June 2008

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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The Cultured Club

The group has an elitist sound, but its members are jewelry buyers who choose "cultured," or lab-grown, diamonds over mined gems. Expect to see more of them, this wedding season and beyond.

Some observers are calling this the dawn of a "new diamond age." Synthetic diamonds are coming into their own, in response to technology, the economy and the public's taste.

Color Is In

Natural

Movie stars and others in the public eye are flashing colored diamonds, often called fancies. Elton John was seen wearing a 36-carat yellow diamond cross. Eddie Murphy proposed with a canary yellow diamond ring, and Tom Cruise wore a "sizeable" bluish white diamond at his own wedding. Marion Cotillard accepted an Oscar wearing necklaces of light and dark brown diamond beads.

Popular interest in colored diamonds is piqued, and synthetic diamonds are piggybacking on that interest. Natural fancies are extremely rare and prohibitively expensive for most jewelry buyers, but lab-grown gems break through those barriers.

Irradiated Blue

It so happens that it's very difficult, and therefore very expensive, to produce a white (or colorless) diamond in the lab. That will change as technology improves, but right now pinks, yellows, blues, greens and purples are easier to grow, so diamonds in those colors abound. Not all colors are possible, but there's rainbow enough to entice shoppers looking for something colorful and unusual, and with the matchless caché of diamond.

Irradiated Green

Meanwhile, sellers of natural diamonds also benefit from the popularity of color. Diamonds with a yellow cast used to be overlooked as off-color, not good enough for fine jewelry. Now canary yellow is a choice. Diamonds with a brownish cast were once relegated to industrial use. Now the brown is renamed "cognac" and it's a gem color option with all the others.

Marketing & Price

Diamond labs are not hiding their gems' origin but advertising it. Gemesis, a major diamond producer, had a 10-page spread in Town & Country earlier this year. Retailers say many shoppers, far from being put off, are fascinated by the technology involved.

HPHT-Neon

Diamond growers flaunt their color. Then they compare their prices to the astronomical cost of natural fancies worn by the stars, and customers are delighted at the bargains. For instance, one comparison showed BlueNile.com selling a natural 1.5-carat yellow-green diamond for $375,000, while lab-made colored diamonds from Gemesis or Chatham retailed for $2,000-$4,000 per carat.

There are more diamond growers today than 10 years ago, so the market in lab-grown diamonds is increasingly competitive. Although synthetic diamonds have not (yet?) reached the rock-bottom prices predicted a few years ago, there is a significant price difference between natural and synthetic diamonds. The current economic downturn also plays a part in making lab-growns financially more appealing than mined diamonds.

HPHT-Red

You might say that lab-grown diamonds have reached critical mass. The respected Gemological Institute of America, after long refusing to grade synthetic diamonds, last year decided to issue grading reports for synthetics. This GIA "seal of approval" goes far in making lab-grown gems serious contenders in the diamond jewelry market.

 

A Natural Advantage?

Even DeBeers, which has for decades controlled access to mined diamonds, is scared by the proliferation of synthetic diamonds. In an effort to firmly hold the distinction between natural and lab-grown diamonds, it has developed technology — albeit expensive technology — to help jewelers recognize synthetic diamonds.

Some large retailers, like Tiffany or the internet store BlueNile.com, still carry only mined diamonds. But the longer synthetic gems are around, and as production runs yield more stones at larger sizes, the more a traditional resistance to them seems to be breaking down. For many customers, natural or cultured is a non-issue. It looks like a diamond, acts like a diamond, and in fact is a diamond — so what if it's grown in a lab? As one diamond grower remarked: Whether an orchid comes out of the African jungle or is grown in a greenhouse, it's still a beautiful orchid.

FOR AGENTS & UNDERWRITERS

As synthetic diamonds become increasingly popular, insurers must be extremely careful. The price difference between natural and synthetic diamonds is immense, especially for colored diamonds (fancies).

Never assume a diamond is natural just because the appraisal does not mention synthetic. For a colored diamond, insist on an appraisal that states the stone is either natural or synthetic.

Synthetic diamonds can be difficult to detect. Training and special equipment are necessary. Laser inscriptions on the girdle, identifying the manufacturer, may be concealed when the stone is in a setting. Improperly trained (or dishonest) retailers and appraisers may pass on synthetic diamonds as naturals.

The high cost of lab equipment developed by DeBeers to distinguish synthetic from natural diamond puts that equipment beyond the means of most retail jewelers. Therefore, when insuring colored diamonds represented as natural, insist on a Diamond Report from a reputable lab, such as GIA, which employs the best technology available.

GIA is the most respected authority in diamond grading. Not all diamond certificates come from trustworthy labs.  See Spotting a Bogus Appraisal for details.

The GIA now grades synthetic diamonds. The heading on the document specifies that the report is for a "synthetic colored diamond," and the description includes the phrase "laboratory grown." 

Remember that even a GIA diamond report, whether for a natural or a synthetic gem, is not a substitute for an appraisal. A diamond report does not describe the jewelry as a whole, metal, setting, etc., and it does not give a valuation.

It is important to have a detailed JISO 78/79 (formerly ACORD 78/79) appraisal from a competent and experienced jeweler who is a Graduate Gemologist (GG) and a Certified Insurance Appraiser™ (CIA).

FOR ADJUSTERS

The price difference between natural and synthetic diamond is immense. An overpayment could run to tens of thousands of dollars or more.

If the appraisal does not explicitly state the diamond is natural, use every means possible to determine whether it is natural or synthetic. Be especially diligent with colored diamonds.

Be sure to scrutinize the appraisal and sales receipt. If the sale price is too good to be true, the gem is probably a synthetic or an imitation (such as cubic zirconia or moissanite).

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

Inspect the appraisal for terms that mean synthetic, such as grown, created, lab-made, and cultured.

Makers of synthetic diamonds use their names to market their products. Recognizing these names, or working with a jewelry insurance expert who does, could save you tens of thousands of dollars on a claim.

 

UPDATE!

A  California woman has filed a $5 million lawsuit against Jewelry Television (JTV), a home-shopping channel that sells jewelry 24 hours a day. The suit claims JTV sold gems described as rare and expensive red or green andesine labradorites, but the items were actually colorless or yellow common feldspar that had been chemically treated.

The lawsuit is seeking class-action status, estimating that thousands of customers purchased the questionable gemstones.

The lawsuit highlights the dangers of buying jewelry on impulse, or solely on the basis of advertising and hype.  Jewelry purchased through shopping channels and internet retailers should signal insurers to be extra cautious. For further discussion of possible scams and questionable valuations from these sources, see TV Shopping for Jewelry and E-Bay Jewelry “Bargains”.

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