May 2007

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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Chocolate Pearls — the Newest Flavor

Not since Cleopatra won a wager with Mark Antony by dropping her pearl earring into a goblet of wine, and then drinking down "the most expensive meal ever," has this jewel sounded so delicious. If Cleopatra's trick was the meal, chocolate pearls must be the dessert.

Chocolate is such a popular flavor it even sells jewelry. Making pearls a chocolaty brown is basically a treatment to produce another appealing version of an enduringly popular gem.

A Brief Look
at a Long History

Pearls have been highly regarded symbols of wealth since ancient Greece, Egypt, China, Imperial Rome, and Persia. Here in the West, Native Americans — and later, the colonists — harvested freshwater pearls from rivers and lakes, and saltwater pearls grew in beds along the coasts of Central and South America.

Only a very small percentage of oysters produce pearls. And only a fraction of those were ever harvested by humans, and only a handful of those harvested were of a desirable size, shape and color. This means that for centuries natural pearls were available to only the wealthy, royalty and the aristocracy. 

By the 19th century, the supplies of natural pearls began to dry up due to overharvesting and pollution caused by industry. Today, fine quality natural pearls exist primarily in private collections and are quite expensive.

For example, the "Baroda Pearls," a two-strand necklace of 68 impeccably matched graduated pearls, was recently offered at auction by Christie's. The necklace was considered the cornerstone of the Royal Treasury of the Maharaja of Baroda, one of the most prominent jewelry collectors of the 19th century. It shattered world auction records by selling for $7,096,000.

Enter the Cultured Pearl

Around the turn of the 20th century, Japanese researchers discovered techniques for cultivating pearls. Kokichi Mikimoto, who combined the best of the new techniques with creative and  energetic marketing, is responsible for today's worldwide cultured pearl industry. Now instead of divers hunting, often in vain, for natural pearls, pearl farmers can cultivate crops of them.

Cultivated pearls grow the same way as natural pearls, but the process is initiated on purpose rather than by accident. A foreign substance enters (or is inserted into) the oyster. In response, the oyster surrounds the irritant with nacre, the same substance that lines the inside of the shell (where we call it "mother of pearl").  The nacre builds up in layers around the irritant to form the pearl.

Pearls tend to keep the shape of the initial irritant, or nucleus, so perfectly round pearls are extremely rare in nature. For cultured pearls, technicians can insert a round nucleus and thus produce more rounded pearls.

In nature, it's estimated that only one in 10,000 oysters produces a
gem-quality pearl. Pearl farmers, by contrast, harvest pearls by the thousands. In terms of both quality and availability, the farming of pearls has revolutionized the pearl industry.

Chocolate – and other Treat(ment)s

Chocolating the pearl is the latest fashion treatment. Pearls already come in a range of natural colors, including whites, yellows, golden, pinks, blues, grays, greens, and black, along with other "overtone" colors. Brown adds another color choice.

Chocolate pearls on the market come from several sources, which all have proprietary recipes for producing the color. One independent lab carefully examined several chocolate pearls, of various shades of brown, produced by Ballerina Pearl Co. The lab concluded that no coloring agents were added and that the color most likely resulted from bleaching black cultured pearls. Other sources may use other techniques to produce the brown color.

Pearls are routinely cleaned and polished, and are usually bleached, before sale.

Some pearls are routinely "pinked" to given them a rose overtone. For decades  silver nitrate has been used to darken the nacre, producing a rich black color. Other dyes may be added to produce colors other than black.

Irradiation is sometimes used to change the pearl's color by darkening the nucleus. Irradiated saltwater pearls appear gray or blue and may acquire an intense metallic sheen. All these treatments enhance the beauty of the pearl and do no harm.

On the other hand, coating a pearl to enhance its luster is a deceptive practice. This is equivalent to painting it with a coat of clear nail polish. The coating may eventually chip or peel, leaving a poor-quality, low-luster pearl.

How Pearls Are Valued

An appraisal for pearl jewelry should state whether the pearls are cultured or natural (the vast majority of pearls sold today are cultured), freshwater or saltwater, and should give origin, shape, color and overtone, luster, nacre, blemish, number of pearls on a strand, size in millimeters, and clasp and mounting information.

The appraiser looks at the luster and surface quality of the pearl. The surface may have cracks, bumps, pits or scratches. Sometimes a blemish is concealed by the setting. A pearl may exhibit signs of damage from bleaching or dying.

Thickness of the nacre is very important, since it helps determine how durable the pearl will be. Pearls are by nature vulnerable to damage. Their toughness rating is "poor to fair" (they can break or chip under impact) and their hardness rating is only 2.4 to 4.5 on the Mohs scale of 10 (they can be easily scratched, even through normal wear and tear).

Unfortunately, there is no universally accepted system for grading pearls as there is for diamonds.  However, all  the characteristics discussed above set the value of pearls, so they should be noted in detail on the appraisal.

It's especially important that the appraisal be prepared by a reliable jeweler, such as a Certified Insurance Appraiser™. The appraiser should be experienced in buying and selling pearls, have the training to provide accurate descriptions and the lab equipment for proper examination of the gem, and be aware of marketing trends and deceptive practices relating to pearls.

A Sample Scam

Beware of writing policies for "investment" gems that come in plastic bags with labels warning that the gems will lose value if the bag is opened. This is a red flag for fraud! A large carrier was recently taken for $120,000 over several strands of pearls insured in such a scam.

For a policy in that price range, an insurer should certainly require a second appraisal. If the gems cannot be examined for appraisal, they should not be insured.


Be sure the appraisal comes from a jeweler who is a graduate gemologist (preferably a CIA™), who deals regularly with pearls, and who has examined the jewelry in a gem lab.

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The appraisal should contain a detailed description, including all characteristics specific to pearls, as  listed on the JISO 78/79 appraisal.

Check that the appraisal discusses treatments:

Treatments such as bleaching to improve color or dying to achieve rose, blue or gold overtones are "usual" treatments for pearls  (as determined by the jewelry industry's Gemstone Information Manual.) These "usual" treatments are assumed to have been performed on pearls.

Treatments that should be specifically stated on the appraisal include the use of irradiation, heat or chemicals.

If pearls have not been subjected to treatments, the appraisal should state that the gems are untreated, since this could increase their value.


Examine damage claims carefully. Pearls are highly vulnerable to damage, even from normal wear and tear. They can also be harmed by a jeweler's torch and though improper cleaning by chemicals or boiling.


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If you are working with a non-JISO appraisal, use JISO 18, Jewelry Appraisal & Claim Evaluation form. Refer to the section on pearls to organize information from the appraisal in hand and to be sure you have all necessary details for pricing a replacement.

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