October 2016

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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Growing Bigger & Bigger Diamonds

Gem-quality lab-grown diamonds have been around for decades, in a large variety of colors, but they were not large stones. Usually they were from 1 to 3 carats.

Now things are suddenly changing, AND FAST.

Last year New Diamond Technology (NDT), a Russia-based company, startled the industry with a 10.02 colorless diamond. This year it followed up with a 10.2 carat blue diamond. One industry journal called that big blue "freakishly large."

"Freakish" – or the Future?

These big diamonds might be viewed as freakish partly because until recently diamond growers have generally turned out colored diamonds of 1 to 3 carats. Richly colored diamonds are extremely rare in nature, but labs made them, at least the small ones, rather easily. NDT's jump to 10 carats was a major breakthrough.

Description: Yellow-Radiant-Cut-LOOSE-LANNYTE-IF-D-Color-Lab-Created-Diamond-175-Per-Carat  Description: 1.06 Fancy Vivid Yellow Orange EmeraldDescription: 0.17 Fancy Deep Purplish Pink Round  Description: http://www.newagediamonds.com/images/stone/5105.jpg  Description: 0.69 Fancy Orange Cognac Emerald  Description: 1.67 Fancy Vivid Orange  Princess
Small-size lab-grown diamonds in a variety of colors


The company claims it can produce finished diamonds of 15 and 20 carats, and that even a 100-carat diamond is within reach. But, says the director, "I think the world is not ready for them yet."

The unspoken factor in this deferment is economic. Such large stones take much longer to produce, and the energy required makes them cost prohibitive.

Currently there isn't much of a market for diamonds this size and price. The diamond in the average engagement ring, for example, hovers around 1 carat, admittedly because of the price.

Price depends to some extent on supply. The supply of high-quality mined diamonds, especially large diamonds, is limited and is dwindling. But for lab-made gems it's just the opposite. As technology continues to advance, more companies will be producing more diamonds in larger sizes.

It's worth noting that a 10-carat diamond, while huge for current growers to produce, is not all that large. It would not be ostentatious to wear jewelry with a 10 carat diamond. The existence of such diamonds at reasonable prices may well create the market for them.

What is such a large diamond worth?

In general, the value of lab-grown diamonds is significantly lower than mined diamonds of similar quality. It's now about 30% lower, and growers would like to get that down to 40-50% lower. Similar ratios are likely to apply to large (and super-large!) lab-grown diamonds.

NDT could not put a price tag on its 10-caret diamond because the production cost was extremely high. The company used the HPHT (high pressure high temperature) method followed by many other manufacturers, but with several patented steps along the way.

A smaller, 5.03 carat, blue diamond the company produced earlier this year sold for $250,000 to a retailer, who in turn sold it to a buyer for an undisclosed amount. The director of NDT asserted that an (untreated) mined diamond would likely fetch millions.

Risk of Fraud

Here's the rub: How do you know whether a diamond is mined or lab-grown?

Just this month, GIA's Hong Kong lab received for grading a 5.19-carat colorless diamond. It was not presented as man-made, but GIA is one of very few grading labs with the equipment needed to determine that it was indeed made in a lab.

Perhaps the gem's manufacturer was testing to see whether the gem's lab origin could be detected, perhaps the manufacturer hoped the gem would slip through as a mined diamond.

The name of the maker was not immediately known, but this incident suggests that more diamond-growing labs are at or near breaking the size barrier for colorless and fancy colored diamonds.

It is increasingly important for the insurer to have assurance, on the appraisal and lab report, that the diamond is either mined or lab-grown.


Lab-grown diamonds are true diamonds, manufactured in a lab from the same material as diamonds mined from the earth. Man-made diamonds have the same hardness and brilliance of mined diamonds and all the same physical, chemical and optical properties — but are valued at a significantly lower price.

In insuring colored diamond, or any diamond of high value, never assume the gem is mined (and therefore more valuable). Disclosure is crucial. Insist on an appraisal that states whether the stone is mined or lab-grown.

We don't use the word synthetic because it implies fake to most readers outside the diamond industry. But you may see synthetic on an appraisal, lab report, or other document. You may also see the terms grown, lab-made, man-made and cultured. They all describe a real gem (not a simulant or fake).

Gem-growing is a competitive field. Proprietary formulas and patented procedures make lab-grown gems increasingly difficult to detect. The expensive equipment needed to accurately identify lab-grown gems is beyond the reach of gemologists, including world class gemologists. We know for sure of only two grading labs that have the necessary equipment (though there may be a few others):

GIA tests every diamond to determine if it is mined or grown. If a diamond is found to be laboratory-grown, GIA issues a Synthetic Diamond Grading Report, which identifies the diamond as "Laboratory grown" and further comments: "This is a man-made diamond and has been produced in a laboratory."

Synthetic Diamond Report
(for lab-grown diamond)

Diamond Grading Report
(for mined diamond)

Many consumers take the word synthetic to mean fake. Since GIA uses the phrase "synthetic diamond report", most diamond growers will not submit their stones to GIA for grading.

See Insuring Tips and Scam Update for more on insuring lab-made stones.


If diamond-growing follows the course of other technology-driven fields, once the development stage is over and larger quantities can be produced, costs will go down and prices will likely follow. For up-to-date valuation, consult an appraiser familiar with the pricing of man-made gems and the labs that create them.

As more lab-grown diamonds enter the market, so will fraud.  With diamonds, the price differential between mined and lab-grown is significant. Mistaking a lab-made for a mined diamond could mean an overpayment of tens, if not hundreds, of thousands of dollars. For a deeper look at fraud involving lab-made diamonds, see Synthetics in the Mix.

Read carefully all documents on file. Do not assume that a gem is mined unless this is specifically stated on the appraisal.

The word synthetic has unpleasant associations for some buyers, so gem manufacturers may use other terms to describe their gems. Look over the appraisal and diamond report for such terms as created, grown, lab-made, man-made, lab-grown, and cultured.

Often lab-made diamonds are identified by the manufacturer's name, such as Gemesis or Chatham, so carefully inspect the appraisal and sales documents for any brand names. Recognizing these names, or working with a jewelry expert who does, could save you thousands of dollars on a claim.

For jewelry with fancy colored diamonds, a price that's "too good to be true" is a major red flag. Do insurance to value (ITV) calculations to check for a large discrepancy between purchase price and replacement cost.

Some major gem-growers are proud of their product and include disclosure information in their advertising and with each sale. Their name may also be inscribed on the girdle of the stone. However, disclosure information can be lost and an inscription may be hidden by the setting, so always seek a reliable appraisal and gem report.

Disclosure information can also get "lost." A customer may buy jewelry with lab-grown diamonds, not understanding the meaning of a term like cultured, for example, or not appreciating the extreme difference in value between mined and lab-made diamond. When he becomes aware that he made a bad purchase, he may "sell" it to the insurance company via a fraudulent claim.


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