Here it is, short and to the point! You can not sell your diamond or jewelry for the face value of an appraisal done for insurance purposes - ever.

When you are looking to sell your house or condo, you have an appraisal done by a qualified home appraiser. The value they come up with will be very close to the selling price you should expect to sell your home for.

Nothing could be further from the truth in the jewelry industry. Most appraisals in the jewelry industry are 'insurance appraisals', which are normally given values of approximately 100% above retail. These appraisals are inflated, and do not represent the actual value of the jewelry.

Jewelry stores will often provide you with appraisals at double the sale price. They supply an appraisal for $10,000 when they are selling the jewelry for only $5,000.

Buying at half of the appraised value, what a great value! You must be making a profit of $5,000!

Of course not, if the value really is double why are they selling it for half price?

Who wins by issuing appraisals high values?

• Insurance companies win when they charge high insurance premiums on an item that actually has much lower replacement value.
• Jewelry stores win when they use inflated insurance appraisals as a sale tool, giving the buyer a false sense of value.