November 2005

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

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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

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

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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Grading the Color of Colored Diamonds

Grading the color of a colorless diamond is straightforward: the less color, the better. For colored diamonds, called "fancy colored diamonds," assigning a color grade is a more elaborate procedure.

Color in Diamonds

In colorless diamonds, "color" is basically a deviation from perfection. A colorless diamond receives the highest grade ("D"). A diamond with a slight brown or yellow cast, which muddies the look of the stone, is considered "off-color." For such not-quite-colorless diamonds, the more color, the lower the grade.

For fancy colored diamonds — the fairly small proportion of all diamonds on the market that are naturally colored with dramatic hues, such as pink, yellow, blue or green — assigning a color grade is more complex. It requires assessing the various attributes of what we call color.

Color Grading Systems

There are two systems internationally recognized for grading colored diamonds: the GIA system, developed by the Gemological Institute of America, and the HRD system, developed by the Antwerp Diamond High Council.

Both are based on color descriptions developed in the 1930s by the American painter and art instructor, Albert H. Munsell.

The Munsell system describes color according to how people perceive it. In this system, every color can be defined by three parameters:

The Munsell Book of Color is a collection of removable color chips catalogued according to the three parameters. Each parameter has a numerical value, so each color is described by a unique set of numbers, called its Munsell notation. (More about the Munsell color system.)

HRD closely follows the Munsell notation, adding certain words to the description to make the color more understandable to those who are not color experts. It gives a name to the hue, such as blue or yellow-green, and it gives a prefix based on the combination of value and chroma, using words such as faint, dark or intense. Ultimately, the tested diamond is compared to reference stones to ensure consistency, and the final decision is based on the judgment of several graders.

GIA's lab also uses Munsell's three color parameters to arrive at a color description. In grading colored diamonds, GIA locates the gem in a "color space" defined by its hue, tone and saturation. After determining the hue of the stone being studied, the examiner compares the gem with an extensive set of reference stones located at strategic positions in the color space. Areas in the space are associated with certain terms related to tone and saturation. Gems that fall in those locations are graded with those terms.

In either system, a diamond's color "grade" is actually a precise description of the gem's color.

It is important to be aware that the terminology used in grading is very specific. Descriptive words like intense, vivid, faint, light, dark and deep represent different appearances of color — and hence differences in price and valuation! The terms are not casual and they are not interchangeable.

Examination is always done under controlled conditions. The stone is viewed in a standardized viewing box, under light bulbs that have a specific color temperature. Because a gem's appearance can change dramatically under different lighting, such as fluorescent vs. indirect northern daylight, an accurate grade depends on controlled lighting.

Important:

Some jewelers may use other grading systems or even a nomenclature of their own. This is unacceptable. Unless the grade is based on a system that is widely followed and understood, and one that is standardized to produce repeatable results, the color grade is meaningless.

Synthetic and Color-Enhanced Diamonds

Intensely colored diamonds, called fancies, are very rare in nature. Recent technology offers various methods of creating colored diamonds in the lab (synthetic diamond) and of treating natural diamond to produce attractive colors. Neither synthetics nor color-enhanced diamonds have the same value as natural fancy colored diamonds.

Click to enlarge

 

GIA grades natural colored diamonds. It also grades natural diamonds that have been subjected to HPHT (high pressure and high temperature) treatment to improve their color, and it identifies them as color-enhanced. GIA does not grade synthetic diamonds.

HRD grades only natural colored diamonds. It does not grade synthetic stones or color-enhanced stones.

For a discussion of color treatments for diamonds, see the January 2005 issue. For more about synthetic colored diamonds, see the February 2005 issue.

FOR AGENTS & UNDERWRITERS

For a color grade to be useful, the appraiser must follow a generally accepted system with a nomenclature that is understood. A Certified Insurance Appraiser™ (CIA) using the insurance industry's standard Jewelry Appraisal, ACORD 78/79, follows the GIA system, describing each stone's hue, tone and saturation.

Fancy colored diamonds are extremely rare in nature, some colors being rarer than others, and are priced accordingly. Synthetic and color-enhanced diamonds may be marketed — and priced — as if they were naturally colored diamonds. Customers, and even some jewelry retailers, may be fooled, but insurers can avoid being taken in. Be sure the appraisal is written by a trained gemologist who recognizes color treatments and synthetics, such as a CIA.

If the selling price seems too good to be true, this is probably not a naturally colored diamond.

Do not assume a fancy colored diamond is natural if that is not explicitly stated in the appraisal.

Do not assume a fancy colored diamond is untreated if that is not explicitly stated in the appraisal.

If a fancy colored diamond is presented as natural, look for a GIA or HRD lab report. These certificates are such important selling tools that retailers usually supply them. (At the same time, be sure a certificate is from either of these two highly respected diamond graders, and not from some less reputable lab.)

FOR ADJUSTERS

If a fancy colored diamond is presented as natural, look for a GIA or HRD lab report. Be sure the certificate is from either of these two highly regarded diamond graders, and not from some less reputable lab.

Remember that color grade terminology is very specific. Be sure the replacement price is based on the exact grade of the diamond.

For a damage claim, have the jewelry inspected in an accredited gem lab before settling. You want to be sure the diamond is of the quality represented on the appraisal.

For a total loss, index the appraisal's valuation to the date of the appraisal to calculate what the price would have been at that time. This approach can determine whether the valuation is consistent with a natural fancy colored diamond, or with a color-enhanced or synthetic stone.

Consider consulting a jewelry insurance professional to assist in settling claims that require jewelry, as well as insurance, expertise.

 

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