3 things to look out for when getting your jewellery valued
While the vast majority of valuers in New Zealand have good reputations and operate to a high standard of ethics, the sector has been marred in the past by some less-than-scrupulous business practices. In this article we’re going to shed some light on the valuation process and give you three things you should always keep in mind when getting your jewellery valued.
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Why should I get my jewellery valued?
As the name suggests, a jewellery valuation is a professional’s estimate of the dollar value of a piece of jewellery. The valuation takes into account every aspect of the jewellery, including the type, amount and quality of metals and gemstones used, as well as the level of craftsmanship that has gone into creating the piece. The cost of a valuation can vary anywhere from $50 to $120, so it can be worthwhile to compare quotes to get the best deal.
There are many reasons why you might need to obtain a valuation. Two of the most common include:
-Reassurance
If you purchase an extravagant custom gold engagement ring, it’s reassuring to know that the piece really is as valuable as the seller claims it to be, and that your hard earned money is not being squandered on a poor-quality product. Some stores will provide you with a valuation for pricier pieces, though there are some caveats to keep in mind in these situations. More on that below!
-Insurance
It might surprise you to learn that your existing home and contents insurance probably doesn’t cover any of your fanciest pieces of jewellery..
Why not?
Well, as the Insurance and Savings Ombudsman explained, most policies have liability caps (typically somewhere between $1,000 and $3,000) on how much the company will pay out for unspecified items. If the value of your diamond wedding ring exceeds the policy threshold, you’re basically out of luck should it ever get lost, stolen or damaged (and we’re keeping all our fingers and toes crossed that nothing so tragic ever befalls your jewellery!).
Some policies also have aggregate limits (the maximum amount your insurance company will pay out in an event, regardless of how many unspecified pieces of jewellery are affected) - get in touch with your insurer if you’re unsure of the the details of your contract.
The good news is that these restrictions usually only apply to unspecified pieces. You can specify your jewellery by photographing it and listing it separately in your insurance policy - a process that requires you to have the item professionally valued.
However, as we mentioned earlier, not all valuers are created equal. What should you look out for when getting your jewellery valued?
1. The valuer is recognised by your insurance company
Considering how tightly the insurance industry is regulated, it’s kind of odd that there is little government control over the valuation process. This lack of regulation means that anyone - you, me, the man next door - can set themselves up as a valuer and, with no qualification or experience, tell you how much your jewellery is worth.
However, just because there are no restrictions on who can and can’t be a valuer doesn’t mean that your insurance company will accept valuations from just anybody. As Consumer NZ explained, insurance firms are becoming increasingly strict about only accepting valuations from certified gemologists and valuers.
Some examples of reputable, independent New Zealand valuers include:
- Gem lab
- Jewellery Valuation Centre
- New Zealand Jewellery Valuations
- Jewellery Valuers Company
2. The valuer has no conflict of interest
Many retail jewellery stores offer in-house valuation services on their own jewellery. On one level there’s nothing sinister about this - after all, it makes sense that a collective of jewellery experts would include a valuer. However, issues can and do arise when the valuations are used as leverage to help make an item appear more appealing to the public.
Although some industry organisations (including the Jewellery Valuers Society and the Jewellery Appraisers Society) ban such marketing practices, many businesses still employ this dubious strategy. Indeed, take a walk around your local mall and you’ll probably find at least one jewellery store offering engagement rings at near-irresistible discounts of anywhere from 20-50 percent below the valuation.
However, if you were to get this ring appraised by an independent valuer, you might be in for a shock at its real value. In 2008, the jewellery valuing industry came under scrutiny from the Commerce Commission after a spate of stores were caught valuing their pieces thousands of dollars higher than their real-world worth. Perhaps the most notable case was a diamond ring, which sold for ‘just’ $70,000, despite being advertised with an insurance valuation of $171,000. A slew of other stores were also found to be using valuations unfairly to drive sales.
According to the Sunday Star Times, the massive discrepancy between the advertised valuation and the sale price comes from retailers using ‘insurance’ valuations (the amount it would cost to remake a piece) instead of ‘indemnity’ valuations (the value of the jewellery in the context of the current market).
What’s the key takeaway here? Don’t rely on retailer-provided valuations. Instead, obtain your valuations from independent appraisers. They have no horse in the race, so to speak, and can therefore be relied on to be fair and objective.
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3. The valuer is part of an industry council
As touched on, there are no legal structures in place regulating the jewellery valuation sector. However, there are a number of industry councils, which hold their members to specific criteria and codes of conduct in order to protect both valuers and consumers. It’s not an airtight solution, but these societies are reasonably effective at weeding out the cowboys, and some provide a course of resolution in certain disputes. For your own safety, try to always use a valuer that is associated with an industry council such as:
- The Jewellery Appraisers Society of New Zealand
- The Jewellery Valuers Society
- Association of Independent Jewellery Valuers
How do we do our valuations?
Here at SilverStone Jewellery we’re able, upon request, to get your custom engagement rings and other lavish pieces of jewellery independently valued at a prestigious and highly qualified appraiser that is recognised by virtually every insurance company in the country. By doing so, we can simplify the insurance process, help you better protect your jewellery, and also put your mind at rest knowing the true value of your beautiful jewellery.