October 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

Describing a gem's color - May

Why not just put jewelry on the Homeowner policy? - June

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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Emeralds

What's an emerald worth? How green is it? Why does an "enhancement" make it worth less? What's very wrong with emerald "Certificates"?

Jewelry, for all its beauty and romance, isn't necessarily a predictable investment. It's a commodity in the marketplace, and gem prices can go down as well as up. The fluctuations are generally invisible to consumer and insurer, but they determine the price of the purchase — and the value of the jewelry at any time in the future.

Emeralds are a case in point. Over the past decade, the wholesale price dipped precipitously for several years, and now is rising again.

Supplier's Per-Carat Cost
for 2-carat "Fine" Emeralds

1995
$5,200
1996
$4,800
1997
$3,800
1998
$3,100
1999
$2,400
2000
$2,000
2001
$2,000
2002
$2,000
2003
$2,200
2004
$2,700
2005
$3,300

 

How could the emerald you insured in 1995 lose over 60% of its value in just five years? Put another way, why were emeralds fresh out of the mines suddenly worth so much less?

According to one expert, several independent events contributed to a "decline in confidence" in the emerald market. For example, a sharp drop in the production of Colombia's emerald mines raised concerns about a reliable supply of fine-quality emerald. At the same time, Japan, a major buyer of fine gem material, was experiencing an economic slowdown. Meanwhile, the practice of clarity enhancement of emeralds with oils and polymers became more prevalent, and the major certifying labs had trouble finding a common standard for identifying and classifying the enhancing agents commonly used in various countries.

Now things are becoming more stabilized and new emerald mines are developing in Colombia. But such marketplace gyrations illustrate the importance of basing insurance premiums or settlements on a current valuation, reflecting current market prices.

Synthetic Emerald

Emerald is one of the most commonly synthesized gems. Malossi is the newest name on the block — the brand name synthetic emerald you may start seeing this year. But there are many producers. Synthetic gems typically sell for 5-10% the price of natural gems, so disclosure is essential.

Gem manufacturers may avoid using the word synthetic. Chatham, creator of some of the finest quality synthetic emeralds around, calls its gems Chatham Created Emeralds. Synthetic gems are sometimes described as grown or cultured. A brand name may also identify a gem as synthetic.

A knowledgeable appraiser will recognize synthetic gems and report this information on the appraisal.

Clarity Enhancements  

Fracture-filling is an easy and inexpensive treatment widely used on emeralds.  To make an inferior gem look clearer and more valuable, technicians fill in any fractures in the stone with some other material. Literally thousands of products are used for the filling, ranging from 3-in-1 oil to proprietary formulas.           

Emerald before and after fracture-filling

If non-gem material is found in the stone, technicians may use a laser to drill a channel to the inclusion and remove it. Then they fill in both the fracture and the channel. Some fillers may not be stable or durable.

These treatments change only the gem's appearance (to the unaided eye), not its value. Flaws that have been fracture-filled can readily be seen under a microscope, so gemologists recognize the stone as being inferior in quality. Whether the flaw is visible or not, an emerald with a fracture has an inherent weakness making it more susceptible to damage.

Fracture filling is so commonplace in the emerald market that stones NOT so treated are worth considerably more than treated stones. So the appraisal should either note the treatments performed on the emerald or explicitly state that the stone is untreated.

Read more about fracture filling and about an insurance claim involving a fracture-filled emerald.

Oiling is an enhancement routinely done to improve the appearance of emeralds. A colorless oil penetrates into voids and fissures that reach the surface. It does not harm the gem, though temperature changes and chemicals used in cleaning may affect the stability of the treatment. All enhancements should be disclosed, both verbally and on the sales receipt and appraisal.

The Emerald Certificate

Certificates for diamonds have become commonplace, and that may be happening with colored gems, too. However, emerald certificates currently available are not of much use to insurers. The main reason is that emerald reports basically ignore the single most important criterion in valuing colored gems — their color!

To accurately document the subtlety of an emerald's color, the appraiser must rely upon precise gemological language, using terms specified by the Gemological Institute of America (GIA) and widely accepted throughout the world. Color is described according to three criteria:

An emerald's color, for example, might be described as Medium Light (tone), Very Slightly Grayish (saturation), and very slightly bluish Green (hue). A description that gives an emerald's color as merely "green" is worthless.

Sad to report, NONE of the labs currently issuing emerald reports includes precise color descriptions based on the widely recognized tone-saturation-hue system — although fully 50% of an emerald's value is determined by its color! Not even GIA itself, which developed the system and teaches it, uses it on color stone reports.

For such information, insurer and jewelry owner must rely on an appraisal by a gemologist trained and experienced with colored gemstones.

Similarly, none of the lab reports — including GIA's — describes an emerald's clarity according to  the widely recognized GIA system. A lab either follows its own grading classification (with no key as to how to interpret the grade), or omits clarity altogether. Again, one must rely on a detailed appraisal for clarity information based on the GIA scale.

Emeralds (like some other colored gems, but unlike diamonds) may derive some of their value from where they were mined. Therefore, country of origin is also important. Most lab reports omit this information as well.

Read more about colored stone certificates.

Because emerald certificates, or reports, are so lacking in critical information, the need for a reliable appraisal by a credentialed appraiser is particularly important.

Appraisal & Appraiser

Too often, appraisals for colored gemstones contain only brief and vague descriptions of color, as though it didn't much matter.  However, the gemological terms for gem color are standardized and specific. Appraisals should always describe color in terms of tone, saturation and hue.

Appraisals on colored gems typically fall short in all crucial information. A study of insurance appraisals exposed the low percentage of appraisals that include necessary details.

Insurance Appraisals for Colored Gem Jewelry


The appraisal should also give the gem's clarity, treatments, and origin, and should state whether the gem is synthetic.

A JISO 78/79 appraisal (formerly ACORD 78/79), the insurance industry's standard for detail and accuracy, carries this essential information.

Not every jeweler, nor even every trained gemologist, is competent to appraise emeralds. A reliable appraiser of emerald jewelry is a jeweler experienced in buying and selling colored gems, familiar not only with market values but also with scams, synthetics, treatments, brand names and other information specific to colored gems. He or she should be a Graduate Gemologist, preferably a Certified Insurance Appraiser™.

FOR AGENTS & UNDERWRITERS

Never insure emerald jewelry based only on a "certificate," which leaves out basic information.

Be sure the appraisal includes information on the emerald's

A JISO 78/79 appraisal, by a Graduate Gemologist and Certified Insurance Appraiser™, gives complete and reliable information.

Be sure the appraisal is recent, because the value of gems can fluctuate dramatically.

FOR CLAIMS

Terms such as lab-grown, created, and cultured mean that the gem is synthetic. Synthetic emeralds have a far lower value than natural ones.

A brand name on an appraisal or other documents may indicate a gem is synthetic, or it might yield other information about valuation. Consider consulting a jewelry insurance expert for help interpreting brand names.

Breakdown of a fracture-filling treatment is not considered damage for which the insurer is liable. Fracture-filling of emeralds is so commonplace that all damaged jewelry should be examined in an independent gem lab by a Certified Insurance Appraiser™.

It is wise to suspect fracture-filling if:

 

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