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Some appraisal valuations are just not right!

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Here are some important points to consider if you are insuring your jewelry and need or have an appraisal. Insurance companies may determine that the appraisal may be inflated:

  1. Some appraisal valuations are purposely exaggerated.
  • Sometimes a jeweler will inflate the valuation to make the customer believe the jewelry is worth considerably more than was paid. This is known as a “feel-good” appraisal because it is meant to please the customer.
  • A well-intentioned appraiser may bump up the valuation as a favor to the customer, thinking a high valuation will be to her advantage when applying for insurance. It is not!
  • Some appraisers say increasing the valuation allows the insured to go to the highest-priced store for a replacement. The truth is, the settlement amount will be at the price the insurer would pay for a replacement.
  • An inflated valuation actually costs the customer money. Here’s why:
  1. Premiums are based on the value of the jewelry being insured.
  • If the insurer relies on an inflated valuation, the premiums will be higher than necessary.
  • Some insurers simply accept an inflated valuation and let the insured pay higher premiums, since this means more money for the company. But that goes against underwriting standards; insurers aim to reduce moral hazard, not increase it.
  • Good premiums are based on ITV (insurance to value) calculation for each piece. The calculation is based on descriptive information from the appraisal, which is why it’s important to have an appraisal from a qualified appraiser.
  1. You save money if premiums are based on actual value not an inflated value.
  • In the event of a claim, settlement is typically based on the value of the jewelry at the time of loss.
  • A client who has been paying excessive premiums based on an inflated valuation will be upset to receive a settlement that’s far less than they anticipated.
  1. Basing insurance on an accurate valuation means Hometown customers have no unpleasant surprises at settlement time.

Who do you call to obtain coverage for your jewelry and valuable items? Hometown! We are appointed with many of the major insurance companies and do the shopping for you!

Call our licensed brokers to assess your insurance coverage or obtain a no obligation quote at 1-800-568-SAVE (7283) or email

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