Why a "Free" Appraisal Isn’t Worth Even That Much.
• Could you hand your “free appraisal” to a total stranger and expect them to identify your jewelry in a crowded pawn shop showcase? How about in all of the showcases in all of the pawnshops in your area? If the answer is “not a chance”, then that’s exactly the probability you have of recovering your jewelry or of getting an accurate replacement from the insurance company, if you suffer an insured loss.
• The documents you provide to the Insurance Company are your only legal protection and are the sole basis for your insurance coverage. The more vague or incomplete they are the better is it for the Insurance Company if you ever need to file a claim.
• Most people use the “free appraisal” provided by their jeweler to bind their insurance coverage. Or worse yet, they use the sales receipt. They rely on their Agent to tell them if the documentation is okay.
• The Agent seldom has the expertise to recognize a good appraisal and will gladly accept minimal documentation. He’s working for the Insurance Company! The Agent primarily cares about the “appraised value”: it determines your premium and his commission. The rest of the document is there to protect you. Does it?
• Does the value provided accurately reflect what you paid? Did the jeweler “puff” the value to show you what a “deal” you got? If so, you’re paying inflated premiums for absolutely no reason.
• Did the jeweler try to protect himself by using broad ranges for size and quality? For example, if you submit a document that describes your diamond: “Approx. 1 carat, H-J color, SI clarity diamond”. Is a 0.89 ct. diamond “approx. 1 carat”? The value difference between a 1 carat H color, SI-1 and a 0.89 ct J color SI-2 is nearly double. Which do you think the Insurance Company will use to replace your diamond? As you can see, a vague, poorly worded description gives the Insurance Company the option of using the broadest interpretation of that description. At the very least the document description should match the jeweler’s sales pitch. Only an independent appraisal can verify the jeweler’s claims.
• If you submit an appraisal to the insurance company in which either the grades or values are knowingly inflated or intentionally misleading; you may be guilty of fraud or conspiracy to commit fraud and may be prosecuted or have your claim denied. Remember, your policy is a legal contract.
• If you choose the “cash out” option instead of letting the Insurance Company “repair or replace”, then the money you receive will be based entirely on the Insurance Company’s cost to repair or replace your jewelry with whatever is described in the documents you provided. The Insurance Company requests bids from replacement companies based on your appraisal and you get a check in the amount of the lowest bid! You don’t get paid the amount of the inflated value your premiums were based on.
• So you lose twice. You pay inflated premiums. You get a replacement that doesn’t match what you had; or you get a check for a fraction of what it will cost you to replace your jewelry.
All from using a Free Appraisal!?
So what is a Free Appraisal worth? At best, next to nothing; at worst…???
How much is an accurate, professional appraisal worth?
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