December 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


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.

Irradiated Gems

Even comparatively small amounts of radiation (such as the amount used by the Post Office to irradiate mail during the anthrax scare) can seriously affect some gems. In fact, irridiation is an inexpensive gem treatment often used to enhance the appearance of gems. Although they look more attractive, their value is not increased.

TIP: Irradiation is a treatment that should be disclosed on the appraisal. If you are insuring a gem of substantial value, be sure the appraisal states that it has not been treated.

See January IM NEWS.

Moissanite: A Diamond Simulant

Moissanite is fake diamond — almost as hard as diamond, even more brilliant, and costing about one tenth the price. Worst of all, it fools many professionals.

TIP: A trained gemologist can easily distinguish moissanite from real diamond under microscope magnification. Be sure a diamond appraisal is prepared by a Graduate Gemologist who is a Certified Insurance Appraiser™ in jewelry.

See February IM NEWS.

Fake Diamond Substitution

One jeweler was charged with several counts of theft for switching diamonds with moissanite, on rings that customers left with him for cleaning or resizing.

TIP: Recommend to policyholders that they have an appraisal done following any occasion when their jewelry has left their possession, such as for cleaning. This insures that no substitution has taken place.

See February IM NEWS.

Stellar Gem™ is CZ

A company called Stellar Gem™ is selling a new diamond simulant. It claims its product is visually indistinguishable from diamond, but this material is really cubic zirconia, very inexpensive fake diamond.

TIP: Stellar Gem™ stones have only a fraction of the value of diamonds.

See February IM NEWS.

GIA Diamond Report (or Certificate)

“Certified Diamonds” is advertising hype. Certificates from disreputable or non-existent labs are worthless testimonies. The Gemological Institute of America established gemstone grading systems that have been adopted internationally. Other organizations offering diamond certificates use their own grading systems, which are not understood outside their own labs.

TIP: For identifying diamonds, or for settling disputes over qualities of particular gems, a GIA Diamond Report is regarded as an impartial arbiter.

See March IM NEWS.

Diamond Certificate vs. Appraisal

Diamond certificates leave out information about cut. (Because most diamonds are poorly proportioned to increase carat weight, there are political pressures within the diamond industry to keep cut information off the certificates.) However, cut measurements account for half the stone’s value, so you’ll want to be sure to have an appraisal containing this information. An appraisal on ACORD 78/79 includes cut proportions.

TIP: Be sure the submitted diamond certificate is for the stone being insured. That is, check that the measurements, weight and proportions on the certificate match those on the appraisal.

See March IM NEWS.

AGS Diamond Certificate

The American Gem Society offers three documents describing diamonds. The most useful to insurers is the AGS Diamond Quality Report, which includes all information given in the GIA report. It also carries a Sarin Report — an illustration produced by a machine that measures the diamond and calculates its proportions.

TIP: Pay attention to the Sarin illustration on the AGS Diamond Certificate, as it contains measurements not listed in words on the report.

See April IM NEWS.

Colored Stone Certificates

Color is the most important determinant of value in colored stones, accounting for 50% of their value. Unfortunately, none of the colored stone certificates available describes gems in terms of hue, tone and saturation.

TIP: When insuring a colored stone of value, ask for an appraisal even if there is a colored stone certificate. Look for an appraiser who is a Graduate Gemologist and is knowledgeable about colored stones, and be sure the appraisal describes the stone in terms of hue, tone and saturation — as does ACORD 78/79.

See May IM NEWS.

Dealing with Damaged Jewelry

Having damaged jewelry examined by an independent appraiser in a gem lab almost always yields useful information. An exam may show that the stone was subjected to a treatment such as fracture filling, which makes it more vulnerable to breakage. Such treatments should be mentioned on the appraisal but often are not. The exam may also reveal that the value of the gem was greatly exaggerated.

TIP: For any item that could lead to substantial claim payment, have the piece examined by a professional gemologist in a gem lab. Ask for a complete description of the gem on an ACORD 18 form. Ask for an estimate of the cost of repair and for the salvage value of the damaged stone. Do not indicate that you will have the repair or replacement done through this jeweler.

See June IM NEWS.

The Self-Healing Emerald

Gemological language is quite precise. Color descriptions do not depend on the poetic skills or hype of the appraiser, but have specific, agreed-upon meanings. For instance, color tone might be described as “medium light,” saturation might be “very slightly grayish.” Precise descriptions are important since the price of a one-carat emerald, for example, can range from $40 to $10,000 depending on the quality.

TIP: An insurer, untrained in gemology, cannot recognize these fine distinctions in terminology. When you are insuring a colored stone of high value, recommend an ACORD 78/79 appraisal, prepared by a Graduate Gemologist with experience in colored gems.

See July IM NEWS.

Convenient Disappearance:
The Case of the Missing Opals

The insured bought the opals as an investment, and 10 years later they were lost. Investigations revealed that the opals were of low quality and overpriced, and all attempts to sell them over the years had been unsuccessful. One jeweler described them as “big and ugly.” Although the insurer couldn’t prove the opals were not indeed lost, investigators were able to arrive at a more realistic valuation, saving the insurer 38% on the settlement.

TIP: In the absence of complete descriptive information, a replacement jeweler will tend to sell you gems at the top of your limit of liability. To get an accurate and detailed description of jewelry being insured, ask for an appraisal on ACORD 78/79.

See August IM NEWS.

The Discount Mirage:
A Cautionary Tale for Insurers

A diamond ring was purchased for 10,895. A year and a half later a loss claim was filed and the adjuster went to the selling jeweler for replacement. Suddenly the retail price had increased to $12,800, but the jeweler was willing to sell it to the adjuster for $5,375. It looked like a great discount — until the adjuster put out a request for competitive bids. The insurer was able to get the ring from another jeweler for $3,550, well below the first “discount” offer.

TIP: Any jeweler can claim to be offering the insurer a discount. For all jewelry of substantial value, get competitive bids.

See September IM NEWS.

What Can You Learn from Salvage?

Many insurers simply replace a damaged piece, paying out the full limit of liability. By having an independent appraiser examine the damaged jewelry, or the remaining earring of a pair, you can learn whether the original appraisal description and valuation were accurate; whether the jewelry can be repaired for considerably less than a replacement; a stone’s value as salvage; whether the salvage stone can be recut and sold. Such information can save the carrier thousands of dollars.

TIP: A jeweler who knows you will either repair or replace through him will most likely recommend replacement, since it brings him greater profit (and he may not even know how to do repairs). It is in the insurer’s interest to have an independent inspection to assess damage and estimate repair costs. With salvage, get quotes from several jewelers before selling.

See October IM NEWS.

Gaining from Partial Loss

For cars, it’s assumed that damages will be repaired unless repair costs exceed the car’s current value. This is how jewelry should be handled. An expert working on behalf of the insurer can examine the jewelry, determine the cost of repair/replacement, give the salvage value, and make recommendations (such as recutting the stone and selling it). The expert supplies all this information to the adjuster in a standardized format, including photo, and the adjuster makes the decisions.

TIP: The insurer’s expert works with the insurer’s interests in mind. His aim is to increase the insurer’s profits, not the jeweler’s.

See November IM NEWS.

Next month:

Mysterious Orient: A Tale of Loss

Jade, death, theft, substitution, documents — the makings of a good mystery story. For some claims, the adjuster must be part sleuth.


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