While there are a number of reasons why consumers may require a valuation certificate when buying an item of jewellery, the most common reason is for insurance purposes and the vast majority of valuations that are produced for jewellery are required for insurance purposes.
Most insurance companies will insure unspecified jewellery items up to a total value of approximately $5,000 and a maximum value of each item of approximately $1,500, as part of a home and contents policy. When a loss is suffered and a claim is lodged, the insurance company in question will request proof of purchase and proof of the value. (Inexplicably insurance companies do not usually request this at the time a policy is first issued.)
Proof of value will not necessarily require a formal valuation certificate but a sales docket from the retailer giving a detailed description of the piece concerned and the price paid should be provided. Most jewellery claims fall under the unspecified jewellery category and consumers are strongly advised to ensure they can provide proof of purchase and value. This means keeping a copy of the sales docket in a safe place.
Consumers should photograph their jewellery items as close up as possible as the photographs can be used to assess proof of purchase and the value, should the sales docket be lost.
Most insurance companies insist on a valuation certificate and proof of purchase for items of jewellery valued above $1,000 to $2,000 (depending on the insurance company involved) before issuing insurance cover.
Consumers should be aware of the fact that there is no legal obligation for a jeweller to issue a valuation certificate when an item of jewellery is purchased. However most professional jewellers will often offer to provide a valuation certificate, particularly for items above $1,000. Please note that some jewellers may charge a fee for producing a valuation certificate.
When a new item of jewellery is purchased from a jewellery retailer, a valuation certificate from the retailer is acceptable as long as a full and detailed description of the jewellery item appears on the certificate and, most importantly, the valuation figure that appears on the certificate is the same as the price actually paid. A valuation certificate for insurance purposes is supposed to reflect the market price of the item and the price paid is by definition the market price. The only exception to this is when a retailer who has one or two genuine clearance sales per year sells a product at a genuine discounted price and where that retailer believes that it would not be able to replace the item for the price actually paid.
For pre-owned jewellery we recommend consumers use a registered valuer to value their jewellery or check that the person valuing your jewellery has the appropriate qualifications for assessing jewellery.
It is important to know that jewellery valuations do need updating. It is therefore recommended that items of jewellery be valued approximately every 2 years.