No one wants to consider the unthinkable — like theft, damage or loss — happening to a prized possession. But the reality is these things can happen — so be prepared with the proper insurance coverage and an up-to-date-appraisal of your high-value posessions.
What Is an Appraisal?
An appraisal is an opinion or statement of value. It provides the necessary documentation to substantiate the existence, condition and value of your collection. An appraisal can serve to inform a sale or a donation of a collectible item or help settle an estate. It will also help ensure that a valuable item is insured to its current replacement value, thereby providing protection against market fluctuations and value loss.
It is important to keep in mind that one item can have five different values and that the valuation used will depend on the purpose of the appraisal. The two most common values are:
- Fair market value – the price at which property would change hands between a willing buyer and a willing seller.
- Retail replacement value – most often used for insurance, it is the highest amount that would be required to replace a property with another of similar age, quality, origin, appearance, provenance and condition within a reasonable length of time in an appropriate and relevant market.