The 3 Different Types of Diamond Appraisals: Which One Do You Need?

That diamond ring, pendant, or pair of earrings you own is more than just a beautiful accessory—it’s a significant financial and emotional investment. Whether it was a gift, an heirloom, or a personal indulgence, knowing its true value is crucial. Many people search for a Diamond Appraisal near me to get an accurate evaluation, but if you’ve ever tried to get an appraisal, you might have been surprised to learn that not all appraisals are the same.

The purpose of the appraisal dramatically changes its stated value. Using the wrong type can lead to overpaying on insurance, disappointment in a sale, or even legal complications.

To help you navigate this, let’s break down the three main types of diamond appraisals and when you need each one.

1. The Insurance Appraisal (Replacement Value)

This is the most common type of appraisal people seek, and it’s designed for one primary purpose: to ensure you can replace your item if it’s lost, stolen, or damaged.

• What it is: An insurance appraisal estimates the maximum retail cost to replace your specific diamond and jewelry item with a new one of similar quality, kind, and value in the current market. This value includes the cost of the materials (the diamond and precious metals) plus the labor to recreate the setting.
• Why the value is often higher: This is typically the highest value you will see on an appraisal. For example, if you bought a ring on sale, the insurance replacement value might be closer to the original, non-discounted retail price.
• This is because if you lose it, you can’t go back and get the same sale price.
• When you need it: When you want to add a scheduled personal property rider to your homeowner’s or renter’s insurance policy.
• Immediately after purchasing a new piece of jewelry.
• Periodically (every 3-5 years) to account for inflation and market fluctuations in gold and diamond prices.

Key Takeaway: You need an Insurance Appraisal to protect your investment and ensure you are made whole in the event of a loss.

2. The Estate Appraisal (Fair Market Value)

This type of appraisal is used for legal and tax purposes, most commonly when dealing with an inheritance or making a donation.

• What it is: An estate appraisal determines the Fair Market Value (FMV). The IRS defines this as the price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.
• Why the value is often lower: This value is often significantly lower than the insurance replacement value. It reflects a “resale” or “secondary market” price, not the cost of buying new from a retailer. It considers the item’s age, condition, and current market demand for similar pre-owned pieces.
• When you need it: For estate planning and settling an estate after someone passes away.
• When filing estate or inheritance tax returns.
• When donating a piece of jewelry to a qualified charitable organization (you’ll need this for your tax records).

Key Takeaway: You need an Estate Appraisal for legal and tax reporting. It represents the item’s value in the open, resale market.

3. The Liquidation Appraisal (Resale or Cash Value)

This is the most sobering type of appraisal, as it reflects what you can realistically expect to receive if you need to sell your diamond quickly.

• What it is: A liquidation appraisal states the price a jeweler, pawnbroker, or diamond wholesaler (the trade) would likely pay for your item. This is essentially the wholesale price for the raw materials.
• Why the value is the lowest: This will be the lowest value of the three. Retail markups, brand value, and craftsmanship are largely stripped away. The buyer is looking at the diamond’s intrinsic value and the melt value of the metal, as they need to resell it at a profit.
• When you need it:
• When you are considering selling your diamond to a jeweler or through a consignment shop.
• If you are using jewelry as collateral for a loan.
• For personal knowledge to set realistic expectations before a sale.

Key Takeaway: You need a Liquidation Appraisal to understand the cash value of your item if you need to sell it quickly.

Read More: Everything You Need to Know About Jewelry Appraisal Process

A Quick Comparison Table

Which One Do You Need? A Simple Guide

“I just bought an engagement ring and want to protect it.”

You need an Insurance Appraisal.

“I inherited my grandmother’s diamond brooch.”


For insurance, you need an Insurance Appraisal. For estate tax purposes, you need an Estate Appraisal.

“I’m thinking of selling my old diamond earrings.”


You need a Liquidation Appraisal to set a realistic asking price.

“I want to donate my necklace to a charity auction.”


You need an Estate Appraisal (Fair Market Value) for your tax records.

Final Word of Advice: Always Use a Certified Professional

No matter which appraisal you need, the most critical step is to choose a qualified, independent appraiser. Look for designations from recognized organizations like the American Gem Society (AGS), the National Association of Jewelry Appraisers (NAJA), or the International Society of Appraisers (ISA). These professionals have the gemological knowledge and ethical training to provide an unbiased, accurate, and well-documented report.

Understanding the different types of appraisals empowers you to get the right valuation for your specific needs, ensuring your precious diamond is properly protected, valued, or sold.

Do you have a diamond that needs appraising? Contact us today to speak with our certified gemologist appraisers and get the right valuation for your needs.