(in association with BriteCo) - The diamond market never stands still, yet much of the jewelry industry still relies on static paper appraisals without automated updates that can freeze values. This can ultimately put your clients' jewelry investments and your relationships with them at risk.

You check the IDEX Index daily to trade, so why let clients walk out with insurance appraisals that freeze that value in time? In a volatile market, a static appraisal is a future liability. But, luckily, there's an alternative.

Here's how you can connect your clients with an option for diamond jewelry insurance that also automatically updates the value of their jewelry on an annual basis, based on current diamond price trends. Doing so can preserve your client relationships as it will lead to a more satisfactory diamond buying experience.

The Movie vs. Snapshot Problem

If you think of the average jewelry appraisal as a snapshot, it captures just one moment in the ever-changing story of the diamond market, failing to realize that it's a constantly unfolding plot as diamond price charts fluctuate rapidly.

When your customers only have that single snapshot, they're missing out on all the nuances of how diamond prices trend upward or downward based on myriad factors. The global economy, supply chain issues, global diamond supply, inflation, and even changing sentiment toward lab-grown diamonds versus natural diamonds can all influence the average price of a piece of jewelry.

Meanwhile, most consumers think that the value of their diamond ring or pendant only comes down to the stagnant attributes of the 4Cs: carat weight, clarity, color, and cut quality. 

As such, if they purchased a diamond from their local jeweler several years ago, never updated their appraisal, and now want to sell that same stone today, they may be in for a shock.

The Recent Volatility of the Diamond Index

To get a closer look at how volatile the market can be, we can look at the last few years alone. The IDEX Index reached a peak in March 2022, but by October 2023, the Index had fallen by 30%, due to increasing lab-grown sales, inflation, rising interest rates, and the global economy. 

However, just over the past year alone, real-time asking prices for polished diamonds have surged multiple times in a response to US tariffs. Still, overall, we've seen the price of diamonds trend​ downward when looking at the past few years as a whole.

As such, a diamond appraisal or insurance jewelry appraisal that was made three or four years ago - or even further back - is guaranteed to be off-the-mark today. And that means your customers may be either underinsured or over-insured.

Old Appraisal Methods Put Clients at Risk

Whether diamond prices decline or rise, if your customers' jewelry appraisals are no longer reflective of current changes, it's a real issue, especially if they have jewelry insurance and ever need to make a claim.

Say your client purchased a ring in 2019. At the point of purchase, it was appraised for $10,000, which is the value the client gave to their insurance provider. But they haven't bothered to update their policy since.

Fast forward to today and the ring has been lost or irreparably damaged, and they want to replace it with one of equal value. However, a ring of equal value nowadays would cost $15,000. Regardless, the insurer will only give them $10,000 at most, as that is the dollar amount noted on their insurance policy. Unless your client has $5,000 on hand to pay the extra out-of-pocket amount, they won't be able to replace the item.

On the other hand, say that they find out that their diamond ring is worth less than it was originally appraised for. All this while, they've been paying for insurance premiums based on the original, inflated value. Even though their insurance will pay out enough to cover the replacement cost, they could feel ripped off and angry that they've been insuring the item at a higher value than what it was actually worth.

The 10% Rule

To avoid damage to your reputation and ensure that buyers continue to shop with you in the future, it's a good idea to always follow the 10% rule: If the IDEX Index shows a shift of 10%, up or down, it's time to let clients know they need to update their appraisal.

Not only will this potentially improve your relationship with past buyers, but it will also empower you to reach out to past clients for a reason that will benefit them, creating a touchpoint for new sales.

The Solution: Automated Valuations

The easiest way for you to ensure your clients are having their appraisals updated regularly and paying the correct amount for jewelry insurance is to connect them with an insurance provider like BriteCo that automatically updates valuations on their behalf.

BriteCo's system uses market data to adjust coverage limits for clients annually and automatically, so there's no need for customers to manually seek re-appraisal if they suspect that they need an update.

Additionally, as a buffer and to account for sudden spikes in diamond value, BriteCo jewelry insurance policies always pay up to 125% of a piece's appraised value if a covered item needs to be replaced. This makes it even more likely that, if a customer makes a claim on their policy, they'll have exactly the amount they need to cover replacement costs, without having to pay excess premiums.

BriteCo's Automatic Updates Provide Dynamic Protection

Traditional insurance is static, only protecting clients' valuables at the original appraised price, but BriteCo offers dynamic protection that shifts with the market. Here's how the two compare:

Don't Let Market Volatility Damage Your Client Relationships

In a modern market, protecting the value of your client's purchases is just as important as selling the stone itself. You can build a long-term, trusted relationship with your clients by partnering with an insurance provider that speaks the language of data.

BriteCo will keep your clients' purchases and your reputation safe, regardless of ever-changing diamond prices and market trends. With BriteCo, getting a jewelry insurance price and a jewelry appraisal for insurance can be the easiest, most seamless part of your customers' jewelry shopping experience.

Learn more about how independent jewelers can partner with BriteCo.

Diamond Price Trend FAQs

Why Is the Diamond Industry Struggling?

The mined diamond industry has faced a multitude of challenges in recent years, including the growing popularity of lab-grown diamonds, a reduction in overall demand, and global economic woes.

Are the Average Diamond Prices Dropping?

Yes, while there have been some surges here and there, average diamond prices have been dropping since their 2022 peak.

What Impacts Global Diamond Prices?

There are many factors that can overall impact global diamond prices, including supply and demand, changing public sentiment regarding mined diamonds vs. lab-grown diamonds, the economy, interest rates, and more.

Are There Still Investment Opportunities in Diamonds?

Yes, there are still investment opportunities in diamonds, but it's important to realize that history shows it to be an investment that's volatile and best realized over decades. Additionally, the smartest diamond investments require purchasing stones of an exceptionally high quality and rarity.

Are Diamonds Affordable Now?

While diamond prices have decreased in recent years, you'll still find them for sale at a range of price points. Whether or not they're "affordable" will depend on your budget.