October 2011

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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Disclosure: HPHT

Over the past year or two, gemological labs have received a large influx of HPHT-treated diamonds. Jewelers are also seeing more of such color-treated diamonds.

The twin issues here are: Valuation & Disclosure.

What is HPHT?

HPHT can "de-colorize" pale yellowish diamonds.

High pressure and high temperature in the earth make the diamond. In a lab, high temperature and high pressure (HPHT) can change a diamond's color or even create a diamond.

Exposing a diamond of weak or unattractive color to extremes of pressure and temperature can vastly improve its appearance. The treatment can de-colorize pale yellow diamonds, improving their color grade from H to F, for example. It can also change unattractive brownish diamonds into radiant blues, greens, yellows, and even the difficult but very desirable reds.

HTHP treatment has been around for a dozen years and the color changes it produces are considered to be permanent. Some brands specialize in this process, offering lushly colored diamonds at a fraction of the price of natural "fancies."

Because of the huge price difference between natural and treated diamonds, disclosure is essential.

HPHT can produce vibrant colors.


Is HPHT a Treatment? YES

Brands that sell HPHT diamonds prefer to avoid using the word "treatment" because of its associations. Like treating an illness, treating a gemstone suggests that something was wrong with the gem, and that requires more explanation and results in buyer hesitation.

Instead, companies using HPHT talk about unmasking or revealing Nature's colors. Bellataire, an early developer of HTHP treatment, was influential in getting GIA to use on its certificates the phrase "HTHP Process," rather than "HPHT Treatment."

The FTC requires disclosure of gem treatments. Whether called a treatment or a process, HPHT should be disclosed on the appraisal, the diamond certificate, and the sales receipt.

Are the labs being "tested"?

Laser inscription on diamond's girdle says the stone is color-treated.

Over the past decade, the jewelry industry has promoted disclosure practices around HTHP. Early producers of color-enhanced gems were proud of their accomplishment and laser-inscribed their brand on the girdle of the diamond. GIA's protocol is to require laser inscriptions, either with the brand name or with words such as "HPHT Processed" or "Irradiated," before the diamonds are submitted for grading.

The current problem is that labs have been receiving HPHT–treated diamonds without such inscriptions-that is, without disclosure. Also, they are receiving larger diamonds than previously. This suggests that new companies are using different versions of HTHP and "testing" the labs, to see if the labs are able to detect the treatment.

New gem enhancements are always under development and old methods are constantly being refined and improved. Sophisticated analysis relies on specialized equipment for detecting enhancements, just to keep up with gem-treatment technology. It's only the major grading labs that can afford much of this equipment; the average jeweler cannot.

GIA is contacting its clients both to learn the source of the treated diamonds and to remind them that failure to disclose treatment at all stages of the pipeline–dealer, distributor, and retailer–is unacceptable. The lab is also reviewing each transaction to determine whether it's appropriate to turn over relevant information to trade organizations and law enforcement bodies.


There is a huge value difference between a treated diamond and an untreated one.

Do not assume a diamond is untreated simply because a treatment is not mentioned. The appraisal should disclose any treatments, or it should specifically state that the gem is untreated.

Always insist on two appraisals when insuring high-value jewelry, especially a fancy colored diamond. At least one should be written on JISO 78/79 by a jeweler who is a Graduate Gemologist, and preferably also a Certified Insurance Appraiser™.

High-value diamond should always have a certificate from a reliable lab, such as GIA. Some gem treatments are difficult to detect and require equipment that only major gem-grading labs can afford.


If the appraisal was not written on JISO 78/79, use JISO 18 to verify that all necessary information was given on the appraisal.

Compare valuation with the purchase price. For fancy colored diamonds, a price that is "too good to be true" is a major red flag. Do ITV (insurance to value) calculations to check for a major discrepancy between the purchase price and replacement cost. JEMs® software makes ITV calculations easy and guards against fraud.

Check the appraisal and other documents for words like treatment, enhancement, process, HPHT, or irradiation. All these terms denote treatments, which lower the value of the gem compared with an untreated stone.

Pay close attention to the use of the word "natural." A natural diamond is one made in the earth (rather than lab-grown); a natural stone subjected to HPHT enhancement is still natural but its color is not.

In settling claims for high-value diamonds, be wary if

Check the appraisal and other documents for brand names. Brands are often associated with quality, treatments, or lab-created gems.

If you are uncertain about any names or terms on the jewelry documents, it may be useful to consult a jewelry insurance expert before settling the claim. The expert, working on your behalf, can help determine whether the valuation is accurate.

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