February 2005

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

Internet tips for jewelry insurers - May

De Beers will sell lab-grown diamonds - June

Do genuine gemstones break? - July

Luxury Watches - August

Who owns the ring? - September


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 Colored Diamonds

Fancies, those vividly colored diamonds so rare in nature that their prices are in the stratosphere, can now be made in a lab. Does it really matter - to the insurer or to the consumer - whether a fancy is mined or synthesized?

How are fancies made?

HPHT (high pressure and high temperature), discussed in last month's issue as a treatment done to improve or remove color in diamonds, is also used to produce diamond itself. In this case, a "seed" of natural diamond is used as a base for growing diamond around it. Once grown, the diamond may be subjected to other procedures to change or deepen its color, yielding a rainbow of beautiful colors rarely found in mined diamond.

Other synthesizing methods are also used, and more are in the experimental stage.

Synthetic fancy colored diamonds are NOT imitations or simulants. They are genuine diamonds, with the same physical, chemical and optical properties as mined stones.

Yet skilled gemologists can recognize in these diamonds traces of their origin. For example, certain types of inclusions or characteristic color patterning (visible when the stone is studied with proper gemological equipment) indicate the process used to produce the stone.

Is disclosure necessary?

This is controversial in the jewelry industry. The issue there, as in the insurance industry, is economic.

In nature, fancy colored diamonds are extremely rare and their market price reflects this. In the lab, they can be produced in large quantities and with great predictability. Costs are lower for manufacture than for mining, and we can expect costs to go down as sales increase and technology improves.

Suppliers of natural diamonds feel that sales of natural fancies will suffer, and the public will be confused, if the market is flooded with synthetic stones that are not so identified.

Some diamond manufacturers, on the other hand, say that, since their products are real diamond in every sense, the distinction between mined and lab-grown is unimportant. They point out that subjecting carbon to high pressure and high temperature mimics how diamond is produced in the earth. The process is merely sped up — what took nature millions of years, takes only a day or two in the lab.

HPHT is used to grow synthetic diamond on a "seed" of natural diamond. This is similar to the way cultured pearls are produced, and it further blurs the distinction between natural and synthetic.

Yet many in the diamond trade hold that keeping the distinction is necessary.

Because that distinction involves a great difference in valuation, to the insurer (and consumer) disclosure is vital. Synthesized diamonds are worth less than natural diamonds of similar appearance, and the high price of natural fancy diamonds makes this price difference immense.

Gemesis, the first company to market gem-quality synthetic stones, has its name inscribed on all its diamonds over 0.25 carats. This is a good-faith gesture by the manufacturer, but others down the buying chain (distributor, retailer, appraiser, buyer) may remove the inscription and pass off a synthetic gem as natural. Note that it's the insurer who suffers if there is a break in the chain of disclosure.

What other word says "synthetic"?

Gem manufacturers like to avoid using the word synthetic. Though it simply means "put together," consumers often think synthetic signifies that the diamond is not real. Diamond producers are introducing alternate terms they hope consumers will find appealing.

Cultured diamonds, comparable to cultured pearls, has been gaining usage. This designation suffered a setback earlier this month, when a court in Germany ruled its usage illegal, presumably because its meaning was not clearly descriptive. Manufacturers argue that production methods conform to the definition of cultured: "grown in a prepared medium" or "produced under artificial and controlled conditions."

The German court ordered distributors to use either synthetic or artificial. The court's ruling is expected to have repercussions throughout the European Union countries, but no U.S. court has yet ruled on terminology for synthetic gems.

Apollo, an important producer of synthetic diamonds, argues that the terms artificial and synthetic mislead the public into assuming such gems are something other than real diamond. One representative said the German court's decision ignores the advancements in science.

Many of the issues surrounding synthetic diamond are similar to those faced decades ago by synthetic emerald. In 1938 Carroll Chatham developed a process for growing emeralds. Industry politics resulted in the FTC preventing Chatham from calling his gems Chatham Emeralds or Cultured Emeralds, so he wound up calling them Chatham Created Emeralds. Today Chatham's grown emeralds are synonymous with the finest of synthetic emeralds (and the company is also growing diamonds!).

Meanwhile, gem manufacturers are hoping their terms will catch on. Some describe their gems as lab-grown. Gemesis calls its diamonds Gemesis-created.

Bottom Line

For insurers, the important point is that the jewelry industry sees a difference between gems from a mine and gems from a lab, and it values them differently. Synthetic diamond is worth far less, and as technology improves, we can expect its market price to drop even further. The difference in valuation between synthetic and natural diamond, already immense, is bound to increase.


In insuring colored diamond jewelry, never assume the gem is natural (and therefore more valuable). Insist on an appraisal that explicitly states whether the stone is natural or synthetic. (ACORD 78/79 appraisals warrant that the gems described are natural unless otherwise stated.)

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.

Any colored diamond approaching .5 carat should come with a certificate from an independent laboratory, such as the Gemological Institute of America (GIA) or the American Gem Society (AGS).

Having a trustworthy appraisal is especially important for fancy colored diamonds because of the great value difference between synthetic and natural ones. Here, as for all high-value jewelry, it is best to have two appraisals. At least one of them should be written by a Certified Insurance Appraiser™, an experienced jeweler who is a Graduate Gemologist and is also trained in appraising for insurance.

Even though synthetic fancies resemble natural diamonds, a CIA™ has the training and experience to recognize when something is suspicious. He will be wary of a diamond that is too perfect and will know when too much of a rare gem starts showing up on the market. If he suspects the gem is synthetic, he can connect with a recognized independent lab (such as GIA Gem Trade Lab or AGS Lab) that has equipment to definitively identify synthetic diamond.


Look over the appraisal for terms that signify synthetic, such as: cultured, artificial, created, grown, lab-grown.

ACORD 78/79 appraisal forms warrant that the appraised gems are natural unless otherwise stated. If you are working with a non-ACORD appraisal, don't assume a colored diamond is natural simply because the appraisal doesn't mention synthetic (or one of the equivalent terms). The appraisal should state that the gem is either natural or synthetic.

If the appraisal is not on ACORD 78/79, use ACORD 18 to verify that all necessary descriptive information is given.

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.

A few synthetic-diamond manufacturers are mentioned above, but there are others and the list is growing. If the appraisal or sales documents list any brand names, it is worth checking with your jewelry insurance expert as to what the names might signify (e.g., Lindy sapphire, Chatham emerald, Bellaire diamond).

Be suspicious if all you have to work with is an appraisal written by the seller. Any colored diamond approaching .5 carat should come with a certificate from an independent laboratory, such as GIA Gem Trade Lab or AGS Labs.


JCRS recently did a survey showing 6 diamond rings. We asked: Which gems are natural? Which are irradiated? Which are HPHT treated? Which are synthetic? Here's how the respondents answered.

And, here is who took the survey.

Congratulations to Graduate Gemologists!!

As a group, these trained professionals gave the correct answer:
Don't Know.

It is impossible to know from a picture whether a gem is natural, synthetic or treated. It is impossible to know without performing appropriate tests using gemological equipment.

The gems shown in the quiz are properly identified below.

Note to insurers: You may want to take the test yourself before looking at the answers. After all, in judging a picture, your guess is as good as anyone else's.

But when insuring scheduled jewelry, you want an appraisal from a professional whose opinion is worth more than "anybody's guess." A Certified Insurance Appraiser™ is a Graduate Gemologist, trained in jewelry appraising for insurance, who warrants that all jewelry is inspected in a gem lab, using appropriate gemological equipment.

Gems Identified



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