April 2014

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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Frankenwatches

A large number of watches sold as brand name timepieces contain parts that are fake—parts cheaply manufactured to mimic the brand or simply taken from cheaper watches. In the vintage watch market, these cobbled together timepieces are known as frankenwatches.

Apparently pop star John Mayer discovered a number of such pieces in his own collection. In March, Mayer sued a Los Angeles watch dealer for selling him seven very expensive vintage watches that contained non-authentic parts. He’s asking $656,000, the price of the seven watches in question.

Mayer isn’t just a star with cash to spend. He’s been a sophisticated collector for many years and owns more than 100 watches. He’s even considered by those in the field to be something of an authority. He served on the jury for the Grand Prix d’Horlogerie de Genève, the world’s most prestigious award in watchmaking.

Robert Maron, the dealer who sold him the goods, is a “watch broker to the stars” and regarded as an expert in ultra-high-end vintage timepieces. Over the past several years, Mayer reportedly bought $5 million in watches from him. Occasionally Maron would advise Mayer that a particular watch was probably not authentic, and Mayer would not buy it. So, both parties supposedly know vintage watches.


Patek Philippe with non-original parts

Unlike Dr. Frankenstein’s monster, a frankenwatch isn’t necessarily easy to spot. A high-end watch is considered counterfeit if any of its parts are not authentic, which is a challenging standard.

Watch specialist Elizabeth Doerr comments, “As anyone in the vintage wristwatch scene will attest, no one is truly an ‘expert’ when it comes to vintage Rolex, which is an exceedingly tricky subject. It is precisely this ‘trickiness’ that makes it so enjoyable and addictive to the people who are in a position to partake.”

Size of the Franken Iceberg

This lawsuit made the news media because the stakes are so high and, of course, because a popular public figure is involved. But in terms of fraud, a case like this is only the expensive tip of a huge iceberg.

The business of selling counterfeit watches is international in scope. Fake parts are made in many locations and shipped all over the world for assembly and sale. The counterfeit business thrives because there are big profit margins at every step along the way.

10:1

Annual production of
fake Rolexes to
authentic Rolexes

Counterfeit watches run the gamut from high-end brand names with a few substitute parts that even the experts could miss, all the way down to cheap knockoffs that might be stamped with the word “Rolex” to fool the masses. They might sell for tens of thousands of dollars or for under $100. Counterfeit watches might be sold in jewelry shops, in tourist resorts, at bargain-basement flea markets, on internet auction sites, by renowned watch brokers, or from a guy on a street corner.

NOTE: The vintage Rolex pictured at the top of this page is NOT known to be a “frankenwatch.” Even if it were, you certainly couldn’t tell from a picture. The best counterfeit watches look very good; their substituted parts can be detected only by an authority on the brand who takes the watch apart and examines it in detail.

The point for insurers

A Rolex that has after-market modifications may still be a fine piece of jewelry, beautiful and well-functioning, but it is not regarded by Rolex as authentic. A modified Rolex (or other luxury brand) does not have the value of an authentic Rolex, and it should not be insured as, or replaced by, an authentic Rolex.

For more details, check out some of our earlier issues. The Mushroom War highlights the huge national and international business in counterfeit watches. Signs of a Fake points out some of the irregularities that watch experts look for.

 

FOR UNDERWRITERS

Many customers may not be aware that luxury watches bought from sources other than an authorized dealer may be counterfeit, despite any logos or trademarks. Insisting on complete information about the watch not only protects the insurer but is a service to the policyholder.

Any watch from an unauthorized source should be thoroughly inspected to be sure that all its parts are genuine, including the movement. This requires opening the watch case and examining the entire watch in detail. The inspection should be done by an authorized dealer in that brand. You don't want to have to replace a cheap knockoff with a genuine item down the line.

Things to keep in mind:

 

FOR ADJUSTERS

Though claims on luxury watches are relatively infrequent, they can be expensive. To guard against fraud:

If you suspect a watch is counterfeit, consider consulting a jewelry insurance expert to help resolve the issue.

For an authentic luxury watch, seek a replacement only from an authorized dealer for that brand. Do not be tempted to shop in the huge market that exists for watches with unauthorized, after-market add-ons (unless you are satisfied that the insured watch contained after-market add-ons).

 

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