One morning last week we had a client who had a diamond engagement ring which they had bought at auction. The ring was very attractive. It featured a round brilliant cut diamond of approximately 1.50 carats. The colour was good, around G or H on the Gemmological Institute of America’s colour grading scale. The clarity was also not bad. Around SI (slightly included) on the GIA clarity grading scale. The setting was pretty standard but the ring was very commercial and very saleable.
What is an insurance value?
After checking some recent auction results, I saw that the client had paid a pretty good price for the ring at a little under £3,000 including all charges. The client was looking to insure the ring and wanted us to provide a valuation to give to their insurance company. I explained that an insurance valuation would put a very different value on the ring to that which they had paid. An insurance value would reflect how much it would cost to go out and replace as closely as possible the item being valued. If this meant buying at retail, then one had to factor in all those extra costs that retail prices encompass. Shop rent, staff wages, VAT, not forgetting any mark ups. A ring such as the one belonging to our client could easily command a price tag of upwards of £8,000 in the window of a high street jewellers.
The valuation document
After a detailed analysis of the ring and in particular the diamond, we supplied the client with an insurance valuation document to the value of £11,250. This included detailed measurements of the ring, full carat, colour, clarity and cut gradings for the diamond itself, plus a set of digital macro images of the piece. We would keep the details of the ring on file and, for a small additional charge, be able to update that valuation in the future to reflect any fluctuations in the market place.
In the end our client was very happy with the information they received. But the case highlighted the difference between the value one pays for a piece of jewellery and what it would cost to replace it in the event of a loss. The case illustrared that an item’s value is directly connected to the context.
If you require any insurance valuations for your jewellery or watches then please contact us for a quote.