If you are gearing up to resell some pieces from your jewelry collection, you may be surprised to see that the resale value is lower than what you think the piece is worth. Your diamond earrings were insured for far more than a jeweler is quoting you for right now.

But don’t be dismayed! The jeweler is not short-changing you!

We explain what distinguishes the resale value from the insured value of your jewelry and what accounts for the price difference between the two.

What Is the Insured Value of My Jewelry?
Many people have their most sentimental jewelry items insured (think engagement rings, wedding bands, family heirlooms). Jewelry or luxury insurance can easily be added to your homeowner’s or renter’s insurance, and the first step to getting coverage is to have your jewelry appraised by a jeweler.

The jeweler will give you a report that lists the piece’s specifications—like the metal type, metal purity, stone size and clarity—and the retail replacement cost. You turn this certified report over to your insurance agent and they will finalize your policy.

If you’re interested in learning more about jewelry insurance, take a look at this blog post where we break it down.

What Is the Resale Value of My Jewelry?
The resale value is valuation of your jewelry and the cost dictated by the market. Jewelers and jewelry resellers will compare how much are similar items being sold for. The resale value will factor in the brand name, cost of raw materials, and the depreciation of your item. In short, the resale value is a reflection for how much someone is willing to pay for your item.

Why Is There a Difference Between the Resale and Insured Value of My Jewelry?
More often than not, the insured value of your item will be greater than the resale value of your piece. It can be confusing (perhaps even alarming!) to see a disparity between those two valuations.

The insured value of your jewelry is usually around the retail replacement cost, not the resale price. Most insured jewelry has an inherent sentimental value which makes it difficult or very costly to replace. Therefore, the insured value accounts for the actual cost of replacement and the intangible personal value of the item. The resale value, meanwhile, largely ignores the intrinsic value of your item.