December 2001

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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Year in Review

This issue summarizes IM NEWS stories and advice of the past year, to help insurers and agents make their work easier and give policyholders the best service possible.

Color-Enhanced Diamonds

Intensely colored diamonds are extremely rare in nature and have therefore been very expensive and considered collector's items. Technicians are now able to turn cheap brownish and yellowish diamonds into attractive, richly colored gems. The danger is that the enhanced diamonds may be passed off as natural, and the stated value can be many times—even hundreds of times—the gem's real worth.

TIP: Every colored diamond of significant value you insure should have a Diamond Certificate from the Gemological Institute of America, as well as an appraisal. If a color treatment is detectable, it will be disclosed on the diamond certificate.

See January IM News

Laws Governing Gold Jewelry

U.S. law requires that any jewelry labeled "gold" must also be stamped with the karatage, such as 18K. Karatage refers to the gold's purity, that is, the proportion of gold to alloy. Pure gold is 24 karats; 18 karat gold means the piece is at least 18/24 gold. Jewelry stamped as karat gold jewelry must, by law, also bear the manufacturer's hallmark or trademark. This presence of the trademark shows that the manufacturer stands behind the karatage claim.

TIP: Stamping jewelry with karatage and manufacturer's trademark is a great selling point. Buyers and insurers should be suspicious of jewelry described as "gold" that is not stamped with karatage.

See February IM News

What Determines Value in Gold Jewelry

Karatage refers to the proportion of gold to alloy. Workmanship—described with terms such as cast, die-struck, machine-made, and handmade—indicates important differences in quality. The overall weight of the piece is the final factor.

TIP: An appraisal of gold jewelry should include karatage, manufacturer's name, style number of the piece, workmanship, and weight.

See February IM News

New FTC Ruling on Gem Treatments

The FTC ruled this year that jewelers and manufacturers must disclose any gem treatment that "significantly affects the value of gemstones." One such treatment is laser drilling, done to conceal flaws in a lower quality stone.

TIP: Any treatments that affect value should be disclosed on the appraisal (not just verbally to the buyer). Neglecting to mention such treatments cheats the consumer and, if a claim is made, cheats the insurer. An ACORD 78/79 appraisal assures the insurer that all treatments affecting value are noted.

See March IM News

The FTC & Its Jewelry Guidelines

The Federal Trade Commission works to eliminate practices that are unfair or deceptive or that threaten consumers' opportunities to exercise informed choice. The FTC's Jewelry Guides, which have existed in some form since 1918, are not law but they are highly regarded by the jewelry industry as a standard for ethical merchandising. Regarding these most recent changes, the Commission concluded that technology changes so quickly, it would be pointless to name all the treatments that should be disclosed. The guiding principle is not to mislead the consumer.

TIP: If a submitted appraisal does not mention whether or not the gem is treated, and if the valuation is significant, require the appraiser to assure in writing that the gem is untreated. You might take this opportunity to discuss with the policyholder the FTC's role in protecting consumers, and the importance the FTC attaches to disclosure of gem treatments.

See April IM News.

Gold Prices Falling

In February gold reached its lowest price in 20 years, falling to $257 an ounce from its all-time high of $850 an ounce in 1980.

TIP: Perform insurance-to-value (ITV) calculations on a regular basis to avoid inflated valuations.

See March IM News.

Each Piece is Not Unique

The vast majority of jewelry sold comes from outlets like Zales and Macy's, and a certain percentage of these are involved in losses. These are not unique handcrafted items, but mass-produced work that can be described by manufacturer and style number. Even independent jewelers purchase merchandise from suppliers' catalogs. Retailers do not like to disclose manufacturer and style number because that would dispel the image of the jewelry's uniqueness and would also allow the customer to comparison shop.

TIP: When a claim is made, knowing the manufacturer and style number allows the adjuster to comparison shop for a replacement. Insist that this information be on the appraisal whenever possible.

See May IM News.

List Price vs. Valuation

Many retailers set artificially high "list prices" so they can offer discounts and sales. This deceptive practice is so widespread that one judge thought it unfair to punish the single violator on trial "in an industry that appears dominated by many violators." Let the buyer, and the insurer, beware.

TIP: The list price alone should never be the basis for scheduling jewelry, since you have no way of knowing whether the price is inflated. Scheduling jewelry should be based on an appraisal containing complete descriptive information, in enough detail that a jeweler can use it to determine the quality and price of the jewelry described and the insurer can perform ITV calculations. The ACORD 78/79 jewelry appraisal lays out this information in an easy-to-read format.

See June IM News.

Jewelry Replacement Services

Some replacement services claim to have lower prices because they are located in large cities where competition is greater. Some replacement services offer special discounts to insurers. Remember that replacement services can play the same game with insurers that jewelry retailers play with customers: make claims, inflate prices, and offer "discounts."

TIP: Shop around. Get competitive bids on replacements, then decide which service to use.

See June IM News.

New Trend: Old Cut Stones

Dealers in estate diamonds are seeing a proliferation of reproductions of old-cut diamonds, appealing to the taste for antique jewelry. The reproductions may then be passed off as antique and touted as valuable.

TIP: Jewelry is not necessarily valuable because it is old. Styles go in and out of fashion, quality and workmanship vary, and old jewelry may be worth no more than its scrap value. When you are insuring old jewelry, it is important that the appraising jeweler be a Certified Insurance Appraiser™ who is knowledgeable about antique and estate jewelry.

See October IM News.

The Appraisal Process

Of course a jewelry appraisal needs a valuation, but it should be the current selling price, not some imaginary "list price." The appraisal should contain a detailed description, that will be useful to the adjuster in pricing a replacement. And it should be prepared by a graduate gemologist who is also a Certified Insurance Appraiser™ in jewelry.

TIP: ACORD, the nonprofit organization that develops standards for the insurance industry, has incorporated the above standards into its form 78/79, Jewelry Insurance Appraisal.

See November IM News

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