December 2005

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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New GIA Cut Grade for Diamonds

What's important about GIA's new cut grading system?
And just what IS cut anyway?

That Elusive 4th C

Cut has always been the most slippery of the "4 Cs" of diamonds. The other Cs are obvious, even to non-gemologists:

Cut refers to the geometric proportions of the gem. A diamond is a prism that refracts, or bends, light rays, breaking white light into a spectrum of color and directing it to the observer's eye. The optical proportions must be exact to achieve maximum brilliance. A diamond that is poorly cut will lack fire.

For some time gemologists have recognized the best proportions for a round brilliant diamond ("round brilliant" is the most popular shape for diamonds). This diagram shows the ideal cut proportions. The highlighted ones are most critical.

Why does cut matter so much? Because cut proportions can account for 50% of a diamond's value.

In gem cutting, waste is inevitable. On an average, about half the weight of the rough is lost in cutting a well-proportioned stone.

In this illustration, the left figure shows two well proportioned gems cut from diamond rough. The right figure shows how the same piece of rough could yield two larger stones. The larger stones are poorly proportioned and much less attractive, but they have greater carat weight.

Carat weight — size — is what most consumers recognize and are willing to pay for, so many gems on the market are cut to favor weight over beauty. This situation is effectively concealed from consumers by simply not mentioning cut proportions. Cut information is missing from 99% of the appraisals received by insurers (see the survey results for more details). And until now it has also been missing from the reports by the Gemological Institute of America's Gem Trade Lab (GTL), the country's foremost diamond grader.

GIA's New Cut Grading

Beginning in January 2006, GIA will include cut information on its reports/certificates for round brilliant diamonds. This is a major step and has been much anticipated in the gem industry. But here's a caveat: you still have to be on your toes to know what to look for on the certificate.

GIA reports "cut" in two ways.

1. A cut grade: excellent, very good, good,
fair or poor
; and

2. A diagram showing the proportions of the stone.

1. Cut Grade:
The words describing cut grade can, and should, be ignored
by insurers as well as customers. Rather than accepting the cut proportions generally regarded as best — and which GIA itself has taught in its courses — GIA now takes the position that various proportions can produce a beautiful stone. So stones of various proportions may merit GIA's excellent grade. How many diamonds will be sold with certificates saying their cut is poor? These grading terms are basically what diamond cutters (who pay handsomely for certificates) want to see. They have little to do with protecting the consumer.

2. Diagram:
Look to the diagram for the gem's actual cut proportions
. This is the information consumers should use when comparison shopping and insurers should use when pricing a replacement.

It may please customers to have a diamond report grading their stone as excellent, but this word is not descriptive gemologically. Gemologists recognize cut standards, taught by GIA and others, and base their valuations on precise cut proportions (along with other data) — not feel-good words.

People have different ideas of beauty. An individual buyer may not see the difference between an ideal cut diamond and one that gemologists regard as less well-cut, or a shopper may prefer a diamond of different proportions. Buyers who are comparison shopping should be careful to compare the cut proportions (along with the other Cs) when pricing jewelry. Asking for a diamond of "excellent" cut allows too much leeway to provide a true comparison. Many diamonds will come with GIA reports supplied by the retailer, but one "excellent" cut stone is not necessarily like another.

This is also true for the insurer who is acting as a customer: when pricing a replacement, ignore the word describing cut grade and give the jeweler the dimensions shown in the diagram.


GIA will begin issuing its new reports on January 1, 2006. For diamonds graded between August 1 and December 31, 2005, GIA will issue an updated report at no charge if the original report is submitted. It would be a service to policyholders who insured diamonds during this period to inform them of this offer, and it would be of value to you to have the new report on file. You could also take the opportunity to discuss the importance of complete descriptive information on appraisals and certificates. (Diamond reports issued between January 1 and July 31, 2005, can be updated by GIA for a nominal fee.)

American Gem Society (AGS) Laboratories is another highly reputable diamond grading lab. As with the GIA report, you must look to the illustration for complete cut information. The AGS certificate carries cut information in the form of a Sarin report – an illustration of the actual diamond, produced by a machine that measures the diamond and calculates its proportions.

Remember that even a GIA or AGS diamond report is not a substitute for an appraisal. It is only independent verification of the diamond's qualities.

Look for a detailed appraisal, preferably on the insurance industry's standard Jewelry Appraisal (ACORD 78/79), for all information about the piece of jewelry — the stone's qualities (including cut proportions), the metal and setting, a photo of the jewelry, and a valuation.

Since there is such a huge market for "certified diamonds" these days, be wary of counterfeit GIA and AGS certificates. If you have any concern about the authenticity of a GIA report, contact the GIA Gem Trade Laboratory by phone (760/603-4500) or fax (760/603-1814). If you suspect a forged AGS certificate, verify the report number with AGS (702-255-6500).


When pricing replacements, look for cut information on all appraisals and diamond reports. Ignore words like excellent or very good, as these are too vague to be of any use. Look for the numbers.

For a damage claim, have the diamond inspected in a gem lab to determine cut proportions (as well as to verify other qualities) before settling the claim. Remember that cut accounts for as much as 50% of a diamond's value.


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