January 2004

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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Synthetic Diamonds —
and Insuring Tips

Synthetic diamonds have a fraction of the value of natural ones. Replacing a synthetic with a natural could result in an overpayment of thousands or even tens of thousands of dollars. How can you guard against this error?

Our last issue discussed the emergence of synthetic diamonds on the market, the types of synthetics produced, the price attraction for consumers, and the high motivation of the manufacturers. This month we run through some of the issues and marketing tactics that directly affect insurers. Throughout this issue, Tips for Underwriters, Agents and Adjusters are marked with bullets.

Mining diamonds is much more costly than making synthetics, and the best synthetics are almost impossible to distinguish from naturals. The jewelry industry is scrambling. DeBeers, which controls most of the world’s mined diamonds, is working on tools to detect synthetics. Jeweler groups are pressuring the Federal Trade Commission to force diamond manufacturers to label their stones as synthetic. Companies that make diamonds are strategizing about marketing techniques.

About Colored Diamonds

Intense colors in natural diamonds are extremely rare and such stones are valued accordingly. Intensely colored diamonds are called Fancies. An international gem trader recently examined a yellow diamond, which he took as natural fancy, and valued it at $15,000. It was a synthetic Gemesis diamond, produced for under $100.

The Web site of one retailer advertises that its Gemesis synthetic diamonds are graded by gem labs “the exact same way as Natural Fancy Colored Diamonds.” Actually, they are graded the same way any diamond is graded. Bringing up natural fancy diamonds suggests that the value is comparable to a natural fancy, which it is not.

Web sites for synthetics may even link to industry charts for diamond values. These values are based on natural gems, not synthetics. The buyer may be getting a stone of comparable appearance, but it is not of comparable worth.



So much about jewelry insurance depends on disclosure: what did the maker or distributor know about the stone, what did the jeweler who set the stone know, what did the retailer know, what did the buyer know, what did the appraiser know—and how much of it gets on an appraisal so the insurer will know?

With diamonds, the price difference between natural and synthetic is far greater than with other stones. Emeralds, for example, have been synthesized for years, but the price of natural emerald is not so high, so the potential loss in an erroneous overpayment is not so great. For diamond, however, the loss could be tens of thousands of dollars.


Gemesis has taken several steps to deter fraud. It has its lab-made diamonds inscribed along the girdle with the phrase “Gemesis created” and a serial number. However, potential for fraud remains.


What’s in a Name?

Since “synthetic” has unpleasant associations, one producer wants to call its diamonds “cultured.” When Mikimoto developed the cultured pearl, selling for 1/10 the price of natural pearl, consumers switched so completely that cultured pearls are now the norm.



Jewelry, constituting about 10% of all inland marine business, is generally considered a profitable class of insurance. But that could change dramatically as synthetic diamonds enter the market. If inexpensive lab-made stones start slipping in as naturals, the potential for overpayment on claims is enormous. Synthetics are only beginning to enter the market and will not immediately affect insurers. Now is the time for the industry to be proactive in dealing with these developments, before the losses take over and loss ratios plummet.

Now is the time to establish firm guidelines for insuring jewelry. It comes down to relying on people and documentation you can trust. We suggest the following:

Guidelines for Insuring Jewelry

  1. Certification by a Major Lab. For quality diamond jewelry, have on file a certificate from a respected gem lab. Note that not all diamond certificates are reliable. Some are prepared by labs that are not reputable authorities on diamond grading, and many are merely used by retailers as sales tools (see the Spotting a Bogus Appraisal for a more complete discussion). Insist on a diamond report from a highly regarded lab, such as Gemological Institute of America (GIA) or American Gemological Society (AGS).
  2. ACORD Appraisal. For all quality jewelry, insist on an appraisal that gives a detailed description of the jewelry, both stones and setting, and gives a valuation. The typical appraisal today, whether prepared by seller, appraiser or manufacturer, is not suitable for insurance purposes.

    The insurance appraisal should be written on ACORD 78/79, which presents information in an easy-to-understand format. The insurer can readily see whether any necessary information is missing. He will know where to look for details that significantly affect insuring, such as a term like “synthetic” or a Princess cut diamond highly vulnerable to damage.
  3. CIA™ Appraiser. The appraisal should be written by a graduate gemologist who is experienced in buying and selling jewelry and who is trained as a Certified Insurance Appraiser™ in Jewelry.

    Such an appraiser has the training to examine stones in a gem lab and accurately report qualities. He’ll recognize and report gem treatments important to the insurer, such as gem laser-drilling and fracture-filling (more on these treatments in an upcoming newsletter). He’ll know when to be suspicious, as when a too-perfect diamond is not reported as synthetic but probably is (see Synthetic Diamonds ). He’ll be aware when too much of a rare gem, such as yellow fancy diamond, starts showing up on the market. If he suspects a gem is synthetic, he can connect with a larger lab that has equipment to distinguish synthetic from natural diamond.


In general, diamond manufacturers are willing to disclose that the stones are synthetic, but not all gem dealers and jewelry sellers will do so. In some cases the distinction will not even be discussed, and the synthetic diamonds will wind up being sold as natural.

Most important, be aware that synthetic diamond is worth just a fraction of natural diamond. Read carefully all documents on file. Do not assume that a gem is natural unless this is specifically stated on the appraisal.

On a damage claim for a high-priced diamond, always have the piece examined by a qualified gemologist, such as a CIA™, to determine whether the diamond is natural or synthetic (and to be sure its qualities are as stated in the appraisal).

Now is the time to review and update procedures according to the Guidelines above, to head off costly problems in the future.


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