May 2002

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

2017

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

2016

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

2015

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

2014

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

2013

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

2012

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

2011

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

2010

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

2009

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

2008

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

2007

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

2006

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

2005

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
October

Grading the Color of Colored Diamonds
November

New GIA Cut Grade for Diamonds - December

2004

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

2003

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

2002

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

2001

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

2000

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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Colored Stone Certificates

How are colored stones graded and valued?
What about certificates for colored stones?

Rubies, sapphires, emeralds and other colored stones are a much more complicated world than diamonds. They are more difficult to judge and classify. For diamonds, the most important criterion for value is cut. For colored gems, it is color.

Grading colorless diamonds is fairly straightforward — the less color the better. An appraiser can compare any given diamond with a standard set of color grading stones. Based on these grading stones, he assigns a GIA letter grade from D to Z, giving a very precise designation of diamond color.

With other stones, the color differences are much more variable and often quite subtle. Before the 20th century there was no generally accepted system for describing colors. Then Albert H. Munsell, an American painter and art instructor, identified three basic qualities of color — hue, tone, and saturation. The GIA adopted Munsell's principles to create gemstone color grading standards.

HUE

The GIA specifies 31 gemstone hues. They include terms such as blue, slightly greenish blue, very slightly greenish blue, bluish green, and so forth. The GIA has prepared a color chart showing the hues and their designations.

TONE

Tone refers to the lightness or darkness of a color. The GIA has determined 9 levels of tone, ranging from very very light to very very dark.

SATURATION

This is the degree to which a color departs from a neutral (gray) sensation. Saturation can be thought of as the relative purity of a hue. The GIA specifies 9 terms, such as brownish, grayish, moderately strong, and vivid.

The precision of these designations for hue, tone, and saturation (see charts) is important because color accounts for 50% of a colored gem's value.

Colored Stone Certificates

There are several certificates for colored stones. Unfortunately, none of them is up to the quality of diamond certificates (see March & April issues), and the overall value of the reports on colored stones is questionable.

GIA Identification Report

The Gemological Institute of America's report gives shape, measurements, and weight. It mentions whether the stone is natural or synthetic and whether the color is natural. It may also indicate whether the gem has been subjected to treatments. It does not mention clarity. As to color, it gives only hue. It does not give tone and saturation, so the grading for color — 50% of the gem's value — is worthless!

AGTA Identification Report

The American Gem Trade Association gives shape, measurements, weight and determination as to whether the stone is natural or synthetic. It includes a photo. In our example, the report also mentions that the examined stone was loose (determinations are more likely to be accurate when a stone is examined loose rather than in a setting). Certificates will vary somewhat depending on the stone type (i.e., ruby v. sapphire).

In reporting that a stone was not heat-enhanced, the report adds the comment that it is rare for a ruby/sapphire to not be enhanced by heat. This lack of heat treatment adds value to the stone. AGTA also gives the geographical origin of the ruby, which in some cases can affect value (for example, Burma rubies and Kashmir sapphires have high values). A chart at the bottom of the report shows the tests carried out in the examination of this gem.

However, as to color, AGTA gives the ruby's hue only as red, the sapphire's hue only as blue. These are vague (especially since all rubies are by definition red). The report does not use one of the specific hues from the GIA scale, does not give tone or saturation at all, and does not mention clarity. Therefore, the color grading is worthless!

EGC Gemological Report

The European Gemological Center's report gives shape, weight and measurements, tells us that the stone is natural and there is no evidence of color or clarity enhancement. It gives evaluations for finish, brilliancy and proportions, and includes some cutting information. A photo of the gem is included.

The report includes gemological properties, but these are properties of the gem material in general and not relevant to the grading (or valuation) of this gem. EGC gives a clarity grade based on its own system (not the widely accepted GIA system). No chart is given to show what this grade means, so it is useless. The hue is given only as green. Again there is no indication of tone or saturation, so the color grading is worthless!

AGL Colored Stone Certificate

American Gemological Laboratories' certificate gives shape, weight, measurements, and some cut information, tells whether or not the stone is natural, and gives the country of origin. It grades proportions and gives information on brilliancy and finish.

The certificate includes a labeled diagram of a cut stone. This is not a Sarin report — that is, it is not an illustration produced by the machine that measures a stone and calculates its exact proportions. Instead, this is just an illustration showing names for parts of the stone and is not relevant to identifying this stone. The color information and clarity grade follow a system unique to AGL, so it is unreadable to anyone else.

This is unfortunate, as AGL's certificate is by far the best of the certificates available in the USA. Should AGL decide to state the color and clarity grading in GIA nomenclature and include a Sarin report/diagram (both quite easily done), this would be a very good report, worth recommending to insurers.

For Underwiting

Unlike diamonds, which are valued primarily on cut proportions, colored stones derive half their value from their color — described in terms of hue, saturation and tone. Colors of stones can vary widely. Sapphires, for example, can be not only blue but even variations of pink, orange, purple and green.

Since none of the certificates carries sufficient color information, it is crucial to have an appraisal that does. Look for an appraiser with at least three years experience, who is a Graduate Gemologist and knowledgeable about colored stones. Be certain that all color elements (hue, tone and saturation) are stated. Ideally, have an appraisal on the ACORD 78/79 form.

Colored stones from certain countries have particularly high values. If you are insuring a high-priced stone, have a certificate stating the gem's country of origin. It should also state any treatments (or lack thereof).

Remember that, although GIA's diamond certificate is good (as discussed in the March issue), its colored stone report is not.

FOR CLAIMS

While there are fewer claims on colored stone than on diamonds, colored stones usually have much higher markups and generally have inflated valuations. Most buyers are totally unfamiliar with colored stones, and the pricing abuses are great. For example, consider topaz, sapphire or amethyst. How many buyers (or insurers) know that the typical one-carat stone has a replacement cost of about $24.00 for topaz, $174.00 for sapphire or $3.00 for amethyst? Surprised?

Most natural stones are treated, or "enhanced," to make them look more appealing. However, value is based on the real condition of the stone, not its look to the naked eye.

NEWSFLASH!

JCRS and AAA-Missouri (affiliate of the nationally-known auto club/insurer) win Jewelry Claims award. AAA achieved a 40% reduction in paid out claims while reducing handling costs by 50%. For carriers that offer homeowners and/or Inland Marine policies, insuring jewelry can be problematic for a number of reasons... full story

Read the complete Process Redesign Case Study (pdf) which explains JCRS' award-winning jewelry claims solution!

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