May 2006

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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Big-Box Jewelry Retailers:
Watch Out for Their Insurance Appraisals

Where would you look for fine jewelry — Tiffany or Costco?
The Internet or your local jeweler? Who gives the best price?
Is price the only concern?

Big-box stores are not the first places you'd think to shop for jewelry, especially expensive jewelry. But that may be changing.

Sam's Club, a division of Wal-Mart, has been selling diamonds for more than 20 years. Last year they began carrying big-ticket jewelry, like this one-of-a-kind pink diamond pendant for $560,000.

Sale Price:

Wall-Mart is known for its broad range of low-priced merchandise. It is a destination for one-stop shopping. "Loyalist" customers, as the company terms them, visit the store 64 times a year and spend 77% of their grocery dollars there.

While keeping this reliable customer base, Wal-Mart has begun carrying more upscale merchandise to appeal to "the Selective shopper," the buyer looking for specialty items, who shops for value rather than just low price. It wants the public to see the store as not only a place to stock up on toilet paper and dog food, but also as a viable high-end jeweler.

Costco, too, is appealing to more affluent shoppers. Along with original paintings and etchings by Picasso, priced at more than $1 million each, it is offering quality jewelry.

Good Morning America recently ran a piece comparing shopping for diamond jewelry at Costco vs. shopping at Tiffany & Co. After the sales, an independent appraiser declared that in each purchase the buyers got exactly what the store said they were getting. The markup at Tiffany's was significantly greater, but the show stated that "the Costco experience was less romantic" than shopping at Tiffany's and the choices were fewer.

Then there's the Internet experience. Big-box stores join a host of online jewelry retailers, selling everything from the almost worthless right on up to whatever a buyer can afford to pay. Online retailers can offer a huge selection because they needn't house the stock. They can special order anything a customer wants and have it drop shipped to the client. This lack of overhead allows for very low prices.

Many large retailers, including big box outlets, jewelry chains, and Internet sites, offer "certificates" with their diamond jewelry. These documents often carry grossly inflated valuations. For the pendant pictured above, notice that the jewelry comes with an IGI certificate setting its replacement value at $813,000 – 45% higher than the purchase price.

Such valuations assure buyers they are paying well below the jewelry's true worth. Although the jewelry may (or may not) be accurately described, the bogus valuation is meant to lure the customer and perhaps defraud the insurer.

How does a brick-and-mortar store compete?

One well-known jeweler, whose store is a destination for customers from all over the country, confronts the Internet challenge on its own terms. When a potential customer comes in saying, "I've done my research, I've found such-and-such on the Net at such-and-such a price," the jeweler says, "Give me your credit card and I'll order it for you." The customer is taken aback. He wants more from the jewelry store — personalized attention, a professional's expertise, some time in a luxurious setting where he can handle the merchandise and learn about it, a sense that his $2,000 (or $200,000) expenditure is an important event. But that glamorous setting, personal service, professional training and browsable inventory come at a price.

Big box means a smaller selection and no frills. Maybe the sales clerk is knowledgeable, maybe not. A couple aisles over, they're selling TVs or canned soda. As an official of Sam's Club put it, "We're not trying to cover up who we are. We're selling beautiful diamonds on a concrete floor."

The big box is also selling its name and its guarantee. If you're dissatisfied with your quarter-million dollar purchase, you can return it and get your money back. A small jewelry store, with a fraction of the big box's gross receipts, can't match that.

As for bargains: for all jewelry sales, it's buyer beware. The jewelry may not be as described. The seller may be untrained, mistaken, or just plain lying. The seller's valuation, or the "independent" appraisal he supplied, may be grossly inflated. An appraisal from the seller may exaggerate the jewelry's qualities and/or value.

It's best to have some general information about gems and jewelry before going shopping. We recommend using the GemQuote® Checklist for Comparison Shopping to compare qualities and prices at various retailers. And that advice also applies to the insurer buying replacement jewelry.

A last word of caution: if the jewelry does not come with the insurance industry's standard, a JISO 78/79 (formerly ACORD 78/79) appraisal, go to a Certified Insurance Appraiser™ immediately after the purchase to obtain such an appraisal and verify the jewelry’s qualities and valuation.


Big-box retailers generally supply certificates with the jewelry they sell. Often these come from unreliable labs and carry inaccurate descriptions of the jewelry and notoriously inflated valuations. Such certificates are of little value.

Rely only on diamond reports/certificates from reputable gem labs, such as the Gemological Institute of America (GIA) and the American Gem Society (AGS). They describe the diamond but do not carry valuations. See Diamond Certificates and the April 2002 newsletter for more information on these diamond certificates.

Compare the appraisal with the sales receipt. A large discrepancy between purchase price and valuation indicates an inflated valuation. Such a discrepancy should be questioned even if the sale occurred years before, because jewelry can depreciate as well as appreciate in value

A reliable appraisal comes from a jeweler/appraiser who is a Graduate Gemologist and, preferably, a Certified Insurance Appraiser™. It should be prepared on the insurance industry's standard, the JISO 78/79 (formerly ACORD 78/79) appraisal form.


Carefully check and compare all documents on file, to gather as much information about the jewelry as possible. A simple tool for this purpose is the Jewelry Appraisal and Claim Evaluation form, JISO 18 (formerly ACORD 18).

Keep in mind that often appraisals supplied by the seller are sales tools meant to impress the buyer. Their valuations may have little real-world basis. If the appraisal shows a valuation considerably higher than the sales receipt, suspect an inflated valuation.

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