"I think the bourses are in the business of selling diamonds and, from a manufacturer's perspective, it certainly sounds better on the certificate to say the diamond is a slightly included 3 instead of an included 1."
Jerry R. Ehrenwald, president of the International Gemmological Institute
Clarity is the term used to describe the internal quality of a gem. Clarity grade is crucial to determining a gem's value.
A gemologist/appraiser examines a diamond for inclusions, cracks, spots, clouds, or any other blemish or imperfection of any sort. Other things being equal, the lower the clarity grade, the lower the value of the gem.
Fifty years ago, the Gemological Institute of America (GIA) adopted a clarity grading system now considered an industry standard. The GIA system recognizes 10 grading levels for clarity:
IF -- Internally Flawless
VVS1 -- Very Very Slightly imperfect (1)
VVS2 -- Very Very Slightly imperfect (2)
VS1 -- Very Slightly imperfect (1)
VS2 -- Very Slightly imperfect (2)
SI1 -- Slightly Imperfect (1)
SI2 -- Slightly Imperfect (2)
I1 -- Imperfect (1)
I2 -- Imperfect (2)
I3 -- Imperfect (3)
Recently, some gem suppliers have begun describing their diamonds as "SI3" a grade that doesn't exist on the GIA system. They are trying to avoid classifying those diamonds as "imperfect" I1 gems. What difference does it make?
To a diamond grader, each grade level indicates specific things about the type, size and location of inclusions. But a major distinction exists between SI2 and I1. In diamonds of S2 grade or higher, inclusions are visible only under 10-power magnification; at I1 grade and lower, the inclusions are visible to the naked eye. By the traditional grading system, SI3 diamonds are simply I1. Diamond brokers, manufacturers and wholesalers note that there is a much greater pricing gap between SI2 and I1 than between any other two grades, so they see a merchandising need for an intervening grade. The European Gemological Laboratory has included the grade on its certificates since 1992, and the SI3 grade has recently been accepted by the World Federation of Diamond Bourses.
But diamond graders see the new SI3 grade as deceptive. As Ehrenwald points out in the opening quote, SI3 simply sounds better on the certificate.
The GIA, the American Gem Society (AGS) and the International Gemmological Institute (IGI) have no plans to adopt the SI3 grade. Retailers interviewed by National Jeweler magazine say that, even though suppliers may call something an SI3 grade, they will still sell it as I1 because it's less confusing that way.
FOR AGENTS & UNDERWRITING
The SI3 grade does not exist in the jewelry industry's standard grading systems. If you receive an appraisal that grades a diamond as SI3, be suspicious of the other descriptive information. The appraiser perhaps the jeweler who sold the piece may be trying to make the gem sound better than it is, or he may simply have accepted the supplier's clarity grade without examining the gem in his own lab.
By all means use ACORD 18, Jewelry Appraisal and Claim Evaluation form, to determine whether the appraisal supplies the necessary information. If it does not, suggest that the policyholder get an appraisal by a trained gemologist (GG or FGA+), who will examine the gems in his own lab and will use the industry standard grading system.
If you are settling a claim based on an appraisal that grades a diamond as SI3, be aware that this is the equivalent of I1. In communicating with jewelers about a replacement, it would be better to give the grade as I1, since this follows the industry standard.
For a damage claim, always have the gem examined in a gem lab by a trained gemologist (GG or FAG+), preferably one who has additional insurance appraisal training. One course offering such additional training is the Certified Insurance Appraiser™ (CIA) course of the Jewelry Insurance Appraisal Institute, Oakland, CA.
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