August 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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Are Insurers Seeing Red
— Red Diamonds, That Is

You'll probably never see a naturally red diamond in your life. But you may well be seeing red diamonds. If you're asked to insure one, look very closely at the supporting documentation.

"Red diamonds are almost priceless — and almost impossible to obtain,” says one gem industry report. Each year the Argyle mine in Australia, the largest producer of fancy colored diamonds in the world, invites a select group of buyers to bid on its finest red and pink diamonds. From the mine's annual output of some 600 million stones, a mere 60 typically make it to this select offering — a "stunningly minute” number, as an Argyle officer notes.

The gems at this exclusive showing represent the best of the best, but even these diamonds are not, strictly speaking, red. They are graded as "vivid Purplish Pink,” "intense Purplish Red,” "fancy Brownish Red,” etc.

Hancock Red DiamondA natural diamond that is truly red is rare indeed. In 1987 the famous Hancock red diamond, weighing less than a carat, set an auction record by selling for $880,000, or $926,000 per carat.

Only a few other red diamonds are known to exist in the world. Experts say red diamonds would now sell for more than a million dollars per carat — should any appear on the market.

But red being the attraction that it is, and fashion being the market force that it is, red diamonds are in demand. For the supply: technology comes to the rescue.

Color-Enhanced Diamonds

Since earliest times diamonds have been coated to look red, but these coatings could be detected easily and could also wear off. Modern techniques are more sophisticated. Last year a British lab examined a pink diamond that turned out to have a coating applied only to its pavilion — the lower part of the stone. In a setting, a coated pavilion would most likely be inaccessible to examination and the treatment would go undetected.

During the 1950s technicians began using irradiation to make diamonds red, but the result was unattractive. Recent methods, involving high pressure and high temperature (HPHT) and/or irradiation, have transformed unattractive brownish diamonds into radiant yellows, greens and blues. But an attractive, saturated red remained out of reach.

Now there has been a breakthrough. Lucent Diamonds developed a method for predictably producing deep red diamonds. It involves a combination of HPHT, irradiation and annealing, a precisely controlled heating and cooling process. It markets the color-enhanced gems as Imperial Red Diamonds.

Imperial Reds, available only through custom designers and high-end stores, sell for about 1-5% the price of natural red diamond (if natural reds were available!).

Synthetic Red Diamonds

Pink DiamondMore and more gems can now be made in the lab. Red diamond, almost impossible to find in nature, is a perfect candidate for synthesizing.  And so are the pinks. "We can grow reds now,” says Tom Chatham of Chatham Created Gems, "but find the market wants pinks.”

Synthetic diamonds are real diamonds (not imitations) that are made in a lab. They have the same composition and properties as diamonds found in nature and many synthesized diamonds are of high quality. But mined diamonds have a higher value than synthesized diamonds so, for purchaser and insurer, the distinction is crucial. See the February 2005 issue for a more detailed discussion of Synthetic Colored Diamonds.

How Red Is Red?  

For naturally red diamonds, an important consideration is: How red is it? With all colored gemstones, the quality of the color is what most determines valuation. The price difference between red diamond and pink diamond is huge. Any departure from true, saturated red —  purplish red, reddish brown, vivid pink, and so forth — draws a significantly lower price than red.

Rob Red DiamondThis means the appraiser must describe the color in specific, widely accepted gemological terminology.  The appraiser must be a trained gemologist who deals in colored diamonds and is familiar with trends in the marketplace, such as the prevalence of color enhancements and synthetic diamonds.

The Imperial Reds, for example, are hard to recognize unless one knows what to look for. Diamond grading labs can detect the treatment by its distinctive inclusions, color zoning, fluorescence and unique spectroscopic features. The appraiser must have the knowledge and equipment to examine the stones properly and to distinguish color-treated stones and synthetic stones from natural red diamonds.


Every Imperial Red Diamond is laser-inscribed on its girdle by Lucent Diamonds. This inscription should be noted on the appraisal. However, since laser inscriptions can easily be polished off, the absence of such an inscription is not significant. The appraiser must examine the stone and independently determine whether it is naturally colored or color enhanced.

Each Lucent red diamond that is over .5 carat in weight comes with a certificate from the Gemological institute of America (GIA) or the European Gemological Laboratory (EGL), stating that it is natural diamond that has been color treated.  But if this identifying paperwork gets "lost,” an unscrupulous seller could supply a certificate from an unreliable or fictitious lab.

Imperial Reds are the first color-enhanced red diamonds to hit the market. There will undoubtedly be more, as other companies perfect their techniques. Even at 5% the price of the extremely rare naturally red diamond, jewelry with color-treated reds is still a significant purchase (and could mean a significant payout). It's essential that the color treatment be disclosed on the appraisal.


A treated diamond is worth far less than one that is naturally colored. Disclosure is essential.

A synthesized colored diamond is worth far less than a natural fancy colored diamond. Disclosure is essential.

Naturally colored diamonds are rare and naturally red diamonds are extremely rare. Don't assume that a diamond you are insuring is naturally red.  Most likely it is color-treated or synthetic, and this should appear on the appraisal.

Red Diamond - Chatham CreatedThe appraisal should explicitly state that the stone is natural and untreated; or it should state that it has been color treated or "enhanced;” or it should state that the stone is synthetic.

A red diamond, whether treated or naturally colored, should come with a diamond certificate from a reliable independent lab, such as Gemological institute of America (GIA) or the American Gemological Society (AGS). Certificates from other labs may not be reliable.

GIA does not certify synthetic diamonds.

Beware of appraisals supplied by the seller. Insist on a JISO 78/79 appraisal (formerly ACORD 78/79), the insurance industry's standard for detail and accuracy.


Natural fancy colored diamonds, especially reds, are very rare and very expensive. Color enhanced diamonds and synthetic colored diamonds are available for a fraction of the price of natural fancies.

Inspect the appraisal and diamond report carefully for terms suggesting that the stone has been color enhanced or treated. Such information is sometimes not obviously stated, but this is an instance when one word can mean a tremendous difference in valuation!

Check for terms indicating the stone is lab-made, such as synthetic, cultured, created, grown, and lab-grown.

Check appraisal documents for brand names, which can help determine quality and verify valuation. It may be useful to consult a jewelry insurance expert.

Any colored diamond approaching .5 carat should come with a certificate from a reputable independent laboratory, such as the GIA Gem Trade Lab or AGS Labs. (GIA does not certify synthetic diamonds.)


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