CarolK,
I can't speak for how others do appraisals, but as someone who has done appraisals on pearl jewelry for our clients some time, I can chime in that the most common reason we see people requesting an appraisal is to specify the REPLACEMENT VALUE of the item for their insurance coverage. Replacement value is supposed to be a *reasonable estimate* of how much it would cost to purchase/rebuild a like item if (God forbid) it is lost, stolen, destroyed, whatever.
A legit and reliable appraiser determines this valuation based on looking at today's pearl/gold/diamond/ retail market prices, and/or any labor costs to rebuild an item if it's not an easily obtainable commodity. At the time of a loss, the insurance company does their own research to determine "reasonable" value in the market at the time of the loss.
The point to keep in mind is, an appraisal is supposed to be a protection for the purchaser: a statement of an item's reasonable replacement value at retail prepared by someone who understands its market value. It's not a receipt for how much you paid due to one-time discounts, sales, a "blue-light special", or its sentimental value. These are two different things.
Eric Rautman
@ Anandia Pearls
http://www.anandia.com