March 2002

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

GIA Diamond Reports - July

Not just a pretty face - August

Moral hazards on the rise - September

Hurricanes, fires, floods—and jewelry insurance - October

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

Growing 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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GIA Diamond Report

What is a Diamond Certificate?
Is it better than an appraisal?

The Gemological Institute of America (GIA) established gemstone grading systems that have been adopted internationally. For a fee, GIA's Gem Trade Laboratory will examine and grade any diamond over .23 carat and will disclose its findings in a paper known as a Diamond Grading Report, commonly referred to as a diamond certificate.

For identifying diamonds, or for settling disputes over qualities of particular gems, a GIA Diamond Report is regarded as an impartial arbiter. A Diamond Report is important for insuring any high-quality diamond of a half-carat or more, as it provides a backup to the seller/appraiser's description. However, it is not a substitute for an appraisal because it does not assign value to the diamond, nor does it describe the jewelry as a whole.

Anatomy of the GIA Diamond Report *

The GIA's report contains the following information.

  1. Report Number. Along the left side is the number uniquely identifying this report in GIA's computer. This number can also be laser-inscribed on the diamond's girdle (see diagram below) to permanently identify the stone.
  2. Date of the report.
  3. Shape and Cutting Style. This is the shape into which the gem is cut, such as oval brilliant.
  4. Measurements. Measurements are given in three dimensions, to the hundredth of a millimeter.
  5. Weight. Weight is to the hundredth of a carat.
  6. Proportions. Proportions describe the ratio and angles of major physical features of the diamond. Depth and table are given as percentages, girdle and culet are described in a term such as small or medium. (Caution! Important information is missing here. See "What's Left Out" in the next section.)
  7. Finish. This refers to the quality of the polish and the symmetry of facet placement.
  8. Clarity. This grade is determined by the number, size, placement and nature of inclusions and/or surface irregularities. The GIA's Clarity Scale appears on the diamond certificate.
  9. Color. This grade is determined by comparing the diamond with a set of GIA master color comparison stones. The GIA's Color Scale appears on the certificate.
  10. Fluorescence. Fluorescence (when present) describes the degree of sensitivity of a diamond to long wave ultraviolet radiation, such as is present in daylight.
  11. Comments. Characteristics not covered above may be listed here.
  12. A diagram shows the general shape of the stone as seen from the top and from the bottom. The GIA describes the types of internal and external identifying characteristics that are present in the reported diamond (i.e., crystal, needle, and feather). In the diagram, these characteristics are plotted as close to their actual positions as possible. The diagram serves to illustrate the clarity grade, but more importantly it is a basis for the future identification of this diamond.
  13. The paragraph at the right describes briefly how the stone is examined. It also states that the report is "not a guarantee, valuation or appraisal."
  14. Logo. Each report contains the GIA GTL company logo and hologram seal. The report is laminated in plastic to protect the report and to guard against tampering.

What's Left Out? CUT!

Cut is one of the "Four Cs" (along with color, clarity. and carat weight) that give diamonds their value. In fact, cut accounts for fully half the value of the diamond. Yet crucial cut information is missing from the report.

What the diamond report gives as "shape and cut" is really just the name of one of the standard shapes into which the raw stone is faceted. Cut as an attribute of value refers to the geometric proportions of the gem. The precision of these proportions affects how the stone refracts light, which is what gives the diamond its brilliance.

Cut comprises three primary measurements. The GIA report lists only one cut proportion, the table. The other two crucial measurements, crown angle and pavilion depth, are omitted.

The report does not give an overall grade for the quality of the cut (as it does for color and clarity). The GIA does have a cut grading system that it uses in-house. However, it deliberately leaves cut grade off the certificate. This is mainly due to political pressures within the diamond industry. Most gems are not properly proportioned; this is done to increase their carat weight, and the industry does not want this to be apparent in the diamond report. (See a discussion of cut proportions for more information.)

Diamond Certificate vs. Appraisal

A Diamond Certificate is a valuable document for the insurer if there is no appraisal or only a perfunctory appraisal. It is a professional, impartial description of the gem, which has very useful information if a claim is ever made.

However, a good appraisal should contain all the information on the GIA certificate. The appraisal will also have valuation, the missing cut information (crown angle and pavilion depth) and a description of the jewelry as a whole (metal, setting, etc.)

Unfortunately, many appraisals do not give cut proportions. That's why insurers should encourage jewelers to use and policyholders to submit the ACORD 78/79 Appraisal, which does include cut proportions.

* This description follows the format of the GIA's new report. Diamond Reports prior to 2000 contain the same information in a slightly different format.

FOR AGENTS & UNDERWRITING

A GIA Diamond Report is a useful document, especially for insuring a diamond valued at more than $2,000. Be sure the submitted certificate is for the diamond being insured. That is, there should also be an appraisal containing the measurements, weight and proportions of the diamond, and these should match the descriptions in the Diamond Report.

Not all diamond certificates are equal. The GIA is a respected organization that has set the internationally accepted standards for diamond grading. Diamond certificates/reports from the American Gem Society (AGS), which we will discuss next month, are also highly regarded. However, some certificates may come from unknown or non-existent organizations or laboratories. Our recommendation is to accept only GIA or AGS diamond reports.

When insuring a diamond of high value, it's best to have both a diamond report (from GIA or AGS) and an ACORD 78/79 appraisal. The appraisal includes all relevant information plus a valuation, while the diamond report gives an independent analysis of the gem's color and clarity grades. (This is worthwhile since color and clarity grades are often inflated; see the November 2000 issue of IM News.)

FOR CLAIMS

A GIA Diamond Report, along with the appraisal, is a reliable description for pricing a diamond replacement. Be sure to check that the diamond report is for the same stone described on the appraisal.

Occasionally diamond certificates are forged. If you suspect a forged report, use the report number to verify the report with the GIA. Their number is 760-603-4000. GIA website

 

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