December 2003

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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Synthetic Diamonds

What makes diamonds so valuable? Why do they have such an aura? Why are they so coveted? One important factor has been their rarity—and that’s about to change.

High quality synthetic diamonds are around the corner.

First let’s clarify that synthetic diamonds are real diamonds. They are not cheap imitations, made of a completely different material, like cubic zirconium (CZ) or moissanite.

Synthetic diamonds are true diamonds, manufactured in a lab from the same material as natural diamonds dug from the earth. They have the same hardness and brilliance of the mined gems and all the same physical, chemical and optical properties — but a much lower price.

Diamond synthesis has been in the works for over 50 years. The earliest attempts produced diamond dust suitable for use on cutting and grinding tools. Later efforts created gem-quality stones, but the time and electricity required made them more expensive than mined diamonds. The newest methods can produce diamonds suitable for jewelry at a fraction of the cost of natural diamond.

Two Methods: HPHT & CVD

Two competing methods are racing to control the market. One method involves subjecting carbon to high pressure and high temperature (HPHT), basically mimicking the way nature produces diamond. The process, developed by Gemesis, requires about 100 hours for a diamond to develop, compared with nature's 3 billion years. Like natural diamonds, these diamonds may contain impurities.

The other method, called chemical vapor deposition (CVD), transforms carbon into plasma, which then precipitates onto a substrate and is left to grow. It builds up at half a millimeter a day and theoretically can be grown to several inches! The diamonds produced by this method are said to be flawless in clarity, thus competing with the highest quality natural diamonds. They are expected to go on the market early in 2004.

Mined vs. Manufactured: What’s the difference?

"If you give a woman a choice between a 2-carat stone and a 1-carat stone and everything else is the same, including the price, what’s she gonna choose?"

— Carter Clarke, founder of Gemesis

The HPHT process cannot yet produce colorless diamonds but turns out pale yellow stones. Gemesis intensifies the color, then markets the gems as "rare yellow diamonds." In nature, yellow diamonds are indeed rare and therefore extremely expensive, so the synthetic yellows come out far lower in price. (The HPHT process, with its resultant yellow diamonds, is the same one used for diamonds made from human carbon, discussed in last month’s newsletter.) Researchers expect that eventually they will be able to produce colorless diamonds as well.

Most mined diamonds contain impurities (which are reflected in the gem’s Clarity grade). Diamonds produced through the HPHT process also contain impurities, but the CVD process produces flawless diamonds. One expert identified a CVD diamond from Apollo as synthetic only because it was “too perfect to be natural.” The synthesizing process can also control the size and color of diamonds, so gems can easily be produced in matched sets or groupings.

Price is, as Carter Clarke points out, always a crucial issue. At half the price, or a quarter the price, it is bargain diamond jewelry.

What About Rarity?

Natural diamonds, it turns out, are not as rare as they seem. It is a fact of the gem industry that De Beers tightly controls most of the world’s supply of mined diamonds, allowing only a fraction of them to come to market in order to keep their value high.

If high quality synthetics should flood the market, and be accepted by jewelers and the public, natural diamonds would lose value. De Beers is fighting hard to maintain a distinction between natural and manufactured diamonds. It has developed sophisticated machinery to help distinguish natural from synthesized diamond, and is supplying it to major gem labs at no cost. But there is not likely to be a simple device, available to jewelry retailers, to identify synthetics because synthetic diamonds are, ultimately, diamond.

A Glimpse at a Bigger Picture

This is all a great upset to the gem industry, but to the diamond manufacturers, the gem industry is just a stepping-stone. They plan to use their success with gem-quality diamonds to finance a revolution of the computer chip industry.

Diamond’s extremely high thermal conductivity means that diamond could handle much higher temperatures than silicon can. Natural diamond is far too expensive and impure for this use, and there is no way to ensure that one mined diamond has the same electrical properties as the next. But synthetic diamond can be cheaply produced, turned out in consistent quality, and grown in the thin wafers required by the industry. As a market, microprocessing, not jewelry, is the prize.


Having a trustworthy appraisal is especially important for high-value diamonds because of the great difference in value between synthetic and natural diamonds. It is wise to have an appraisal from a CIA™ (Certified Insurance Appraiser™). This is an experienced jeweler who is a graduate gemologist and is also trained in appraising for insurance.

Even though the new synthetics resemble natural diamonds, a CIA has the training and experience to recognize when something is suspicious. He'll be wary of a diamond that is too perfect. He will know when too much of a rare gem, such as yellow fancy diamond, starts showing up on the market. If he suspects the gem is synthetic, he can connect with a larger lab that has equipment to distinguish synthetic from natural diamond.

A synthetic diamond should always be so described on the appraisal — not just on the sales receipt, and not just on a diamond certificate.


Most important, know that synthetic diamond is worth just a fraction of natural diamond. Carefully read all documents on file. Insurers have overpaid claims by thousands of dollars because they missed — or thought unimportant — a piece of crucial information on the appraisal.

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


Synthetic Diamonds and Insuring Tips

Our next issue will discuss the impact of synthetic diamonds (and their marketing) on insurers and will offer advice on how to avoid costly errors.

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