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Why Do You Need Jewelry Appraisal And How Much Does Appraisal Cost?

The most common reason for appraising your jewelry is to obtain insurance coverage.  There are two important elements of an appraisal for insurance: value and description.  The value on an appraisal sets only the upper limit of insurance coverage while determining the premium you pay.  An appraisal with an over-inflated value will cause you to pay a higher premium than is necessary, but will typically not result in a higher “cash-out” in the event of a loss.  Most insurance companies consider the description of the jewelry when replacing an item that was lost or damaged.  A vague description allows the insurance company greater latitude in their choice of a replacement.

In case you inherit heirloom jewelry, you will need an appraisal report for tax deduction.  Taxable estates require documents that are structured to meet IRS requirements.  You will also need a jewelry appraisal to know what their fair market values are for distribution among heirs.

An appraisal may be required to document the jewelry when establishing or settling a trust, or to insure jewelry contained in a trust.

You will also need your jewelry appraised for charitable donation tax liability. 

Jewelry appraisal is also necessary in the case of dissolution of marriage or litigation. 

Each type of appraisal is unique and requires different research and methodology to reach a final value conclusion.  As a result, the value of the same jewelry item may be different for each of these appraisal types.  

When you come to an appointment for jewelry appraisal, it is important to inform the appraiser the intended use(s), and provide any related documents or previous appraisal reports that accompany with the appraised item(s) in order to support the appraiser when she/ he does analysis and research for the appropriate value(s) of the subject jewelry. 

How much does jewelry appraisal cost?

When dealing with professional fees, questions on ethics often develop.  Appraisers must never charge a fee that is linked to the outcome of an appraisal report.  An obvious connection between fee and outcome that would be considered unethical is setting a fee that is based upon a percentage of the value of the item being appraised.  The conflict of interest created by charging a percentage fee overshadows any diligent effort an appraiser makes at rendering valid value conclusions.  Although an appraiser might be tempted to present a high value in order to receive a greater fee, the mere existence of such a temptation is enough to create a conflict of interest.

There are several ethical fee structures.  The most commonly encountered is the rate per item.  This method varies from appraiser to appraiser.  Some appraisers set a flat rate per item, no matter how many items are involved.  Other appraisers use a slightly higher fee for the first item and thereafter a reduced rate for each additional item.  The flat rate can be modified based upon the amount of work, liability involved and research needed.

Another very common fee structure is one based upon an hourly rate.  The appraiser performs the task and is paid a flat rate per hour.  This works especially well when the appraiser is unsure of the amount of time that will be required for a specific appraisal project.  Some appraisers charge hourly rates that are variable based upon task, for example, charging a higher hourly rate for testimony than for appraising.

Professional jewelry appraisers should always provide a clear explanation of the fee structure prior to beginning an appraisal task to eliminate any misunderstanding.  Your appraiser should provide a fixed quote for the appraisal fee at the time the jewelry is presented.  There should not be a charge to quote an appraisal fee and, once quoted, fees should rarely exceed the original quote.  Any unforeseen complications need to be communicated to you if any increased fee is necessary. 

Review La Jolla Gem Appraisal's rates for your reference before scheduling your appointment. 

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