June 2006

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

2017

Moral Hazard, Documents and the Bottom Line - January

Ruby and Jade - February

How to mail a diamond - March

Jewelry Insurance Appraisal Standards: JISO - April

2016

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

2015

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

2014

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

2013

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

2012

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

2011

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

2010

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

2009

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

2008

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

2007

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

2006

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

2005

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
October

Grading the Color of Colored Diamonds
November

New GIA Cut Grade for Diamonds - December

2004

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

2003

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

2002

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

2001

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

2000

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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Mixing It Up:
Natural and Synthetic Diamonds
Together

Natural and synthetic diamonds can be good jewelry mates,
but you need to know who's who.

Natural and synthetic gems have a long history together. Since gems first began being made in a lab, they have been used in fine jewelry right along with mined gems. Many valuable period pieces are set with both natural and synthesized colored stones.

Synthesizing diamond, however, is a relatively new phenomenon. Synthetic diamonds for industrial use date from World War II, and it's only during the last decade or so that gem-quality synthetic diamonds have been available.

Why not use all natural diamonds?

Availability. While the supply of mined diamond rough is finite, the techniques for synthesizing diamond are getting better and cheaper. For one manufacturer, the technology is being driven by the hope of replacing silicon with diamond as a medium for computer chips. The potential financial rewards of revolutionizing the microprocessing industry insure a ready supply of gem-quality synthetic diamonds for the jewelry industry.

Matchability. For jewelry designs requiring many stones of similar size, finding natural diamonds of similar size can be difficult. On the other hand, acquiring size-matched stones of under a carat from diamond manufacturers is easy. For color matching, labs can readily produce colored diamonds or subject yellowish or brownish natural diamonds to treatments that add or improve color.

Color. Natural diamonds of attractive colors, called fancies, are rare and extremely expensive. To create the impact of color at a minimal price, jewelry designers can use either synthesized colored diamond (created from scratch in a lab) or natural diamond that has been lab-treated to enhance its color. Often the synthesized diamond, or the color-enhanced diamond, is the centerpiece of the jewelry, with tiny natural diamonds added as accents.

Price. Synthesizing gems is a fast-growing business, and high-quality colored diamonds from the lab are much cheaper than from the earth. Jewelry that would be prohibitively expensive if made with all natural diamonds becomes affordable when some of the stones, particularly colored diamonds, are synthetic.

Disclosure!

Within the jewelry industry, the issue of disclosure is still open to discussion. Some suppliers point out that synthesized diamond is real diamond—not an imitation. It has the physical and chemical properties of natural diamond, so why make a distinction? One jewelry designer insists that "the sophisticated consumer" will not care whether the stones came out of the ground or out of a lab.

However, the jewelry industry sets a far higher value on natural diamond than on synthetic. So for insurers the question is settled: disclosure of synthetic gems is essential.

Manufacturers usually make an effort to identify their stones as synthetic. They create a brand name, such as Gemesis, which they hope will in itself become a lure for consumers. Some may inscribe their name on the girdle of the diamond and provide a lab certificate stating that the stone is synthetic.

This is a good beginning, but as the diamond passes from hand to hand in the sales chain, inattention and fraud can enter in. A laser inscription can be easily polished off, as documented by the Gemological Institute of America (GIA) Gem Trade Lab. Documents identifying a synthetic stone may stray. Synthetic diamonds could be mixed in with batches of natural diamonds (similar to the recent scam involving rubies) and passed on as natural. Unfortunately, many jewelers are not professionally trained gemologists and could themselves be fooled by synthetics.

For the consumer, and the insurer, the best defense is a detailed appraisal from a Graduate Gemologist who is also a Certified Insurance Appraiser (CIA)™.

FOR AGENTS & UNDERWRITERS

In insuring jewelry that includes multiple diamonds, or colored diamonds, never assume they are all natural. Insist on an appraisal that explicitly states whether the gems are natural or synthetic, since the difference in valuation is great.

Alas, not all jewelers can distinguish synthetic from natural diamond. Be sure the appraisal comes from a Graduate Gemologist (GG), preferably one is also a Certified Insurance Appraiser (CIA)™.

Since natural colored diamonds are extremely expensive, a selling price that seems "too good to be true" is a major red flag. Do insurance to value (ITV) calculations to check for a large discrepancy between purchase price and replacement cost. Software is available that makes ITV calculations easy and guards against fraud.

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

For all high-value jewelry, it is best to have two appraisals. At least one of them should be written on JISO 78/79 (formerly ACORD 78/79) Jewelry Appraisal, the insurance industry's standard, by a GG who is also a CIA™.

FOR CLAIMS

The word synthetic may have unpleasant associations for buyers, so gem manufacturers may use other terms to describe their lab-made gems. Look over the appraisal and diamond report for such terms as cultured, artificial, created, grown, and lab-grown.

Often synthetic diamonds are identified by the manufacturer's name, such as Gemesis, so carefully inspect the appraisal and sales documents for any brand names. Not all brand names signify a synthetic stone, so it's worth checking with your jewelry insurance expert as to what a particular brand name represents.

For jewelry with fancy colored diamonds, a price that's "too good to be true" is a major red flag. Do insurance to value (ITV) calculations to check for a large discrepancy between purchase price and replacement cost. Software is available that makes ITV calculations easy and guards against fraud.

Be suspicious if all you have to work with is an appraisal supplied by the seller. Gem qualities as well as the jewelry's valuation may be inflated.

Be suspicious if a certificate/report from a lab includes a valuation. Reputable grading labs report only on the qualities of the gem; they do not include valuation.

Any colored diamond approaching .5 carat should come with a certificate from a reputable independent laboratory, such as the GIA Gem Trade Lab or AGS Labs.

For damaged jewelry, have the jewelry inspected in a gem lab by a Graduate Gemologist who is a Certified Insurance Appraiser™. You want to be sure the replacement does not exceed the quality of the original. Especially, you don't want to replace a synthetic diamond with a natural.

©2000-2017, JCRS Inland Marine Solutions, Inc. All Rights Reserved. www.jcrs.com

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