What is a valuation?
A jewellery valuation is a piece of paper stating a detailed description of the item being valued, the reason for the valuation, possibly a photograph and its "appraised value."
Valuations are typically used for insurance purposes, so that in the event of loss or damage a dollar value can be claimed from the insurer. Unfortunately this value is almost always well in excess of the price actually paid for the item.
So why is that a bad thing?
Let's say you buy a diamond ring and pay $2000 to the jeweller. He supplies or you get an independent valuation for $3500. This is not the real value of the ring. You only paid $2000, so that is the (retail) real value.
When you insure your item, you are basing the premium to the insurer on the associated valuation. In the case above, you are paying nearly twice the premium that you would if you insured it for it's true value.
Many people are fooled into thinking that the valuation is how much the ring is worth and what they could sell it for. Not so. Selling your jewellery will rarely, if ever, see you achieve the retail price.
So who benefits from inflated valuations?
1. The insurer - because they demand higher premiums.
2. The jeweller - because their items appear to be of a greater value than they really are.
3. The valuer - because they get paid well for what is usually a 5 or 10 minute job.
Types of valuations
Valuations should state the purpose for which they were provided. Some of these purposes include Insurance, Private Sale, Divorce Settlement, Deceased Estate and Auction.
The same item will have a different value depending upon the purpose of the valuation.
Who can produce a valuation?
Anyone. Yep ANYONE. Under Australian law there is no qualification or membership of an association required to produce a valuation of jewellery for insurance or related purposes.
However, independent registered valuers ARE required to undergo training and continue their education to remain active members of the National Council of Jewellery Valuers.
If you do require a valuation for your jewellery, make sure the valuer belongs to the NCJV.!