Good Example of a Bad Appraisal

by Admin 15. January 2014 17:04

Periodically I am going to share with you appraisals that come across my desk, that demonstrate the importance of adequate documentation.  Here is one I received last fall.  Fortunately the client was savy enough to question the value of her solitaire diamond ring, and called me.  She was correct, it was dramatically undervalued.  Had she not caught that, she might have sent it to her insurance company to schedule on her homeowner’s policy.  The insurance company most likely would have accepted it for scheduling.  So, what would have happened if she had lost it?  The most she would have received was the amount on the scheduled based on the appraisal, which was $12,500.00.  Based on i-Val and my opinion, the current estimated value for the purpose of insuring the ring should have been around $30,000.  As a replacement provider, in my opinion based on the appraisal document (noting that the document does not identify the gram weight of the ring so I estimated), the actual replacement cost today is $24,800. This is the amount that I, as a replacement provider, would charge the insurance company today to replace this article. What would this have meant to my client?  In order to replace today in the event of a loss, she would have to be out of pocket nearly 13,000.

 

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