When an appraiser is called in to perform his or her services you will be asked, what type of valuation do you require? There are three grades of valuation:
• Replacement cost is what you would expect the insurer to pay you for the items you are insuring.
It is the highest valuation for any of your possessions. Recently, some automobile insurers are not going by the blue book.
You probably couldn’t replace the vehicle for the blue book value.
Check with your insurer to see which method of valuation they use.
• Fair market value is the value of an item arrived at by a willing buyer and a willing seller when neither is under duress to buy or sell. I still don’t know how an appraiser is supposed to bring this about.
I believe this is the value that the Internal Revenue Service uses.
Figures they would use a formula no one can understand. It might work out for one or two items, but what happens when hundreds of different items are involved?
• Duress valuation is when a seller must dispose of property quickly to settle an estate, raise cash or to eliminate accruing costs of storage or a need for space. Basically, it’s a garage sale or auction.
When an appraiser is called in he or she will ask for a dollar cutoff point as far as the value of individual items are concerned.
If you don’t give an appraiser a cutoff valuation, he will then have to evaluate everything.
I mean down to an ash tray from the corner auto mechanic.
Since appraisers are paid by the hour, the more items they have to write up, research and include in the written report, the higher the bill is going to be.
If you have any documentation on the items to be appraised, such as value, history or age, it will help inform the appraiser.
The appraiser will check out the documentation and possibly use the information in the report.
We once did antiques discovery day for a local historical association.
An individual came in with an item that had me stumped as to what it was, did or was worth. I tried to appraise it based on its artistic and decorative merit. I said it was probably worth $75.
He laughed and said he would buy all of the flugelhorn testers that we could find for that amount.
He claimed it was worth $150.
That might be what he paid for the rare flugel horn tester, but I believe it would be hard to find someone who was interested or willing to pay more than $150 for one.
In this case, he was trying to test or make a fool out of the appraiser with a very obscure item.
Don’t look at an appraiser as an adversary.
He is working for you. The harder you make him work, the more it will cost you in time, and time is money.
If you have items of value, such as jewelry, gold, silver, porcelain, art, rare books, expensive electronic equipment or something that wouldn’t be covered by your insurance policy, you might want to get an appraisal report and submit it to your insurer.
They will be happy to add it to your policy since they can charge a premium for this additional coverage.
Most insurance companies will require some sort of documentation, purchase receipts or an appraiser’s report.
These types of appraisals should be updated every three years to include appreciation or depreciation.
You may hate to pay the appraiser and the insurer’s bill, but how much would you hate it if you had a fire or robbery and found that your policy had a total limitation of $1,000 on personal property with a limitation of $100 per item?
I thought it wouldn’t happen to me, but it did, and this appraiser took a shellacking.
I should have listened to my own advice.
Bob Becker is an antiques appraiser from Richfield.