May 2008

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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Diamonds in the Rough
. . . Could Be a Rough Ride for Insurers!

Diamond rough—a chunk of unpolished, uncut stone, pretty much as it comes from the mine—used to be just the starting point for a piece of fine jewelry. Now it’s likely to be the centerpiece.

Nieman Marcus is showing it. Wall Street Journal is writing about it: Jewelry set with raw, uncut diamonds.
What’s the attraction? A diamond’s cut—its expert faceting—is what gives the gem its sparkle and brilliance. Without that faceting, what’s the appeal?

Faceting is a relatively recent development, and even a taste for diamonds that sparkle is said to be only a few centuries old. Since ancient times maharajas, kings and queens have prized uncut diamonds for their natural beauty. Jewelry designers setting the trend today praise the elemental look and feel of such stones.

De Beers says its Talisman Collection, which mixes rough with faceted diamonds, “explores ancient beliefs about the power and magnetism of the uncut diamond.” This collection plays on the theme of ancient roots with names like Babylon Bracelet, Sun Medal Pendant, and Hypnotic Pavé  Pendant. Other designers create elaborate custom designs for single rough stones.

One of the most famous rough diamonds is the Kahn Canary Diamond, worn by Hillary Clinton to both presidential inaugurations of her husband. The canary yellow diamond, owned by Stanley Kahn of Kahn’s Jewelers, was found at Crater of Diamonds State Park in Arkansas. It is said to have remained uncut in order to preserve its flawless natural beauty.

What about the 4Cs?

Jewelers, as well as buyers and insurers, rely on the 4Cs to grade a diamond’s quality and determine its value. How does diamond rough, used as a gem in jewelry, measure up?

Carat weight  The Kahn diamond is 4.25 carats—large if it were a cut diamond. But rough diamonds used in jewelry sometimes weigh more than 250 carats.

Color   For cut diamonds, the nearer the “color” is to colorless, the more valuable (except for the very rare deeply colored fancies). Rough diamond comes naturally colored in tones of white, yellow, brown, blue and pink.

Clarity  Clarity is not totally determined until after the cutting and polishing procedure. A couple of years ago Diamond in the Rough offered an 89-carat rough diamond cocktail ring. The president of the design company said “It was a slate-gray and silvery stone. We didn’t touch it, except to wash the dirt off.” The price of the ring was $100,000.

Cut  If you’re a regular reader of this newsletter, you know we emphasize that cut—the quality of the faceting—is responsible for as much as half the diamond’s value. Well....rough diamond has no cut.

Conclusion: the 4Cs do not apply. There is no external measure of the value of rough, no grading scales, no GIA certification. (Although buyers of diamond rough for the gem industry are trained to judge the general quality of rough,  their expertise is not available to consumers or insurers.) For jewelry shoppers, rough’s beauty is in the eye of the beholder.

What about valuation?

From the manufacturer’s point of view, the price of rough diamond is far below that of cut diamond. The value of rough-diamond jewelry comes from the appeal of the raw stone, the design and craftsmanship of the piece, and the price the designer or retailer puts on it. It could be said that that’s the beauty of rough. Only experts like De Beers can really know the quality of the stone, so it’s not possible to comparison shop.

These days most such jewelry is high-end, but we can expect trend trickle-down. Trend watchers cite a general move toward natural forms and away from glitz.

The insurer’s best protection is a detailed descriptive appraisal, sales receipt, photograph, and documentation as to the designer or manufacturer.

What about scams?

Already scams have begun. Over the past year the diamond industry has been plagued by fake diamond rough. In one incident, con artists defrauded international diamond dealers by selling them colorless topaz as diamond rough. Some buyers were suspicious because the stones were always ice-cold when tested, they had unusual fractures, and the price was too low. Yet the crystals tested positive on the diamond tester. But on the cutting wheel, the bogus diamond rough shattered.

Earlier this year another scam involving “ingeniously designed rough diamond imitation” appeared in the trade. In this case gemologists said the substitute was probably phenakite, a mineral beryllium sillicate.

As yet there are no known instances of faux rough diamond at the retail level. However, if experts are taken in, needless to say the lay jewelry shopper would never be able to distinguish raw diamond crystals from any number of imitations.

If jewelry with rough diamond were scheduled and the customer later discovered the diamond was fake, he might be tempted to “lose” the jewelry. To minimize the possibility of overpaying in such a situation, the insurer should get, up front, as much documentation about the jewelry designer and manufacturer as possible.


For jewelry with diamond rough, be sure to get a detailed descriptive appraisal, sales receipt, photograph, and any documentation as to the designer or manufacturer.


At this time, diamond rough is seen primarily in high-end jewelry sold in luxury jewelry outlets. The appraisal and documentation as to the designer and manufacturer, as well as the sales receipt, should guide you in determining the settlement.


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