September 2004

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

Growing 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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Why Update an Appraisal?

The answer is simple:
Prices of gems and precious metals can drop!

It is widely believed that jewelry is a good investment. Most people expect that jewelry will at least hold its value, and will probably appreciate. A diamond is forever, they think. And what else, after all, is good as gold? They hold antique jewelry in high esteem. They see jewelry as enduring, beyond the ravages of time.

Let's look at some economic facts that affect jewelry consumers and insurers.


The jewelry industry, like any other, is affected by supply and demand. If for some reason gem material of a certain quality is in short supply, the price will go up. If a popular cut goes out of favor, or if the market is flooded with a particular gem, its price will go down.

For example, from 2003 to 2004, a 3-carat oval diamond (of good color and clarity) dropped in price from $11,500 to $11,000 wholesale. A one-carat princess cut diamond dropped from $4,500 to $4,300 in the same period.

In that same report in early 2004, diamond dealers said that 1.5-carat round cuts were in tight supply, diamonds larger than 5 carats were difficult to find, 3-carat emerald cut diamonds were doing well, etc. Professional jewelers use this information to determine what they can buy and to adjust their retail prices.

Thus, an appraisal's valuation for diamond jewelry is not just an estimation of value for "diamond," but for this particular cut, color, clarity, size and shape of diamond at this particular time.

For colored stones, the price fluctuations are even more dramatic. Consider the recent history of tanzanite. After a large find, the price was low. Then the main mine flooded, so the price jumped. After 9/11, it was rumored that tanzanite sales were funding Al Qaeda, so the price fell. Then supply shortages again drove the price up. In early 2003, tanzanite rough was selling for $300 a gram (or 5 carats); by June 2004, it was going for $700 a gram. Consumers who purchase during such a shortage will be paying top dollar, but the jewelry may be worth considerably less a year later.

Precious Metals

Prices of precious metals can also fluctuate.

The following chart (from illustrates the volatility of gold prices from March 1975 to March 2004.

The following chart (from illustrates the volatility of silver prices from March 1984 to March 2004.

Antique Jewelry

Policyholders may be attached to antique jewelry that has been in the family for generations, or they may even buy old pieces, perhaps at auctions. Do not assume that jewelry is valuable because it is old. It often happens that jewelry that has been in the family for years was not expensive to begin with, but price information was lost.

Jewelry is also subject to fashion. A style or setting that was once popular may no longer be considered attractive or desirable. An old stone may not be as well cut as modern methods make possible. A setting of multiple stones may include some gems along with some imitations — a common practice. Even the shape of a stone can go out of fashion.

An appraisal valuation is based on the current selling price of the jewelry. If the jewelry could not be sold today, its value may be little more than the gems and scrap metal.

Synthetics & Treatments

Oddly enough, the existence of synthetic (manufactured) gems can affect the price of natural (mined) gems. For example, the Chatham-created emerald, being a lab-made gem, can sell at a stable price. Since this is a top quality synthetic emerald, it has had the effect of holding down the price of natural emeralds. High-quality synthetic diamonds now coming onto the market are expected to have a similar effect on the price of natural diamonds.

Innovations in treating gems can affect the market for untreated gems. Recent technology allows irradiating poor quality drab-colored topaz to a bright blue. The irradiated blue stones are so attractive that the price for natural blue topaz plummeted (while the price of topaz in other colors remained stable).

For Agents & Underwriters

Since jewelry's value can be affected by so many time-related factors — fashion, weather, politics, supply and demand, industry competition, technology, synthetics — it is wise to have a new appraisal and valuation for scheduled jewelry every 3 to 5 years. A current valuation insures that the policyholder pays appropriate premiums and the carrier will not overpay on a claim.

Urge policyholders to submit a jewelry appraisal on ACORD 78/79, prepared by a Certified Insurance Appraiser™ (CIA). Such an appraisal gives a complete description of the jewelry. The CIA jeweler is a graduate gemologist, experienced in selling jewelry, and aware of trends and fluctuations within the industry, who is also trained in appraising for insurance.

If an appraisal other than ACORD 78/79 is submitted, score it for completeness using ACORD 18, Jewelry Appraisal and Claim Evaluation. If essential information is missing, you can use the form as a basis for discussing with policyholders the importance of having a complete descriptive appraisal. Consider doing insurance-to-value (ITV) calculations each time an appraisal is updated.

For Adjusters

When settling claims on scheduled jewelry, it's best to be working with an appraisal and valuation made within the last five years. If the appraisal is older, consult with a jewelry insurance expert, working on your behalf, to determine whether valuation accurately reflects the current market.

Next Issue:

Why Update an Appraisal? Part 2

Inherent vice, breakdown of treatments, and other factors may result in lowering jewelry's value over time.

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