November 2008

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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How Fancy Is Brown?

Fancy Brown Diamond
Click to enlarge

Champagne, cinnamon, chocolate, honey, cognac, caramel, nutmeg, butterscotch, espresso, clove, café au lait . . . . These tasty terms are used to describe diamonds. They sound a lot better than "off-color, yellowish diamonds" or "brown diamonds."

What is this champagne?

Most diamonds with a yellow or brown cast were once the rejects of the jewelry industry. If a "white," or colorless, diamond had a tinge of color, its value went down. Except for deeply saturated colors, called fancies, color in diamond was not good. Typical yellow and brown diamonds were not considered gem quality and were relegated to industrial use.

Now, in a triumph of marketing, brown diamonds are in fashion. Yellow diamonds, from honey to clove, are displayed by high-fashion designers and highlighted in the jewelry department of your local J.C. Penny. There is even an online seller dealing exclusively in "champagne diamonds."

C1-C7 Grading Scale?

The Argyle diamond mine, which produces most of the champagne diamonds, openly promotes its products as yellow and brown. It has devised its own color-grading scale, which goes from C1 to C7 -- from "light champagne" to "cognac."

The C1-C7 scale is an attempt by Argyle mines to bypass the widely respected Gemological Institute of America (GIA) grading system in order to boost sales on its yellow and brown stones. Graded by GIA standards, these diamonds wouldn't look good.

The system established by the GIA, and recognized throughout the world, grades white diamonds on a scale ranging from D (colorless) to Z.  As you go down the scale, stones appear increasingly tinted and off-color. Other qualities being equal, the lower the color grade, the lower the valuation.

The C1-C2 "light champagnes" would be at the bottom of GIA's scale for white diamonds. The "cognac" colors,  C3-C7, would fall at the lower end of the GIA scale for colored diamonds, or fancies.

Diamond Grading Scale

In short, the C1-C7 grading scale is a marketing tool and has no relevance to insurers. Diamond appraisals, and diamond certificates, should follow the GIA color-grading system.

Is it a fad?

Brown Fancy Diamond
Click to enlarge

Brown has become the "in" color — for clothing, for interior decorating, and for diamonds. As usual, stars are setting the trend, with brown diamond rings, pendants, and watches. At the Academy Awards a few years ago Maria Menounos wowed the crowd in a $2.5-million dress made of champagne-colored diamonds — 3,000 carats worth.

Rio Tinto, owner the Argyle mine, released a flood of materials promoting yellow and brown diamonds to jewelry manufacturers and to the public.  The colors are widely shown in jewelry chain stores. Champagne diamonds may be selling now, but will their value hold when the fashion passes?

For insurers, the solution is to be sure the appraisal uses the GIA grading scale. This will accurately represent the color of the diamond, so the gem's value can be determined at time of loss.

Is it a fancy?

Yellow Fancy Diamond
Click to enlarge

Fancy is the term for deeply colored diamonds. True natural fancies are rare and most are expensive. These are not off-color, faint or pastel shades, but more  deeply saturated colors.

Fancies derive much of their value from the quality of their color. GIA grades fancies, like other colored gems, using specific gemological language to describe tone, saturation and hue. "Cognac" is not gemological language.

It is possible to have a brown fancy diamond, but not every diamond that's called "butterscotch" or "espresso" has the color — or the valuation — of a fancy. The GIA system gives a precise color description.

And: is it natural?

Beauty is in the eye of the beholder but, as an insurer, what you care about is valuation.

A number of labs synthesize diamonds. The popular push of "champagne" colors could be a boon for diamond growers, since yellows are easy to produce. In marketing, these lab-made stones are often compared with natural fancies. Although synthetic diamonds are visually and chemically the same as mined diamonds, the difference in value between natural and synthesized fancy diamonds is huge.

If a diamond is lab-grown, that origin should by law be disclosed to the buyer. This is not always done, or the disclosure may be only verbal. To avoid a future overpayment, be sure the appraisal specifically states that the diamond is either natural or synthetic. This is especially important for diamonds represented as fancies.

A mined diamond can be treated to enhance its color—so the stone is natural, but its color isn't. A low-quality yellowish stone can be turned into a rich, glowing yellow. However, though the stone may look more attractive to the consumer, a trained gemologist can see the truth.

Color-treated stones are often low quality to begin with, and upping the color is a way to rescue them and make them more salable. (See January 2005 JII for a discussion of irradiation and hpht treatments to enhance diamond color.) But if a diamond has fractures or inclusions, changing its color doesn't eliminate those flaws. Its poor clarity still lowers valuation. Also, the color treatment may not be permanent, and the insurer is not responsible for the failure of a gem treatment. Be sure the appraisal states that the diamond is untreated.

FOR AGENTS & UNDERWRITERS

To properly insure diamonds, you needn't keep up on fashion trends in jewelry. Just be sure you have a trustworthy appraisal. An appraisal on JISO 78/79, by a Certified Insurance Appraiser™, is best.

Such an appraisal will

For high-value diamonds, it is wise to also have a grading report from a reliable lab, such as GIA.

Keep on file any gem descriptions such as the C1-C7 color scale, or other marketing materials your client may present, but remember these do not substitute for an appraisal.

FOR ADJUSTERS

If you have a JISO 78/79 appraisal, it should contain all the information you need to price a replacement.

If you are working with other documents, use JISO 18 to put all your information into a standardized format. This will organize the information you have and help determine whether any details are missing.

Carefully examine documents for synthetic or equivalent words: cultured, lab-grown, man-made, etc.

Examine the documents for the words treatment or enhancement.

Manufacturers of synthetic stones often use their names as brands. If you see a brand name, be sure you understand the significance of it, or consider consulting a jewelry insurance expert. The price difference between a natural and a synthetic fancy diamond can be immense.

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