This can be confusing to most people. I hear all the time that someone bought a piece of jewelry with a GIA appraisal for twice as much as they paid.
The Gemological Institute of America, or GIA, is a school and research institution the pioneered standardized diamond grading. GIA also has a gem grading laboratory, GIA-GTL, that provides diamond, colored diamond and colored gemstone grading reports. These are not appraisal in that they never assign a value.
An appraisal should describe a piece of jewelry and give a value. The value depends on what type of appraisal- fair market or retail replacement value should be equal to the price that was paid, an estate appraisal or willing seller/willing buyer is generally less and a fire sale appraisal is generally the least as it is what the metal and gemstone are worth at a discount to wholesale.
A retail replacement appraisal is what you use to insure an new piece of jewelry and the premium you pay to the insurance company is based on that value. An insurance company will be delighted to take your inflated premiums.
If you ever need to make a claim, you find the "replacement value" in your policy is the insurance company's cost. Most major insurance company have either a wholesale relationship with major suppliers or a preferred retailer who agree to provide the insurance company at cost plus 10%.
So you buy a ring for $1,000.00 based on an appraisal that claims it is worth 2,000.00, sounds like you got a real deal? You get it insured and then your dog eats it. When you make a claim to your insurance company and receive a check for $550.00, your first reaction is to think that those sobs at AIG just screwed me too!
In actuality you have purchased a $1000.00 for exactly what it was worth. It is an unfortunate fact that many companies have relationships with appraisers who will "fudge" the values to preserve the cash flow.