December 2011

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

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

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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How a Gem Lab Looks at Diamonds

We often emphasize the importance of having an appraisal from a gemologist who examines the jewelry in a gem lab.

The “gem lab” is not really a place but a set of equipment. Here are some of the most important instruments and how the appraiser uses them to determine quality and valuation.

 

Master Stones  (Color)

Diamond is the most popular gemstone, so instruments for evaluating diamond quality, especially the 4 Cs, are essential.

A set of 9 master stones is used to grade the color of diamond. These sets, available from GIA, have diamonds in color gradations labeled to correspond to the GIA color grades. The appraiser matches the subject diamond to one in the set.  A difference of one color grade can mean thousands of dollars, so the accuracy of the master set, consistency of lighting, and the care of the appraiser are all crucial. (Master sets made of CZ — cubic zirconia, or fake diamond — also exist, but professional gemologists do not consider them reliable.)

 

Diamond Light Box   (Color)

Since the presence of even the slightest tinge of color is what’s at issue in color grading, the influence of ambient colors must be minimized. If the system is to be standard, the light and viewing conditions must be consistent.

The diamond light box creates that standard environment: it simulates ideal daylight and reduces glare and reflection from colors in the room, creating optimal conditions for comparing a diamond with the master set of graded stones.

 

Gem Microscope  (Clarity)

The microscope allows the appraiser to detect inclusions in the stone. Based on inclusions, the appraiser grades the clarity of the diamond, preferably based on the GIA grading system. In some lab reports, inclusions are plotted on a diagram of the stone.

Examination of the stone will also reveal treatments done to conceal inclusions, such as laser drilling or fracture filling. These “enhancements” significantly lower the value of the diamond and should be reported on the appraisal.

Clarity grading is determined using 10-power magnification. A jeweler’s loupe magnifies to 10X, but a gem microscope is preferable because the stone appears against a black background, is lit from the sides, and is shielded from reflections, allowing a clearer, more accurate reading.

A gem microscope also is capable of higher magnification, usually up to 30X.The higher powers may be used to read laser inscriptions on thin girdles, or to examine laser drill holes that could weaken the stone.


Carat/Gram Scale   (Carat Weight)

An electronic scale measures weight in carats, grams, or pennyweight, so it can be used for weighing stones (in carats) or metals (in grams or pennyweight).

 

Proportionscope   (Cut)

Cut proportions — such as crown angle, pavilion depth, table diameter and girdle thickness — account for fully 50% of a diamond’s value. The proportionscope is an inexpensive device for determining proportions in round brilliant stones, the most popular shape.

This instrument projects an enlarged silhouette of the subject diamond onto a diagram showing the proportions of a well-cut diamond. By comparing the two, a trained gemologist can measure the cut proportions of the diamond in question and determine the quality of the diamond’s cut.

The proportionscope can be used only with loose gems. For mounted stones, the appraiser must estimate the cut grade. To insure the greatest accuracy, labs such as GIA will grade only loose stones.

 

Leveridge Gauge

This is a highly accurate device that measures stones to one tenth of a millimeter. The stones can be either mounted or unmounted.

 

Thermal Diamond Tester

Diamond is a great heat conductor, so thermal diamond testing is a quick way to distinguish diamond from look-alikes, such as moissanite or CZ.

 

Metal Testing Acids

Often the karatage of gold is not marked on the jewelry, or the type of metal may even be in question. To test the metal, the appraiser scrapes the item against an abrasive surface (the black square in the picture), where the metal leaves a trace. The appraiser then applies various acids to the trace to see which dissolves the metal.

 

FOR AGENTS & UNDERWRITERS

Visual inspection, without using gem lab equipment, is inadequate for properly identifying gemstones and simulants. In one TV investigation, half the jewelers consulted mistook a simulant (moissanite) for diamond.

Most jewelry retailers have no formal gemological training. An insurance industry study found that only 21% of jewelers writing insurance appraisals were graduate gemologists or the equivalent.

The most reliable insurance appraisal is a JISO 78/79, prepared by a trained gemologist (GG, FGA, or equivalent), with additional insurance appraisal training. One course offering such additional training is the Certified Insurance Appraiser™ (CIA) course of the Jewelry Insurance Appraisal Institute, Oakland, CA.

FOR ADJUSTERS

If you do not have a detailed appraisal from a trained gemologist appraiser, use JISO 18 to analyze information from the documents you have. This is especially helpful if you’re faced with a “narrative” appraisal. JISO 18 allows you to order the information from other documents to see what details may be missing.

Use descriptive data from the appraisal and other documents, rather than the valuation, to price a replacement.

Be sure to note the mention of any enhancements/treatments, such laser drilling and fracture filling, as these significantly affect value.

For all high-value diamond jewelry, use every means possible to be sure the diamond is not synthetic, enhanced, or an out-and-out fake. A mistake in this regard would result in serious overpayment.

For more information on insurance appraisals, view the video at http://www.jcrs.com/appraisal_presentation/WhatMakesAGoodAppraisal.pps

Next month we’ll cover the more advanced tools used in a well-equipped lab.

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