December 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


What's a Certified Appraiser? - January

Best Appraiser Credentials - February

Are the diamonds you’re insuring real? - March

Handwritten Appraisals - April


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

GIA Diamond Reports - July

Not just a pretty face - August

Moral Hazards on the rise - September

Hurricanes, fires, floods—and jewelry insurance - October

Inherent vice / wear-and-tear losses are rising - November

FRAUD UPDATE – lack of disclosure, false inscriptions & doctored docs - December


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


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


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


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


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


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


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


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


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


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


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


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

Grading the Color of Colored Diamonds

New GIA Cut Grade for Diamonds - December


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


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


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


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


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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CZ – The Great Pretender

This past September a California jeweler was arrested for passing off fake diamonds as real to at least twenty customers. Those fakes were made of cubic zirconia — CZ — the cheapest imitation diamond.

At the same time, many owners of expensive diamond jewelry are enthusiastic about buying and wearing designer jewelry set with CZ. What's going on? Is CZ a gem, or is it just fake diamond ? Should you insure it?

Which is CZ, which is diamond?

Which is diamond, which is CZ?
(See answer below.)

CZ is the least expensive and most common diamond imitation, and it's a very believable diamond "look-alike."  It has impressive flash and is almost as hard as diamond. Because CZ is synthesized, it can be flawlessly clear and have the color of the highest grade diamond, with no undesirable yellow or brownish tinge. Good quality CZ can't be distinguished from diamond except by an experienced gemologist.

Just to be clear about the terms . . .

Synthetic diamond is real diamond made in a lab from the same ingredients as natural diamond found in the earth. Synthesized diamond is genuine diamond, though its market price is currently below that of mined diamond.

Simulated / fake / imitation diamond is made of completely different materials from natural diamond. These terms describe a stone that is not in any sense real diamond. The value of a fake diamond is a tiny fraction of the value of natural or synthesized diamond.

CZ resembles diamond in appearance, but its composition is completely different. CZ is not diamond, but has been used to imitate diamond.

About CZ

A small amount of natural CZ was discovered in the 1930s, but CZ began to be widely produced in the 1970s. CZ has revolutionized costume jewelry, where it is used as an inexpensive substitute for diamond. It also has a major role in scams, where it's passed off as diamond to unknowing buyers. Now it has a new role: CZ is coming into its own as a centerpiece in jewelry.

Though gemologists resist calling it a gem, Internet and TV retailers of CZ jewelry have no such reticence. It has the beauty of diamond, they say, at a much lower price. And what's wrong with imitation, anyway?

There's a huge business in jewelry that mimics pieces worn by celebrities. Online sites offer "designer inspired" CZ jewelry and "original reproductions" at a fraction of the diamond jewelry prices. One site organizes its wares by celebrity name and then occasion. "Angelina Jolie at Cannes 2007" shows the star wearing diamond earrings that you can buy in CZ for $93. Or you can get "Oprah's Oscar Look," CZ version, for $65.

Market-watchers say the popularity of CZ jewelry is inseparable from the rise of home shopping networks. QVC and HSN each sells its own brand CZ diamond simulant. QVC bypasses the "diamond is forever" hype and markets its Diamonique® CZ engagement and wedding rings as a good compromise for couples on a strict budget.

Upscale marketers are selling CZ jewelry "for everyday wear" to buyers who own diamond jewelry but, for example, don't want to risk taking it when they travel. CZ jewelry that is well designed and crafted, and uses quality metal, can yield a piece of fine jewelry at a much lower price. One gem expert even said that, in view of the quality decline in mined diamonds and the prevalence of gem treatments, people are looking to CZ as "a sure thing." These buyers know what they're getting.

Well, some do but others may not. A recent ad, from a business describing itself as "the world's largest online jewelry marketplace," pictured a sparkling ring and the words "1 carat solitaire." It didn't use the word diamond — but the reader might hear that word anyway.

Some buyers don't care what the stone is, as long as it looks good and the price is right. CZ is incredibly cheap to produce, with CZ rough selling at pennies per carat. This should make the finished jewelry immensely lower in price than diamond jewelry.

Which is CZ, which is diamond?

Which is diamond, which is CZ?
(See answer below.)


But out-and-out fraud still exists. CZ maintains its role as imitation diamond. It looks like diamond to the untrained eye, and it probably will continue to be passed off as diamond.

Let's return for a moment to the story we began with, and look at a few insurance concerns. The jeweler who'd been passing off CZ as diamond had, at the time of his arrest, been selling the fakes for more than five years. Even the police spokesman was dismayed that none of the buyers had filed a police report. He noted that, in a scam going on for that long, there were likely to be a lot more victims who hadn't yet come forward.

As insurance professionals, we may wonder:

Here's another thing to ponder. The police initiated their investigation after the jewelry store had been robbed. Rumor had it that the robbery was faked, and this turned out to be the case. A bogus robbery would be a profitable insurance scam.  It's an easy way to convert a lot of low value CZ jewelry into diamond jewelry profits.


CZ is a good diamond imitation and is difficult to recognize without a proper examination. Most jewelers are not Graduate Gemologists and many don't have the training or equipment to examine the gems they sell. Even without intending fraud, it is possible for a jeweler to pass on fakes as real diamonds out of ignorance. An appraisal from the seller may not be reliable.

Be particularly cautious when insuring high-value jewelry. It is best to have a JISO 78/79 appraisal, prepared by a GG who is a Certified Insurance Appraiser™.

Technology plays an increasing role in the gem industry, including

All these things have a serious effect on valuation. Be sure the appraisal states whether the diamond is natural or synthetic and whether it has been treated.

A diamond report from a reliable lab is a useful verification of the diamond's authenticity and quality. Reliable grading labs include GIA, AGS, and GCAL (see the August 2008 issue for a detailed discussion). Reports from other labs may not be reliable, especially if they include valuation.

If you have a diamond report and an appraisal, be sure the report is for the stone being insured. Check that basic information, such as carat weight and cut style, is the same on both documents.

Be sure the diamond certificate is genuine! The passing of counterfeit certificates is increasing, as sellers realize how effective they are as sales tools. To verify authenticity of certificates from the recommended labs, follow the appropriate link. You will need the report number and the carat weight of the stone. 

GIA Report Check
AGS Report Verification
GCAL Certificate Search

CZ manufacturers also make colored stones — which may be passed off as fancy diamonds. Colored diamonds are extremely rare in nature and very costly. When insuring colored diamonds, use every means possible to be sure they are natural diamond — not CZ or other imitation, not synthetic (which are worth less than natural), and not low-quality color-treated diamonds. For fancy colored diamond, insist on a GIA lab report to verify the gem's quality.


Many makers of imitation diamond use brand names for their products. (Often the name is a play on the word diamond, to strike the right chord with the consumer, as in Diamonique®.) Examine the appraisal documents for mention of any brand names, as these can be important clues to valuation. If there are names you don't recognize, consider consulting a jewelry insurance expert.

For all high-value diamond jewelry, and especially for colored diamonds, use every means possible to be sure the diamond is not synthetic, color-treated, or an out-and-out fake. A mistake in this regard would result in serious overpayment.


Answers: Diamond or CZ? In both pictures, CZ is on the left, diamond on the right.


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