Understanding Jewellery Valuations

Understanding Jewellery Valuations

An explanation of how jewellery valuations work and what different types of valuations actually mean.

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.

ILLUSTRATIVE EXAMPLE

Client borrows R10,000 for 90 days.

Loan Amount
Repayment Period
Monthly Interest
Total Cost of Loan
Initiation Fee
Monthly Fee
APR
R10 000
3 months
R500.00
R2 914.50
R1 207.50
R569.00
60%

Fixed rates range from 36% to 60% APR and payment options range from minimum 3 to maximum 24 months. Apart from the initiation and monthly fees shown below, the only additional fee is credit life insurance if the borrower does not have this already.

APR & Loan Repayment Period

Fixed rates range from 36% to 60% APR and payment options range from minimum 3 to maximum 24 months. Apart from the initiation and monthly fees shown below, the only additional fee is credit life insurance if the borrower does not have this already.

Non-Payment

Non-payments may result in the matters being escalated.

Renewals

All accounts may be renewed if they are up to date.

Collection

All payments are made via EFT or direct deposits into Lamna’s bank account. There are no debit orders.

Understanding Jewellery Valuations

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Understanding Jewellery Valuations

Apply Online

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Understanding Jewellery Valuations

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Understanding Jewellery Valuations

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