Canadian Underwriter

Appraising Contents

October 3, 2016   by John Grow, Partner, Prestige Evaluations

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When a consumer with valuable contents – such as jewellery, collectibles and fine art – buys a home insurance policy, choosing a qualified appraiser is in the best interest of the broker, the policyholder and the insurance carrier. However, just as not all carriers and brokerages are created equal, not all personal property appraisers are created equal.

Policyholders frequently rely on many types of appraisers, including real estate, immovable property, business valuation, machinery and equipment. In each of the aforementioned specialties, the property in question needs to be appraised by an educated professional with a strong financial background and industry knowledge.

The associations to which those appraisers belong is not something to be taken lightly. Many belong to the American Society of Appraisers (ASA) or the International Society of Appraisers (ISA). Such accreditations provide a way for a client to verify credentials and membership.

John Grow, Partner, Prestige Evaluations

John Grow, Partner, Prestige Evaluations

In a home, contents sometimes include more than just furniture and household items. Some homes also contain fine art, antiques, jewellery, watches and clocks, musical instruments, furniture, household contents, artifacts, historical items and military equipment.

An appraiser who estimates the value of such items needs a proper educational background in the field, plus an appreciation of the maxim that the more one learns, the less one knows.

Many appraisers will be covered not only by errors and omissions insurance, but also by liability insurance in case they accidentally damage the property they are inspecting. For example, an appraiser may accidentally put his or her hand through a piece of valuable art or drop a fragile item that is worth thousands of dollars.

With ISA – which has chapters in Canada – the combined knowledge that each member brings to the table is very large, and that knowledge is shared.

The membership requirement is strict. In order to qualify for membership, one needs to go through valuation courses and Uniform Standards of Professional Appraisal Practice (USPAP). In addition, membership requires each person to maintain a number of professional development credits per year, and to be involved within ISA chapters.

There are three member levels: Member – ISA; Accredited Member (ISA-AM); and Certified Member, or ISA-Certified Appraiser Personal Property (CAPP).

In addition to the requirement to pass exams and obtain continuing education credits, a member needs to have a background in the field in which he or she specializes and needs to go through peer review.


Unfortunately, not all appraisers have the same qualifications. Some people take a few courses and call themselves “certified appraisers,” but do not belong to a society such as ISA or ASA.

The terms “Certified & Accredited”, “USPAP-certified” or “Licensed Certified Appraiser” sound very nice, and look good on paper. However, a real professional appraiser is not an auctioneer, an antique or fine art dealer, or a person who handles estate sales.

An auctioneer or dealer could provide a sales estimate, but that is not an

appraisal. A qualified appraiser can provide a verbal opinion of value, as long as he or she maintains a proper work file, which includes photographs, comparable research and documented methodology. The work file should include notes on details – such as condition, make or special marks – of the piece. For example, with art work, a work file might have information on whether or not it has been exhibited or catalogued.

There is always the possibility that an insurance carrier will dispute the policyholder’s appraisal of the value of expensive content. Therefore, there are numerous benefits – to the broker, the insurer and the insured – of using a real appraiser.

“As an insurance brokerage, we find that having our clients’ collectibles and jewellery appraised by a member of the (ISA) gives us peace of mind,” reports Colette Mendenhall, president of ASSURART Inc. “We are not concerned that the validity of the appraisal will be questioned by the insurer in the event of a claim.”

Both an insured and a carrier can be assured that a real professional appraiser would not overestimate the value of the item. In the event of a claim, a professional appraiser could provide documentation that a claims examiner could use to determine whether there is a total loss or whether the item could be repaired or restored.

There have been numerous cases in which a claimant provided a two-page manifest of antique items or fine art, with just one line and an amount per item. This does not benefit the client if there is a claim – especially if the claim is denied due to lack of documentation.


When using an appraiser who is not properly qualified, there is a risk of having valuables undervalued. There is also the risk of an insurance policy being written for an amount that is a lot lower than the replacement cost.

An additional risk is that the item could be overvalued, both in market value and replacement cost, thereby resulting in the client paying a higher premium than warranted.

A qualified appraiser would also not be in a conflict of interest because he or she would have no vested interest in the items that are being appraised. Properly qualified appraisers are not art dealers, antique dealers or persons who would buy and resell. Some appraisers do broker items for their clients, but in those cases, the relationship changes from an appraiser to that of a broker.

Among the fastest-growing markets for insurance underwriters are watch collectors and watch-buying co-operatives.

Today’s professionals are buying antique, vintage and current watch models. Many antique and vintage watches are irreplaceable. The type of appraisal report required for insurance underwriters is much more detailed that what some jewellery stores might provide.

A personal property appraiser is more of a generalist, with expertise in appraisal studies. A fine art appraiser might have his or her interest, but the types of work, medium and subject matter is vast.

This is why a serious appraiser will belong to an appraisal society, seek the help of fellow appraisers and increase his or her level of education in the field through specialized courses.

—John Grow, Partner, Prestige Evaluations

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