August 2007

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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Diamonds Wear Coats of Many Colors

To meet the growing demand for low-priced colored diamonds, technology has come up with a new version of an old trick:
coating the diamond to change its color.

Intensely colored diamonds, called fancies, are extremely rare in nature and very expensive. The gem industry has overcome these limitations in recent years by developing ways to produce colored diamonds at a comparatively low cost.

In earlier issues we’ve discussed some of these technologies. Colored diamonds can be synthesized in a lab. Or, poorly colored natural diamonds, yellowish or brownish stones, can be turned to vivid colors through irradiation and  HPHT (high pressure high temperature). Or, the diamond can be coated.

Coating diamonds to change their color is hardly a new practice. For centuries merchants would paint a gem with a thin layer of some foreign substance to create a more desirable appearance. However, earlier coating methods were comparatively crude, easily detected and not permanent.

The new methods are much more sophisticated. Annealing the coating through high temperature and pressure can give diamonds strongly saturated, natural-looking colors, such as blue, green, yellow, orange, pink and purple-pink. Nanotechnology is used to make a coating film that is highly resistant to abrasion and fairly durable in color.

Detection & Disclosure

Detecting the coatings is a challenge even for trained gemologists specifically charged with that task. The technologies vary and the coatings are proprietary.

A coating is especially hard to detect if it is applied below the stone’s girdle, to the area of the gem that’s usually concealed in a setting. When viewed from above, the diamond takes color from the coating. The coating might not be evident even to a trained gemologist unless he removes the stone from the setting.

Some suppliers openly disclose the treatment, others do not. One supplier of coated diamonds describes its stones as “infused” or “HPHT-treated,” but this terminology is inaccurate and misleading.

Even if the supplier discloses the treatment, carelessness or fraud can occur anywhere down the chain of sale before the stone reaches the customer.

Durability

The long-term durability of such coatings is questionable. Since various methods are used, diamonds from different suppliers may have different qualities.

The Gemological Institute of America (GIA) Laboratory studied a large number of coated stones from Serenity Technologies. GIA found that exposing the gems to some common household cleaners, such as bleach, caused the color to lighten, and that rubbing them with an abrasive powdered kitchen cleanser damaged the coating. Though damage does not happen easily, it could occur over time through normal wear.

FOR AGENTS & UNDERWRITERS

Coating is a color treatment, and treated diamonds are worth vastly less than untreated natural diamonds of similar appearance.

In insuring colored diamonds, never assume they are natural and untreated. Insist on an appraisal that explicitly states whether the gems are natural or synthetic, and whether natural gems are treated or untreated.

Be aware that the new coatings are difficult to detect, even by experienced gemologists. Jewelers without gemological training might not even look for a coating. Be sure the appraisal is written by a Graduate Gemologist (GG) who is also a Certified Insurance Appraiser™ (CIA).

Vivid-colored “fancy” diamonds are extremely rare in nature and very expensive. A selling price that seems “too good to be true” is a strong indication that a colored diamond is either treated or synthetic.

Do insurance to value (ITV) calculations to check for a large discrepancy between purchase price and replacement cost. Software is available that makes ITV 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, the insurance industry’s standard, by a Graduate Gemologist (GG) who is also a Certified Insurance Appraiser™ (CIA). JISO 805 or JISO 806 may be used by a jeweler/appraiser who is not a GG and CIA.

FOR ADJUSTERS

Check the appraisal closely for terms indicating gem treatments, such as coated, infused,  treated, enhanced, HPHT, and irradiated.

Natural, untreated fancies are extremely rare. The difference in value between natural fancies and color-treated stones is enormous.

An appraisal for colored diamond should explicitly state that the stone is either natural or synthetic. If natural, the appraisal should either state that the diamond is untreated or should list the treatments. Be especially cautious if the appraisal is not explicit on these points.

Be suspicious if you are working from a Diamond Certificate/Report that carries a valuation. Reputable grading labs (such as GIA and AGS) report only on the qualities of the gem; they do not include valuation. Also, they do not issue reports on coated stones.

For damaged jewelry, have the jewelry inspected in a gem lab by a Graduate Gemologist who is also a Certified Insurance Appraiser™. You want to be sure that the “damage” is not the result of a color treatment breaking down.

Damaged jewelry should always be inspected in a gem lab to verify that the gem was of the quality stated on the appraisal. Obviously, the higher the valuation, the more important is this precautionary step.

 

 

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