November 2012

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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Tanzanite – December's stone

This year is the 45th anniversary of the discovery of tanzanite, and the gem has been officially declared a birthstone for December. So tanzanite will likely be a popular gift during the upcoming holidays. Here's some of its story, a little about its hype, and a few things insurers should know about this new blue stone.

Tanzanite formed in the ground over 500 million years ago, but it's fairly new to us humans. The story is that a Maasai tribesman in Tanzania was herding his cattle when he came upon some bright blue crystals on the ground. At first the stones were thought to be sapphire, but they turned out to be a different mineral altogether.

Tiffany & Co. named the new discovery after its country of origin. An early publicity campaign proclaimed that Tiffany and Tanzania were the only places on earth where tanzanite could be found. Today it's on Caribbean cruises, shopping channels, and all over the internet.

Color, Clarity, Rarity

Much tanzanite rough is brown when it comes from the earth but heat treatment produces colors that can range from light blues and lilacs to deep indigos and violets. The treatment is undetectable but is assumed, and the colors are considered to be stable.

An attractive feature of tanzanite is pleochroism, which means it displays different colors from different directions. It usually looks violetish blue from some directions, purplish from others. Tanzanite is often compared to sapphire—and is sometimes fraudulently used to imitate that stone. Tanzanite is typically very clear, with few inclusions, even in larger stones.

Rarity is a great selling point for Tanzanite retailers.

Unlike diamond, which is mined in more than a dozen countries all around the world, tanzanite is found in only one place, a patch of a few square miles in the foothills of Mount Kilimanjaro. One expert says that, because of the unique geological conditions in the area, the chance of Tanzanite occurring anywhere else in the world is about a million to one. At current production rates, the existing mines will probably run dry in 25 years.

The gem's single source and limited supply make it at least a thousand times rarer than  diamond, according to the Tanzanite Foundation. One tanzanite site hyped it as "the most precious and sought after jewel in the world." This is pure puff-up, but some jewelers are acquiring tanzanite now so they'll be ready as the supply diminishes and prices go up. "There's a new generation that does not own important pieces of tanzanite, and the market is about to bloom," declared one jeweler.

Value

At the upper end of quality are such beautiful designer pieces as the graceful earrings by Yael Designs (above) that sell for $57,825 and the Tiffany brooch with a bow of diamonds (top of the page) selling for $105,000.

But tanzanite jewelry covers the gamut in quality and price, and a number of internet sites are already on the bandwagon, offering some much lower-priced pieces.

The example below shows a pair of earrings priced at $769. But notice that the ad claims: "Retail Value: $1,610." A selling price more than 50% below retail is extremely unlikely. The selling price is probably a more accurate indication of value, which is why we always recommend that the insurer ask for the sales receipt.

This ring shown below has both imitation diamonds and imitation tanzanite. Such inexpensive costume jewelry would not be insured, but fake gems are meant to fool. At the price point where jewelry is being scheduled, the insurer should be sure that a qualified gemologist-appraiser has examined the jewelry and written the appraisal and valuation.

Appraisals & Certificates

JTV (Jewelry Television) has dozens of videos on youtube promoting its tanzanite jewelry. One shows an appraisal for a stone valued at $3,970. The video does not state the selling price of the stone described, so we don't know if its valuation matches its selling price. As in the earring example above, a large discrepancy between selling price and valuation would suggest an inflated valuation.

An appraisal or certificate that is provided by the seller and that carries a valuation should not be relied upon, as it is in the retailer's interest to overstate the quality and/or value of the jewelry. Unfortunately, among internet jewelry retailers, inflated appraisals are quite commonplace. When insuring high-value jewelry, the agent should ask for an appraisal prepared by a qualified gemologist appraiser who is independent of the seller. The sales receipt is also useful in determining inflated valuations.

Some Further Caveats

Exotic appeal should not be underestimated. Tanzanite sells particularly well to American tourists on cruises in the Caribbean, and audiences at sea are a captive market. Vacationers in general tend to spend more freely, buying on impulse rather than comparison shopping. Any jewelry marketed to tourists may be overpriced or misrepresented, so the insurer should be wary of insuring such purchases. Again we urge: For high-value items, always require an appraisal from a qualified gemologist-appraiser independent of the seller.

Though a customer may be swept away by beauty, insurers should be aware that tanzanite is not suitable for all types of jewelry. It is a brittle material and easily chipped, so it's not the best gem for rings and bracelets, where the stone is vulnerable to impact. Tanzanite is also very sensitive to heat. It is likely to shatter if exposed to ultrasound cleaning or to a jeweler's torch during cleaning or resetting. Even common acids, such as vinegar and lemon juice, can cause irreparable damage.

In covering such jewelry, an underwriter might want to pay special attention to damageability and inherent vice.

Tanzanite pricing and values vary a great deal. The lighter colors are less valuable than intense colors, and even retailers will comparison shop because pricing continues to be in flux.  

For insurers, this means:

FOR AGENTS & UNDERWRITERS

Swindlers are taking advantage of the current popularity of tanzanite by introducing imitations, especially to unwary tourists. Be sure any jewelry purchased out of the country, on the internet, or under unusual circumstances, is backed up by an appraisal that meets the insurance industry's standards, the JISO 78/79 appraisal.

With tanzanite, as with all colored stones, it is essential that the appraising jeweler be trained and experienced in dealing with colored gems. He must be able to recognize imitations and synthetics; he must know the market for the gem he is examining and be aware of frauds and scams that may be current; and he must be able to describe, in proper gemological language, the color and quality of the gem.

For high-value pieces, get two appraisals; at least one of them should be from an appraiser who has a GG, FGA+ or equivalent degree, and preferably also has advanced training in appraising for insurance, such as a Certified Insurance Appraiser™.

Because tanzanite is very susceptible to breakage and chipping, it is an unwise choice for rings and bracelets. If you are insuring such tanzanite jewelry, consider imposing coverage limitations.

FOR ADJUSTERS

Be suspicious of any damage reported after cleaning or resetting tanzanite. This gem's fragility is an inherent vice.

On claims for colored gem jewelry, it is best to rely on a JISO 78/79 appraisal by a jeweler who regularly deals in colored gems. If such an appraisal is unavailable and other documents on file are inadequate, consider consulting a jewelry insurance expert who can help determine the accuracy of the appraisal.

Tanzanite is sometimes sold (and may be insured) as sapphire. For damage claims, be sure to have the jewelry examined in a gem lab to verify its identity and quality.

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