December 2007

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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How do you like your rubies —
leaded or unleaded?

Lead-glass is the latest additive for bargain-basement rubies. It masks a badly fractured stone, but the result is no match for high-quality ruby.

Rubies with lead-based glass filler began appearing on the market about two decades ago. But in the past few years, the trickle has turned to a flood.

Leaded: Low-quality ruby,
pumped with lead-glass
to conceal inclusions,
wholesales for
$2-$15 per carat
Unleaded: Ring with a
single 4-carat natural Burma ruby — even with some inclusions —
is valued at $50,000.

Photo by Jessica Arditi
and Sun Joo Chung of AGL


There's nothing new about gemstone clarity enhancements. Emerald, for example, is commonly fracture-filled to improve its appearance, as discussed in the November newsletter.

For the supplier, fracture-filling is a money-maker. The treatment

Low-quality ruby rough is the starting material
for lead-glass enhancement

Photo by Fred Kahn and Sun Joo Chung of AGL

For the buyer and insurer, this treatment

How Bad Is It?

Glass Isn't Ruby. "These stones are often so heavily treated that it is not always possible to determine how much of the stone is actually ruby and how much is glass," said Christopher P. Smith, VP and Chief Gemologist at American Gemological Laboratories (AGL). "In their natural state, these stones are translucent to opaque, with extensive cavities, channels and fractures."

Durability of the Filling. Researchers have found that when a filled stone is heated to high temperature, the filler begins "sweating" and after a few moments flows out of the stone.

The filler also becomes damaged when exposed to solutions used for cleaning gems, and is even harmed by common household products such as bleach, ammonia and lemon juice. Once the filling breaks down, the stone's fractures are again visible.
A large piece of the yellow-to-orange colored lead-glass used in the treatment is still attached to a piece of ruby rough.

Photo by Fred Kahn
and Sun Joo Chung
of AGL

Weakness of the Gem.Corundum (ruby and sapphire) is one of the hardest materials known (9 on the Mohs scale—only diamond is harder) and its toughness rating is "Excellent." Yet a highly fractured ruby that's held together by filler could fall to pieces if the filler is destroyed.

When the glass filling is damaged, fracturing becomes evident

by Christopher P. Smith of AGL

The Mask. Fracture-filling merely masks a low-quality, unattractive and weakened stone. Fracture-filled rubies are worth much less than untreated natural rubies, but the treatment is not always disclosed.

Although the new lead-glass treatment can easily be recognized by a gemologist, many jewelry retailers are not gemologists and do not even examine the gems they sell. A less-than-honest jeweler could leave off mentioning the treatment, while emphasizing the stone's low price.

Disclosure!  AGL Takes a Major Step

The proliferation of stones with lead-glass filler is a serious problem. Disclosure is essential because the treatment greatly affects both durability and valuation.

AGL, a lab that specializes in reports on colored gems, has taken a break-away stand by highlighting the treatment. Their disclosure is not subtle. From now on, AGL reports will identify such treated stones as "composite ruby" (rather than ruby) and will specifically describe the treatment.

This new AGL report policy is a great service to consumers (and insurers) because

We heartily applaud this detailed description of the enhancement and its consequences. We hope other labs will be equally specific in their descriptions.


Would we knowingly insure something with a manufacturer's defect?

It is our recommendation that fracture-filled rubies not be insured at all because the fractures constitute inherent vice.

There is always the danger that gem treatments will not be disclosed — by the supplier, the dealer, the jewelry manufacturer, the retailer, or the consumer — either out of ignorance or as deliberate fraud. The insurer is at the end of this chain and could wind up grossly overpaying a claim.

Clarity enhancement has a serious effect on valuation. For all rubies, be sure the appraisal either explicitly states that the stone is untreated or lists the treatments, such as fracture filling or lead-glass enhancement.

Not all jewelers are trained gemologists with proper gemological equipment.  Not all jewelers even examine the gems they sell. For high-priced ruby jewelry, be sure the appraisal is written by a jeweler who is

Be especially cautious with jewelry bought from sources like online auctions and shopping channels. Ebay auctions, for example, have rubies with a starting bid of one cent, though one of these gems was "appraised at $800." Treatments are almost never mentioned in the advertising, and appraisals and lab reports from such sources should not be relied upon. For more discussion, see our issues on Ebay Shopping (September 2007) and  TV Shopping (October 2007).

Gem lab reports can be useful, but all lab reports (or certificates, briefs, information cards, summations of appraisal, or whatever they may be called) are not equal. 

AGL produces the best colored stone certificate available, as we discussed in our issue on colored stone reports. Unfortunately, it follows its own nomenclature for describing color, rather than relying on the GIA system widely in use. Although AGL's system can be converted to GIA's, doing so becomes a task for the customer (or insurer) and makes comparison shopping difficult.

A gem report, even from a reliable lab such as AGL, is not a substitute for an appraisal because it    

This information should appear in your JISO 78/79 appraisal.


Clarity-enhanced stones are worth far less than unenhanced rubies of similar appearance. Use every means possible to determine whether or not the ruby has been fracture filled.

Study the appraisal and other documents for such words as treated, enhanced, clarity enhanced, lead-glass enhanced, fracture filled or composite ruby. This is crucial information when you are pricing a replacement.

Compare the sales receipt with the appraisal. If there is a great discrepancy between selling price and valuation, the selling price probably reflects value more accurately. If the sale price seems "too low," it's possible that the gem was fracture-filled or was synthetic. A jewelry insurance expert may help in determining this.

If a claim is made for damage, ALWAYS have the damaged jewelry examined in a gem lab by a graduate gemologist, preferably one who is also a CIA. The exam

If the ruby was fracture-filled, look closely at the inherent vice exclusion on the policy.

Ask the policyholder whether the jewelry has recently been cleaned or the gem reset, or whether it had been exposed to such common household solvents as bleach, ammonia or lemon juice. Fracture-fill materials often discolor or break down under the stress of heat or chemicals, causing the stone to appear damaged. In such cases, it's really the filling that's been damaged and the insurer is not liable.



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