June 2017

Like? Share!

Valuing Diamonds – Confusion, Complexity, and How Technology Can Help

As every jeweler knows, valuing diamonds for customers is tricky business. Many customers assume that the value of the diamond is the amount they paid for it when they first bought it, or the price listed on the insurance appraisal. And while others might have a general sense of how a diamond is valued, such as 4Cs grading, that doesn’t necessarily mean they know the correct value of their diamond. Valuing diamonds properly is not only necessary for insurance purposes, but also for peace of mind. After all, whether the diamond is a family inheritance, a gift of commitment from a loved one, or an item purchased to mark an achievement, for every diamond owner, the gemstone has deep meaning and personal value.

Valuing Diamonds: When One Plus One Doesn’t Equal Two

Many diamond owners believe that the diamond value listed on their insurance certificate is the actual value of their diamond, and, in a world outside of valuing diamonds, this would likely be the case. However, when it comes to diamonds, insurance companies list a diamond’s replacement value, not the diamond’s resale value.

The replacement value of a diamond is what it would actually cost the insurance company to replace a diamond in the event it was lost, stolen, or intrinsically damaged in some way. The replacement value is the value at which, in the present market, the insurance company would have to pay to purchase a new ring of similar quality. This amount would inherently be more than the value of the ring should you try to sell it second-hand, which is the resale value. Often, the resale value can be as low as 20-50 percent of the replacement value.

Beware Undervaluation

It is not uncommon for people to have their diamond appraised, put the appraisal in a drawer or safe somewhere, and assume that that appraisal price stands for the duration of the time. However, when valuing diamonds, this is not necessarily the case. The value of diamonds is continually open to fluctuations in the market, similar to other gemstones and precious metals. Therefore, it’s quite possible that the insurance coverage, based on the diamond’s appraisal amount, is not high enough, due to a raise in market value. If a diamond is undervalued, it then becomes underinsured, which at best can delay the handling of an insurance claim in the event of a problem with the diamond, and, at worst, could negate the policy entirely, leaving the diamond unprotected. Experts recommend valuing diamonds at least every two years.

Know Your Certifications From Your Appraisals

Both certifications and appraisals help to determine your diamond’s origins and worth, however, they are not the same. Both can function as a determining factor of valuing diamonds, as well as ownership when it comes to buying, selling, consigning, trading, putting a diamond up for auction or bequeathing it to someone. They can both also help fill in the blanks when a diamond is lost or stolen, as well as prove the diamond’s authenticity.

A certification is a report that is provided by an independent gem laboratory. The certification includes information about the diamond’s measurements, color, cut, clarity and carat grades, in addition to fluorescence, polish and symmetry. An appraisal, on the other hand, is valuation of a diamond by a lab, jewelry store, or gemologist. The main point of the appraisal is to help insurance companies determine replacement value. The dollar value of the appraisal takes into account a variety of factors, such as economic trends, stone availability, production and the cost of middlemen. Appraisers who are affiliated with the company selling the diamond could have bias that is reflected in the appraisal. Therefore, it is always best to find an independent certified appraiser.

Current technology can also be helpful in valuing diamonds. The use of blockchain technology in recording a diamond’s roots and authenticity is gaining momentum. In addition, new and technology based approaches to grading can help both retailers and consumers get a better handle on all aspects of their diamond’s value.

Subscribe to the Diamond Blog

Get the latest technology, grading and retail news straight from the source, straight to your inbox.


World Famous Jewelers Series Part 6: Chopard

Once Upon a Time in Switzerland… Our tale begins in the village of Sonvilier, Switzerland where we find Louis-Ulysse Chopard, the second son of Félicien and Henriette Chopard. Félicien was a farmer but he encouraged his sons to enter the watchmaking trade. Louis Chopard had a talent for the craft and quickly built a reputation […]

World Famous Jewelers Series Part 5: Graff

Born to be a Jeweler: The Meteoric Rise of Laurence Graff When 15-year-old Laurence Graff began his first apprenticeship in a jewelry manufacturing warehouse in London, he never dreamed he’d be honored with the Order of the British Empire (OBE) by Queen Elizabeth in 2013. In fact, after three months working in the warehouse and […]

World Famous Jewelers Series Part 4: Boucheron

The Jeweler of Place Vendôme: How Frédéric Boucheron Got His Start Frédéric Boucheron always knew he wanted to be a jeweler. He was born in 1830 to a family of French clothiers, and at a young age he apprenticed himself under jeweler Jules Chaise. By the age of 14, he had completed his apprenticeship and […]

World Famous Jewelers Series Part 3: Faberge

The Man Who Created The Egg In 1885,   Tsar Alexander III commissioned Faberge to create an Easter egg as a gift for his wife, Empress Maria Fedorovna. With this simple gift, the Faberge Imperial Egg Collection was born. The first egg was called the Hen Egg. Inside a white enameled shell rested a solid gold […]

World Famous Jewelers Series Part 2: Tiffany & Co

The name Tiffany & Co. evokes thoughts of little blue boxes, glass lamp shades, and for those who know, the Super Bowl’s Vince Lombardi Trophy. The store is famous for its Tiffany setting engagement rings, chain bracelets with an engraved heart charm, and delicate pendant necklaces. Where did this legacy start? Who is the man […]

World Famous Jewelers: The Names Behind the Designs.

Part One: Harry Winston Tiffany & Co., Cartier, Harry Winston – all famous jewelers and household names. We see their designs on the red carpet, along with Boucheron, Fabergé, Piaget, and many more. These companies are more than just brand names; they were the passion and brainchild of people who loved high quality, stylish jewelry, […]

Rough diamond planning

Cloud Planning: Make Your Rough Planning Up to 10 Times Faster

Planning rough diamonds with Advisor™ software is a complex process that uses loads of computer processing power. Today, with Galaxy™ inclusion mapping technology, the number of rough polishing plans created by Advisor is essentially infinite. With various advanced options to choose from, such as triple planning, Best Value™, CAP and more, the rough planning software […]

Tension Viewer: Reducing the Risks of Rough Diamond Sawing

In addition to all types of inclusions and flaws, rough diamonds have internal tension or stress that occurs naturally as part of their structure. Developed over millions of years during the diamond’s unique formation process, the level and location of tension within a rough diamond varies from stone to stone. When cutting a rough diamond […]

New Software Release: Sarine Advisor™ 7.0 Rough Planning

Advisor™ rough planning software is used by manufacturers worldwide to effectively plan polished diamonds and maximize the achievable yield. Sarine recently released the latest version of the industry-leading software, Advisor 7.0. The release is packed with dozens of new, advanced features, the result of user feedback received from diamond planners working with Advisor all over […]

Advisor 6.0 New Feature: Scoop Planning

Advisor™ is Sarine’s flagship rough planning software product, and the most widely used program of its type. Since its initial development and launch in 1995, the Advisor program, together with the Galaxy™ inclusion mapping system, has become a staple software for diamond manufacturers worldwide. We’re launching the first product post of the Diamond Tech blog […]