Getting your jewellery valued by a professional is a sensible move. However, jewellery valuations can cause a lot of confusion.

More often than not, a professional valuation vastly exceeds the amount you could actually get by reselling the jewellery. A valuation by a local jeweller may also differ hugely from your insurance valuation, and again from a valuation provided by someone interested in reselling the piece, like a pawnbroker.

So what’s going on, and what do different kinds of valuations actually tell you?

Insurance valuation

Most insurance companies will settle claims only for jewellery listed separately on the policy document. A valuation proves ownership, and is independently assessed evidence as to the worth of the jewellery.

An insurance appraisal represents the full retail replacement value of a new or antique piece. It assesses the quality and design of the item, and takes into account the cost of comparable replacements in the event of loss. This type of valuation represents one of the highest values attached to your jewellery.

Unfortunately, this doesn’t mean your insurance company will pay out the assessed value. It’s simply a monetary cap the insurer is prepared to pay up to. In many cases, you’ll get a lot less than this value.

Market valuation

Some insurance companies in South Africa pay out according to market value. A market valuation is an insurance assessment that takes the current or fair value of a piece into account.

This is the actual price you’ll pay for an item of similar age, quality and condition in a retail store, and is typically a high valuation. To ensure your market valuation is always current, it’s recommended you have your jewellery professionally re-valued every couple of years.

Estate valuation

Estate valuation, or cost realisation valuation, usually occurs after the reading of a will. It’s an estimate of what you’re likely to receive for the jewellery in a forced sale, such as an auction, or by selling back to the trade.

These valuations are comparatively low. They’re determined by the prevailing appetite for the kinds of pieces under valuation, the worth of the materials and the overall condition of the jewellery.

Security valuation against a loan

More and more companies around the world are accepting jewellery as collateral against cash loans. In the case of a security valuation, the assessment isn’t based on the design or aesthetic appeal of the piece. It focuses solely on the actual worth of the components of the jewellery.

In India, for example, gold jewellery acting as security for a loan is valued at the closing price of 22-carat gold for the preceding 30 days, and as quoted by the Bombay Bullion Association.

This type of assessment typically results in the lowest valuations of jewellery.

Using jewellery to get a loan

With Lamna, you can use a valuable item of jewellery to secure an asset-based, short-term loan.

Along with a valuation you provide, the weight of the precious metal and the quality and quantity of any precious stones will determine how our experts value the jewellery – and therefore the value of the short-term loan we can offer.

Once you’ve repaid the loan and agreed interest, the jewellery will be returned to you – so there’s no need to sell a treasured item.

For more information about using jewellery to secure a short-term loan, contact us on 086 111 2866.