Jewelry Insurance 101– Should I Insure My Jewelry?

March 27th, 2009 by James L. Sweaney, CGA, FGA. GG

The results of an insurance appraisal we did recently answer this question emphatically.  A client brought us a ring set with a large round diamond and asked us to appraise and reset this stone into another ring she owned.  During the take-in procedure for any work we do, we always ask our clients for the value of their items because we insure the jewelry while it’s in our possession.  In this case, the client said the ring had been originally appraised for $35,000.  Boy, was she in for a surprise!

The ring had not been cleaned yet and had a lot of buildup. It appeared that this 10 mm diamond might have a fair amount of tint—I was thinking it might be about J or K color.   A preliminary examination under the microscope showed the stone to be about VS2 or SI1 clarity.  A 4-carat VS2 K color diamond of average make wholesales for about $10,000 to $12.000 per carat so her idea of the value seemed low, but not out of the ballpark.

To my surprise, after removing the stone from the old mounting, cleaning it thoroughly, and confirming the clarity to be VS2, cut fair to middlin’ (sophisticated grading term), I color graded it as high H, possibly G. Grading a mounted diamond is always more difficult and less accurate than grading it loose. Daughter Jenny, a Graduate Gemologist with younger eyes than mine was certain it was G color. We double-checked the color first thing the next morning when our eyes were fresh and confirmed the G color. We were looking at a fine and rare stone easily worth $30,000 per carat wholesale!

Based on our research and market data for sales of similar items, the insurance appraisal we issued came in at just under $160,000 including local sales tax—a big difference from $35,000!

If our client had the ring insured for $35.000, the insurance company would only be responsible for that amount, regardless of its current cost.  Can you imagine the heartache if she suffered a loss of the stone, only to find out it was underinsured for over $100,000!

Recently, we have found that many items, especially high-end pieces have shown substantial appreciation in value over the last five years.  One emerald ring that appraised for $60.000 in 2006 is now appraised for $90,000.  Because of the Burma embargo, fine Burma rubies are really skyrocketing in value.  And the economic crisis is contributing to scarcity of many mined gems— a lot of gem mines have been shut down and the miners are back on the farm!

Our advice—Don’t get caught short!  Insure your jewelry adequately—Have an up-to-date replacement value appraisal done right away. Our expert appraisers are available for consultations and appraisals Monday thru Saturday.  Please call for an appointment, (951) 682-2325 or email


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