April 2000

JEWELRY INSURANCE ISSUES (formerly IM News), provides monthly insight and information for jewelry insurance agents, underwriters and claims adjusters.

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Jewelry Insurance Issues

Table of Contents

Click on article titles in red


What's a Certified Appraiser? - January

Best Appraiser Credentials - February

Are the diamonds you’re insuring real? - March

Handwritten Appraisals - April


Moral Hazard, Documents and the Bottom Line - January

Ruby and Jade - February

How to mail a diamond - March

Jewelry Insurance Appraisal Standards: JISO - April

Describing a gem's color - May

Why not just put jewelry on the Homeowner policy? - June

GIA Diamond Reports - July

Not just a pretty face - August

Moral Hazards on the rise - September

Hurricanes, fires, floods—and jewelry insurance - October

Inherent vice / wear-and-tear losses are rising - November

FRAUD UPDATE – lack of disclosure, false inscriptions & doctored docs - December


Inflated appraisals—alive & well! Shady lab reports—alive & well! MORAL HAZARD—ALIVE & WELL! - January

Clarity Enhancements v. Inherent Vice - February

How green is my emerald? - March

Cruise Jewelry - What's the problem? - April

Crown of Light®- how special is it? - May

Diamonds at Auction — Big gems, big prices, and the trickle-down effect - June

Are you sure her wedding jewelry is covered? - July

What Affects Jewelry Valuation? - August

What to look for – on the jewelry appraisal, on the cert, and on other documents - September

Bigger & Bigger Diamonds - October

Scam season is always NOW - November

Ocean Diamonds - December


Pair & Set Jewelry Claims and the Accidental Tourist - January

Is that brand-name diamond a cut above the others? - February

Vacation Jewelry – Insurer beware! - March

Apple's Smartwatch – The risk of a wrist computer - April

Why you should read that appraisal - May

Smoking Gun! - June

Color-Grading Diamond: the Master Stones - July

Padparadscha—a special term for a special stone - August

Jewelry Appraisal Fees - September

Insuring a Rolex - steps to take, things to consider - October

Diamond camouflage and how to see through it - November

GIA Hacked! - December


Who Grades? - January

Sales, discounts, price reductions, bargains, specials, mark-downs . . . . and valuation - February

Credential Conundrum - March

Frankenwatches - April

Fakes, fakes, and more fakes - May

Marketing Confusion — What is this gem anyway? - June

12 Reasons Not to Insure a Rolex! - July

Why NOT to insure a Rolex: Reasons 5-7 - August

Why NOT to insure a Rolex: Reasons 8-10 - September

Why NOT to insure a Rolex: Reasons 11-12 - October

The Doublet Masquerade - November

Is the gem suitable for the jewelry? Is this a good insurance risk? - December


Wedding Rings on HO? NO! - January

Silver: the new gold - February

Point Protection - March

Tiffany v. Costco - April

What counts in valuing a diamond? - May

Appraising Jewelry - What's a credential worth? - June

A Cutting Question concerning vintage diamonds - July

Synthesized Diamonds - Scam update - August

Pretty in Pink - Kunzite on parade... - September

Preventing jewelry losses - October

Scratch a diamond and you'll find . . .??? - November

Synthetics in the Mix - December


Advanced Gem Lab - A deeper look at colored gems - January

Whose Diamond? - February

Appraisal Inflation - It Keeps On Keeping On - March

Big Emerald - April

Changing colors and making gems: Are we seeing "beautiful lies"? - May

Diamonds - Out of Africa. . . or out of a lab? - June

Appraiser's Dream Contest - July

GIA & the Magic of Certificates - August

Pricey when it's hot: What happens when it's not? - September

Fooling With Gold - October

Tanzanite – December's stone - November

Branding Diamonds - What do those names mean? - December


Unappraisable Jewelry - January

Replicas - Are they the real thing? - February

Composite Rubies- From bad to worse - March

Jewelry Hallmark - A Well-Kept Secret - April

Non-Disclosure: Following a Trail of Deception - May

Preserving the Diamond Dream - June

Spinel in the Spotlight - July

Jewelry 24/7 - Electronic Shopping - August

Diamond Bubble? - September

Disclosure: HPHT - October

"Hearts & Arrows" Diamonds - November

How a Gem Lab Looks at Diamonds - December


Emeralds - And What They Include - January

Pink Diamonds: From Astronomical to Affordable - February

Palladium-the Other Precious White Metal - March

Bridal Jewelry - April

The Corundum Spectrum - May

How Photos Cut Fraud - and help the insured - June

The Price of Fad - July

Old Cut, New Cut-It's All about Diamonds - August

EightStar Diamonds-Beyond Ideal - September

The Hazard of Fakes - October

Jewelry with a Story - November

Counterfeit Watches - December


Blue Diamond-cool, rare and expensive-sometimes - January

Turning Jewelry into Cash—
Strategy in a Bad Economy
- February

Enhancing the Stone - March

Being Certain about the Cert - April

Every Picture Tells a Story - May

Color-Grading Diamonds - June

The Newest Diamond Substitute - July

What Happens to Stolen Jewelry - August

Jewelry As an Investment - September

Black Diamond: Paradox of a Gem - October

Protect Your Homeowners Market—Keep Jewelry OFF HO Policies! - November

What’s So Great about JISO Appraisal Forms & Standards? - December


Garnet - and Its Many Incarnations - January

Organic Gems - February

Do Your Jewelry Insurance Settlements Make You Look Bad? - March

Don't Be Duped by Fake JISO Appraisal - April

Diamonds in the Rough - May

The Cultured Club - June

Sapphire-Gem Superstar - July

It's a Certified Diamond! 
- But who's saying so?
- August

FTC Decides: Culture Is In! - September

Paraiba Tourmaline – What's in a Name? - October

How Fancy is Brown? - November

CZ – The Great Pretender - December


Moissanite's New Spin - January

Online Jewelry - Buying and Insuring - February

Blood Diamonds - March

Damaged Jewelry, Don't Assume!- April

Chocolate Pearls - May

Appraisal Puff-Up vs Useful Appraisal - June

It's Art, but is it Jewelry?
- July

Diamonds Wear Coats of Many Colors - August

DANGER! eBay Jewelry "Bargains" - September

TV Shopping for Jewelry - October

Enhanced Emerald: clever coverup - November

How do you like your rubies -
leaded or unleaded?
- December


The New Platinum: A Story of Alloys - January

Ruby Ruse - February

How Big are Diamonds Anyway? - March

GIA Diamond Scandal
Has Silver Lining for Insurers
- April

Watch Out for Big-Box Retailers Insurance Appraisals - May

Mixing It Up: Natural and Synthetic Diamonds Together - June

Tanzanite - Warning: Fragile - July

Red Diamonds - August

Inflated Valuations & Questionable Certificates - September

Emeralds - October

Where Do Real Diamonds Come From? - November

Counterfeit Watches - The Mushroom War - December


The Lure of Colored Diamonds - January

Synthetic Colored Diamonds - February

Watches: What to Watch for - March

When is a Pear not a Pair? - April

The Truth About Topaz - May

White Gold: How White is White? - June

One of a Kind - or Not - July

Jewelry in Disguise - August

Valued Contract for Jewelry? Proceed with Caution! - September

Antiques, Replicas and All Their Cousins

Grading the Color of Colored Diamonds

New GIA Cut Grade for Diamonds - December


Synthetic Diamonds - and Insuring Tips - January

Bogus Appraisals and Fraud - February

A Picture is Worth Thousands of Dollars - March

Don't be Duped by Fracture Filling - April

Gem Scams Point to Need for Change - May

What is a Good Appraisal - June

4Cs of Color Gemstones - July

Gem Laser Drilling: The Next Generation - August

Why Update an Appraisal? - September

When to Recommend an Appraisal Update or a Second Appraisal - October

Secrets of Sapphire - November

Will the Real Ruby Please Stand Up - December


Mysterious Orient:
A Tale of Loss
- January

Bogus Diamond Certificates and Appraisals - February

Can Valuations be Trusted? - March

Spotting a Bogus Appraisal or Certificate - April

Counterfeit Diamond Certificates - May

Case of the Mysterious "Rare" Sapphires - June

Politically Correct Diamonds - July

Name Brand Diamonds - September

Princess Cut: Black Sheep of Diamonds - October

Reincarnate as a Diamond - November

Synthetic Diamonds - December


Irradiated Mail/Irradiated Gems - January

Fake Diamonds (Moissonite) - February

GIA Diamond Report - March

AGS and Other Diamond Certificates - April

Colored Stone Certificates - May

Damaged Jewelry: Don't Pay for Nature's Mistakes - June

The Case of the "Self-Healing" Emerald - July

Mysterious Disappearance: Case of the Missing Opals - August

The Discount Mirage - September

What Can You Learn from Salvage? - October

Gaining from Partial Loss - November

Year in Review - December


Colored Diamonds - January

Good as Gold - February

Disclose Gem Treatments - March

FTC Jewelry Guidelines - April

Myths Part I: Each Piece is Unique - May

Myths Part II: Myths, Lies, & Half-Truths - June

New Trend: Old Cut Stones - October

The Appraisal Process - November

Year in Review - December


Deceptive Pricing - January

Gems - Natural or Manmade - February

Jeweler/Appraisal Credentials - March

Fracture Filling - April

Salvage Jewelery - May

Gem Treatments - June

Don't Ask/Don't Tell - A Buying Nightmare - July

Laser Drilling of Diamonds - August

Jeweler Ethics or the Lack Thereof - September

Gem Scam - October

The Truth about Clarity Grading - November

Year in Review - December


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Fracture Filling of Gems

Fracture filling is the filling of surface-breaking cavities or internal fractures with some foreign substance to improve a gem's appearance. Literally thousands of products are used to fill fractures. They range from complex proprietary formulas to 3-in-1 oil.

Before fracture filling After fracture filling The effect of fracture filling is dramatic. Disturbances that mar the entire stone, making it quite unattractive overall, seem to vanish. The enhancement makes the gem much more appealing to the naked eye and greatly increases its (apparent) value.

Fracture filling can be done on virtually all types of gemstones-diamonds, emeralds, sapphires, rubies, and others. The treatment is easy and inexpensive. It disguises a flaw, making an inferior gem look clearer and more valuable, but the flaw can readily be seen under a microscope.

The Gemological Institute of America (GIA) is currently studying the effects of fracture-filling on emeralds. Of the thousands of materials in use, they are concentrating on the 39 most popular ones! They've had to wade through confusing terms and patented ingredients. In some cases, they report, it is not possible to identify the filler because artificial resins can mimic natural ones and a mixture of fillers can conceal the features of the ingredients.

Identifying fillers is only the first step of the GIA study. The GIA's next investigation is more important to both insurers and consumers: determining the durability and stability of the fillers. However, knowing the durability of a filler is relevant only if you know a filler has been used-that is, if you have a reliable appraisal with full disclosure in the first place.

In one legal case, a consumer brought suit against a retailer for selling a ring with a fracture-filled emerald as though it were an untreated, high quality gem. Some time after the sale the stone showed damage and the purchaser filed an insurance claim. The insurer had the stone examined in a gem lab and found it to be fracture-filled. The insurer refused to pay the claim, and in turn sued the retailer, arguing that the policyholder should have been informed that the stone was filled with some foreign material and that such a treatment might not be permanent.

The original retailer insisted that the emerald he sold was a high quality, untreated gem. He said the stone must have been damaged subsequently, perhaps when the ring was sized, and then fracture filled to conceal the damage. The case became a battle of expert witnesses and hinged on responsibility for disclosure of the fracture filling treatment. Ultimately, the plaintiff won a quarter-million-dollar judgment and the retailer went bankrupt.

In this case, the insurer was fortunate that the claim had been made on a damaged stone. The stone in question was available for examination and the jeweler hired by the insurer was knowledgeable. But most jewelry claims-probably 99%-are based on total loss rather than damage, so it is crucial that fracture filling be disclosed on the appraisal.


Fracture filling is not one of the enhancements "usually" or "always" used in treating gems, according to the Gemstone Enhancement Manual, the jewelry industry's standard reference. This treatment adds a foreign substance to the gem, it may be temporary, and it should always be disclosed on the insurance appraisal. The ACORD 78/79 appraisal warrants that all non-commonplace treatments are specifically disclosed. If the gem in the case above had been accompanied by an ACORD 78/79 appraisal, the suit need never have been brought.

The ACORD 78/79 also warrants that the gem was examined in an independent gem lab by a Graduate Gemologist who is a Certified Insurance Appraiser™. In this appraisal, the insurer has first party legal rights in the event of an error.


All damaged stones should be examined in an independent gem lab by a Certified Insurance Appraiser™. It is wise to suspect fracture filling if:

A competent jeweler will be able to see whether or not a foreign substance was injected into the gem. The destruction of a fracture filling treatment is not considered damage to the stone, and the insurer is not liable.

CIA™ Corner

From Warren Finley, CIA™:

Customers often bring in for repair jewelry that we did not sell. Our staff is trained to closely inspect stones for fracture filling, because the treatment can break down during the repair process. If we know the stone is fracture-filled, we can treat it differently. For example, if a mounting needs repair, we would remove a fracture-filled stone before heating the mounting, because heat might damage the filling.

Sometimes fracture-filling is not easily apparent, perhaps because it's concealed by the mounting. As a precaution, our store has prepared a release form stating that it is the customer's responsibility to make us aware of fracture filling. Not all customers volunteer information on the treatment, but when the jeweler states that the stone is fracture-filled, the customer does not contest it. I don't think these customers are deliberately concealing the treatment, they just aren't aware of the fragile nature of fracture filling.

Warren Finley
Finley-Gracer Jewelers
5112 E. 2nd Street
Long Beach CA 90803

Established in 1924, Finley-Gracer is a full-service jeweler offering diamonds, colored gemstones, gold, appraisals and jewelry repair.


Deceptive Pricing

The January issue of IM NEWS discussed deceptive pricing practices, in which retailers artificially inflate their "regular" prices so they can advertise huge discounts. J.C Penny was the defendant in a legal case on this issue, although the practice is quite widespread.

In response to increased attention from the Better Business Bureau, J.C. Penny agreed to change its pricing practices. A spokesman for the chain announced that its "reference prices," against which sales prices are measured, would be offered at least 50% of the time, and that prices in effect less than 50% of the time would not be called "regular" prices. These are very careful rephrasings, and consumers will still have to examine advertising very closely. J.C. Penny also eliminated jewelry from its spring catalog, and this is taken to be a bow to the Better Business Bureau.

However, excessive "discounts" still prevail in the marketplace. For insurers, inflated valuations (like inflated selling prices) are still common, and all the caveats mentioned in the January newsletter are still in place.


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