replacement to purchase from a retailer if needed. A jeweler may have to rebuild the piece using similar metals and gemstones.
There are also “fair market value (FMV) appraisals”. This sounds relevant, but it’s low probability you’ll need this for your policy. This is the amount the appraiser feels a willing buyer and seller would require to close a sale on an open market. This type of appraisal is more applicable to auctions, estate sales/settlements, or other financial planning needs (like tax liability planning). Not for jewelry insurance usually.
In addition to these, there are a number of other appraisal types. It’s unlikely they would be offered to you, or they would sound immediately inapplicable if you heard them. But you should know their names just in case. For example, there are immediate liquidation value appraisals (which tend to provide far lower value amounts than other appraisal types). And there is one called charitable donation value appraisals. Who knew there were so many ways to value the same item?
Summary of which appraisals are most relevant to insuring your jewelry
So to recap, for your jewelry insurance appraisal needs specifically — you’ll likely need one of the first two, or in some rare instances you may require the third. Check with your insurer to see which one the policy will use:
- Retail Replacement Value (Appraisal) – sometimes called new replacement value, or even just replacement value appraisals. This is the appraisal type that is most usually required by your insurer for modern pieces of jewelry. In other words, jewelry still available on the market.
- Comparable Replacement Value (Appraisal) – sometimes called second hand replacement value appraisals. This is the appraisal you’ll need for older, estate, or antique pieces. Jewelry that would be difficult to find at current retail jewelers.
- Fair Market Value (Appraisal) – The amount for which a willing buyer and willing seller would exchange the piece/money on the open market.
Want to know where to go to get appraisals? Check out our aptly named article: “Where do I get a jewelry appraisal for insurance?“