August 2015

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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Padparadscha—a special term for a special stone

Photos courtesy of Lotus Gemology

Whenever you encounter an unusual name or term on an appraisal, it's worth taking a second looks at the docs. And maybe doing a little research.

One insurer's experience:

The jewelry application arrived with an appraisal, a sales receipt, a GIA report, and a couple photos of the jewelry. So far, so good. The GIA report called the stone an orange sapphire, while the appraisal described the ring's stone as a padparadscha sapphire.

Was that important? The insurer consulted a Graduate Gemologist who'd been a retail jeweler for some 30 years, well experienced in dealing with colored gems. The gemologist could see that the valuation was too low for a true padparadscha—and too high for an orange sapphire. The jewelry owner had apparently been taken in by a good story from the seller.

Padparadscha's story

Photo courtesy of Gary A. Roskin, GG, FGA
Natural padparadscha from Sara Gems

Padparadscha is a variety of sapphire highly valued for its striking display of color. The word itself means lotus color, and the gem has been poetically described as the marriage between a lotus flower and a sunset. The best padparadschas include blendings of yellow, pink, orange, and red.

All colored gems derive the greater part of their value from their color, and this is particularly true for the unique display in padparadschas.

Padparadschas were originally found in Sri Lanka, and for some time only sapphires from this area could be considered true padparadschas. Later, deposits were also found in Madagascar and parts of East Africa, but the gem is still quite rare, and rarity adds to its value.

Photo courtesy of Lotus Gemology
Natural Padparadscha

In the gem trade there's always a danger of misrepresentation, especially with rare, high-value stones like padparadscha. In our earlier article, The Chanthaburi Connection, we reported on a scam in which low-quality corundum was heated to improve its color, and foreign materials were added to introduce different colors into the stone, producing padparadscha-looking stones. Suddenly a flood of supposedly rare gems entered the market. The cheap material, disguised by color treatments, was accepted as valuable padparadscha for some time before the fraud was discovered.

Lab-grown padparadscha on Etsy

There is also the risk of a lab-grown stone being passed off as natural (mined). Lab-grown padparadschas are readily available on the Internet for under $100. The gem on the locket pictured here was described as lab-grown, but such disclosure is not always made.


In the case described above:

The insurer was suitably cautious, examining the documents and consulting an expert.

The Gemological Institute of America, like other labs, produces several kinds of lab reports, which include different data for different purposes. GIA states on its website that it will indicate on a sapphire identification report when a gem can be described as a padparadscha.

However, in this case what the insurer had was a GIA origin report. This origin report verified that the stone came from East Africa, an area known as a source for padparadscha (as well as for other, more common, sapphires!), but an origin report does not deal with whether or not the stone is a padparadscha. One can assume that whoever ordered the GIA report (probably the seller) chose carefully.

The only basis for regarding this as a padparadscha is that word of the appraisal. But this appraisal came from a lab unfamiliar to insurers and gemologists. There was no address or contact information for the lab on the appraisal or on the internet, and the client was not named on the appraisal. Most likely, this is a lab whose purpose is to supply feel-good appraisals for jewelry sellers to use as sales tools.

The GIA report stated that the gem had been heated, an accepted industry practice with sapphires, but it did not mention any other adulterations. Apparently this was not a faux padparadscha but simply an orange sapphire (as stated on the GIA report) being called padparadscha on the unreliable appraisal.

A Graduate Gemologist and Certified Insurance Appraiser, experienced in buying and selling colored gems for more than 30 years, advised insurer that the appraisal valuation was vastly inflated.

Insuring this ring based on its appraisal valuation would present great moral hazard. At some point in the future the insured might take the ring to a jeweler for repair or cleaning and be told that the gem is, in fact, worth far less than she paid. And then she may decide to "lose" it for the insurance.

The insurer declined the risk.



Beware of appraisals and certificates supplied by the seller. These are basically sales tools that often have exaggerated quality descriptions and inflated valuations.

High-value, purportedly rare, gems should always have their quality verified by a gemologist who is experienced in the buying and selling of that gem, is familiar with its pricing, and is aware of treatments and scams associated with that gem.

Recommend that your clients get an appraisal from a trained gemologist (GG, FGA+, or equivalent), preferably one 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.

Request a colored gem report from an internationally respected lab such are AGL (American Gemological Laboratories) or Gubelin Gem Lab. You can verify the contents of a report by contacting the labs.


If you encounter any terms on an appraisal or lab report that you don't understand, or brand names you're not familiar with, it might be worthwhile to consult a jewelry insurance professional working on your behalf. Some terms indicate quality, others can be names of lab-made gems (worth less than mined gems of the same quality), and still others can provide clues to inflated valuations.



While there are fewer claims on colored stones than on diamonds, colored stones usually have much higher markups and generally have inflated valuations.

Padparadschas are very rare in nature and are priced accordingly. In settling a claim on such a high-value sapphire, be sure the appraisal states that the gem is natural and untreated. Do not assume that if the appraisal doesn't mention treatments, the gem must be untreated; most likely, if treatment (or lack of it) is not mentioned, other information is incomplete as well.

For claims on damaged stones, always have high-priced jewelry inspected by an appraiser to determine whether the gems have been treated. Some treatments may break down, causing changes in the stone that are not damage for which the insurer is liable.




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