December 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


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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Is the gem suitable for the jewelry?
Is this a good insurance risk?

All kinds of gems are used in jewelry. But not all gems are suitable for all kinds of jewelry. From an insurer's point of view, some can be accidents waiting to happen.

Here are some examples of what a good appraisal for insurance should tell you—but usually does not.

Poor toughness (durability) rating

Toughness describes a gem's vulnerability to cracking or chipping under impact. Even diamond, which has a fair-good toughness rating, can chip—as insurers are well aware. But stones with poor  toughness ratings, such as topaz or tanzanite, can chip fairly easily. These are not good candidates for a ring or bracelet, where they're likely to be knocked against objects that could damage them. In earrings, however, they would be quite safe.

Ideally, the appraisal for a ring with a gem of low toughness should mention the need for special care to avoid damage. This notice would remind (or inform!) the owner that the stone chips easily, and it would also caution the insurer about the higher-than-average risk.


Low hardness rating

Hardness refers to a gem's resistance to scratches. Diamond (rated 10 on the Mohs scale) is the hardest of gems. Although diamond can chip, as indicated by its middling rating for toughness, diamond's hardness makes it difficult to scratch except by another diamond.

Gems of low hardness, such as pearl, opal, jade and coral, are by nature very sensitive to surface damage and require special care to keep them safe.

Soft gems can be harmed by exposure to common household chemicals like bleach or vinegar, by perfumes and body lotions, and even by acid from the skin. Since such gems can easily be damaged, it's recommended to store the jewelry in a cloth bag to keep the gem from being scratched by other jewelry.

Because vulnerability to surface damage is the nature of soft gems, such damage would be considered normal wear and tear, for which the insurer is not liable.


Mounting issues

Sometimes the shape of a gem makes it vulnerable to damage. This is where the mounting can come to the rescue. Marquise, princess and pear diamonds have sharp corners that could easily be chipped. A conscientious jeweler will put a gem in a setting that protects corners, a thin girdle, etc.





If the mounting of a stone is not sufficient to keep the gem in place and safe, if the mounting has loose prongs or if the gem's corners are not protected, that should be mentioned on the appraisal. A poor setting greatly increases the risk of damage or loss of the stone.


Fracture-filled emerald

Fracture-filling treatment

Highly fractured gems are not solid and so are vulnerable to breakage. The fractures are often filled with some non-gem material to make them less visible, but they are still fractures and the stone is still weak. The fracture-filling treatment is especially common with emeralds, because emeralds are by nature highly fractured.

Fracture-filled stones can be damaged by heat (such as hot water used in washing dishes), air pressure changes (as in an airplane cabin), or chemicals. If the fill material breaks down, the fractures will again become apparent.

Fracture-filling should always be noted on the appraisal because it has a serious effect on durability and valuation! Sometimes appraisals or sales documents use the term "clarity enhanced", suggesting that something's been done to make the stone better. In truth, the treatment has only made the stone look better, better than it really is.

Insurers should be aware that fracture-filling, or clarity enhancement, signals a weak stone that is vulnerable to breakage. It is inherent vice.

The risk of damage is so great that some insurers have chosen not to insure any fracture-filled stones.

Photo by Fred Kahn and Sun Joo Chung of AGL


Composite Stones

Composite rubies have been big news for the past few years, ever since Macy's was sued for selling them. Described by some as fracture-filled rubies on steroids, these stones often have more lead-glass filling than ruby material and would fall to pieces if they were heated and the glass oozed out.

The red stone at right is a composite ruby. The picture below it shows a large piece of the yellow lead-glass used in the treatment oozing out of a piece of ruby rough.

Composite rubies ought not to be in jewelry at all, since the likelihood of damage is so high. Insurers should not insure them.


The discussion above covers only some of the situations that affect insurance risk. A conscientious jeweler or appraiser will tell the jewelry owner of any conditions that require special care or precautions to keep the jewelry safe.

Ideally, such information should also be on the appraisal, stated prominently and not buried in fine print of appraisal boilerplate.  The special care need not be described, but a note about the requirement for care would be a signal to the insurer.

Meanwhile, some things to look for on the appraisal:

Marquise diamond with points protected.

Recommend that your clients get a detailed appraisal on JISO 78/79 form, written by a trained gemologist (GG, FGA+, or equivalent) who has additional insurance appraisal training. One course offering such additional training is the Certified Insurance Appraiser™ (CIA) course of the Jewelry Insurance Appraisal Institute.


Study the appraisal and other documents for such words as treated, enhanced, clarity enhanced, lead-glass enhanced, fracture filled or composite. This is crucial information when you are pricing a replacement.

Clarity-enhanced, or fracture-filled, stones are worth far less than untreated gems of similar appearance. Use every means possible to determine whether or not the gem has been fracture-filled.

For damage claims, ask the policyholder whether the jewelry has recently been cleaned or the gem reset, or whether it had been exposed to such common household solvents as bleach, ammonia or lemon juice. Fracture-fill materials often discolor or break down under the stress of heat or chemicals, causing the stone to appear damaged. In such cases, it's really the filling that's been damaged and the insurer is not liable.

Normal wear and tear may significantly alter the appearance of gems with low hardness ratings.
If you are unsure about whether damage was due to inherent vice, you may want to consult a jewelry insurance expert.

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