A client of mine recently went on a cleaning spree to rid her house of as much “stuff” as possible. Her two children had finally “launched.” Both had graduated from college and were in their first jobs. Though she knew that one or both of them could “boomerang” and move back home, she was taking the opportunity to fill bag after bag with items for the thrift store and the dump.
At some point in her hyper-cleaning mania, she called me in a panic. She had always kept her jewelry in a nondescript bag and now she couldn’t find it. Where was the bag? Had it gone to the dump?
Thankfully, the folder with the detailed appraisals was easy to locate. But when she opened it, she realized that the appraisals were 15 years old. Ugh.
Why Have Jewelry Appraised?
Jewelry reappraisals should be done every two to three years. Markets for stones and gold can be very volatile, and prices can change dramatically from one year to the next.
As with real estate, jewelry is appraised for many different reasons, including:
- Replacement values for insurance
- Fair market value for estate tax determinations
- Fair market value for divorce or equitable distributions
- Fair market value for charitable contributions
- Cash value for quick liquidations
- Damage assessments
The appraisal should include the purpose of the appraisal (for example, “replacement value for insurance”), a detailed description and a digital photograph. Each component of the jewelry should be listed and valued. Appraisers can be independent from the store where the article was purchased, but don’t have to be. Check with your insurer for required qualifications.
You may wonder: Wouldn’t a homeowners insurance policy cover lost jewelry? Most homeowners policies provide blanket coverage for items of limited value including TVs and other electronics. However, it doesn’t take much to exceed the policy limit.
Know What Your Jewelry Is Worth
As for the bag of jewelry, the client eventually found it hidden under a cushion (where she had put it for safekeeping). Insurance policies, including the jewelry rider, should be reviewed regularly to make sure they cover what they are supposed to cover. We encourage you to have as much information about your financial situation as possible. For example, knowing what your jewelry is worth will help you to make better gifting decisions.
