How Big are Diamonds, Anyway?
The insured loses a "5-point diamond!" How concerned should you be? Here's a little perspective on size — and price.
If there's one thing people think they know about diamonds, it's that bigger is better. It follows that bigger would be more expensive, but the relationship between size and price is not as direct as one might think.
What exactly is a carat?
The word carat comes from the carob seed, which was used as a measure in ancient India (where diamonds were discovered) because it was small and consistent in weight. A carat weighs 1/142nd of an ounce. That is, 142 carats = 1 ounce. You could mail a gross of one-carat diamonds (a gross = 144) for about the price of a postage stamp—though we don't recommend that you do this! But from this perspective, a carat isn't much at all.
Diamond weights below a carat are given in points, a carat having 100 points. A "50-point diamond," though it may sound quite impressive, is one what weighs half a carat.
How big is a diamond?
Diamonds come in a range of sizes, from one point right on up. Oddly enough, though, a diamond the weight of a carob seed is most popular these days. One-carat diamonds are so sought after, in fact, that one way for customers to get a bargain is to shop for a diamond that's a point or two under one carat. Since most people want a carat or more, these just-under-a-carat stones are often priced to move. And really, can you tell the difference between 1.00ct. and .98ct?
Extraordinarily large diamonds are rare, and they become increasingly rare as large diamond rough deposits are mined out. The few big diamonds we know about are famous not only for their size and beauty, but for the history that goes along with them.
The Cullinan Diamond, found in South Africa in 1905, weighed in at a pound and a half, a startling 3,106 carats. That was twice the size of the largest diamond found before. The stone was presented as a gift to King Edward VII of England.
Cutting the Cullinan was a major event. Experts took three months just to decide how to cut it, what shapes to give the finished gems in order to maximize yield from the rough. Eventually, the Cullinan yielded 9 major stones, 96 brilliant cut diamonds, and 9.50 carats of unpolished pieces. The total weight of the cut stones was 1,065 carats, representing a 65% loss in cutting. A large loss of material is inevitable in cutting rough material to produce gems of highest beauty. (Read more about how cut quality affects the value and beauty of all diamonds.)
The largest stone cut from the Cullinan, a 530.20-carat diamond known as the Star of Africa, was set into the British royal scepter. The other gems from the Cullinan eventually became part of other jewelry belonging to the royal family.
A more contemporary tale is that of the Taylor-Burton Diamond. In 1972, Richard Burton gave Elizabeth Taylor a pear-shaped diamond weighing 69.42 carats. The piece had been purchased at auction in 1969 for $1.05 million, the highest price ever paid for a diamond at that time. Ten years later, following her divorce, Taylor sold the diamond for nearly $5 million.
How big for how much?
With gems, there's size and then there's apparent size. When we look at a diamond set in a ring, we're usually seeing it from the top. Much of its size is not visible. These pictures, comparing well-cut round brilliant diamonds as seen from the top, illustrate how doubling the carat weight does not double a stone’s visible size.
But it's the visible size that customers want to be large. Diamonds may be cut to look big and meet customer demand, but this is always done at the expense of the stone's beauty.
Huge and unique diamonds are priced according to rarity, history, cachet and what someone is willing to pay. Smaller diamonds have a more regularized pricing, though it is complex and dependent on many variables.
Diamonds are not simply so-much-per-carat, the way gold is so-much-per-ounce. That is, a two-carat diamond is not simply twice the price of a one-carat diamond or four times the price of a half-carat diamond.
Large rough stone deposits of diamond are rarer, so larger diamonds cost more per carat. Also, as noted above, better cut proportions mean more weight loss in the cutting, and this is also reflected in the price.
This chart is merely for comparison, to illustrate how dramatically the size of a diamond affects its price. These are approximate supplier costs, not what a customer or insurer would pay.
cost per stone
cost per carat
|1 point (.01ct)||
|½ carat (.50ct)||
Diamond prices also vary considerably according to the other 3 Cs — color, clarity and cut. For this comparison, we've assumed all the diamonds are H color, VS2 clarity and good cut. But the slightest change in any grade, either up or down, can make a big difference. Of course, prices also vary over time.
It's reasonable to expect the jeweler to make a profit. The jeweler's markup, and therefore the buyer's price, will vary greatly from one retailer to another, especially with big box retailers and internet sites competing with independent jewelers. It's worth comparison shopping for the best price, and it's essential to deal with a trained and honest jeweler who will not misrepresent his goods.
FOR AGENTS & UNDERWRITERS
Although the subject of this newsletter is carat weight, remember that size is not the most important determinant of value for diamonds. Be sure the appraisal also includes complete information on color, clarity and especially cut. The insurance industry's standard Jewelry Appraisal JISO 78/79 (formerly ACORD 78/79), prepared by a Graduate Gemologist who is also a Certified Insurance Appraiser™, will give all necessary details.
Today, a diamond certificate/report from an independent lab (such as the Gemological Institute of America) often accompanies a purchase of diamond jewelry. Your files should include that report, not just the appraisal referencing the GIA report number.
In reviewing the appraisal, be on the lookout for "approximate" weights. This term indicates that the appraiser examined the stone in its setting and could not weigh it alone. The appraiser took measurements and put them through a mathematical formula that approximates weight. These approximate weights can be checked and verified by consulting a jewelry insurance expert.
An approximate weight leaves wiggle room for the replacing jeweler. He may go down a couple of points, suggesting that it is still close to the weight of the original. As the chart above indicates, a few points difference in weight can mean a significant difference in the price for you.
Always have damaged jewelry inspected in a gem lab to verify its qualities. The examination should be done by a Graduate Gemologist who is also a Certified Insurance Appraiser™. If stones have to be removed before doing the repair, have any loose stones over half a carat examined.
Remember that size is not the only, or even the most important, thing in valuing diamond. A replacement price should reflect ALL qualities of the original, including color, clarity and especially cut. It is essential to deal with a trained jeweler, preferably a GG who is also a CIA™, who will not misrepresent his gems or pricing.
A piece of jewelry may contain a lot of small diamonds, perhaps a couple dozen 1- or 2-point diamonds. And they may be of poor quality (often appraisals do not even mention the quality of very small diamonds). It's easy for an unscrupulous jeweler to take advantage of the word "diamond" attached to those tiny gems and overcharge you for these inexpensive commodities. Work with a jeweler you can trust or with an insurance gem lab providing specialized services to adjusters.
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