December 2013

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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Synthetics in the Mix

Parcel containing 18 faceted diamonds

Synthesized diamonds are being slipped in with naturals. Synthetic diamonds are worth far less but, passed off as mined diamonds, they fetch a higher price.

It’s a problem even the diamond industry is worried about, and if the industry is worried, consumers and insurers should also be.

The issue is fraud—and who’s being cheated.

Lab-made diamonds have been around for quite some time. As the technology for synthesizing diamond improves, more lab-made stones are making their way to the market. As JII has reported in the past, not all of them are disclosed as synthetic.

Recently there’s been a big jump in fraud attempts. Several scams are afoot, at different places along the selling chain. Here are some examples of what’s going on.

1. Loose Diamonds

In the normal course of trade, diamond brokers and dealers sell faceted and polished gems in parcels to buyers who export them around the world. A parcel might contain dozens of diamonds or even several hundred diamonds, depending on the order.

Further down the trading line, a jeweler might order a small parcel of diamonds, often of a specific size. The parcel shown above has 18 diamonds, each weighing .06 caret. Such small diamonds, known as melee, might be used to enhance the setting of a larger central diamond. The buyer is told, or he assumes, that all the diamonds in the parcel are natural.

Recently, lab examinations have found that a number of these parcels contained synthetic diamonds mixed in with naturals. Sometimes 50% of the contents are synthetic. In one parcel from India, all 19 stones were found to be synthetic.

It’s not common practice for wholesale buyers to have each diamond in a parcel lab-appraised, as the cost would be prohibitive, especially for very small stones. Parcels salted with synthetics mean a serious loss for the buyer, since lab-grown diamonds sell for considerably less than natural diamonds.

An honest dealer would like to trade only with trusted sources, but it isn’t possible to trace the provenance of each stone. Generally buyers take the supplier’s word that the gems are natural—at least they have until now.

It isn’t known how many contaminated batches may have made their way into the marketplace without the stones being examined. Or, if stones in the batch are found to be synthetic, the buyer may not want to take the loss, so he moves them on as naturals. If the subterfuge goes undetected, all purchasers along the way will be victimized, including the ultimate jewelry consumer.

2. Set in jewelry

Straight line bracelet containing 43 round
brilliant diamonds

Other reports involve the sale of jewelry set with diamonds — diamonds that are said to be natural but turn out to be synthetic. These early reports are coming out of China, and the US is China’s biggest consumer. Jewelry is a worldwide business, with both gems and finished jewelry from various businesses fluidly crossing political boundaries.

Suppose a company receives an order for 300 diamond straight line bracelets. The broker must locate stones from various suppliers, each of which may have to put together parcels from many small cutters. In Surat, India, for example, where about 90 per cent (by value) of the world’s diamonds are cut, there are more than 350,000 gem cutters in 2,500 factories. There’s no way to track the movements of each small stone that makes its way into a piece of jewelry.

This could soon mean problems for insurers. For example, a diamond straight line bracelet is insured as having all natural diamonds. Later examination of the bracelet reveals that some of the stones are synthetic. And it turns out the bracelet had been cleaned. Had synthetic stones been substituted by the jeweler doing the cleaning? If so, that would be theft, and would be covered under the Homeowner’s/jewelry policy. But perhaps the synthetic diamonds were there to begin with. Neither the consumer nor the insurer would know. Nor, in all likelihood, would the retailer, and so on up the selling chain.

As we’ve discussed in previous issues, some diamond-growing labs are honest companies, advertising their products as alternatives to natural diamond and pricing their goods accordingly. The problem is the proliferation of synthetic diamond producers and dishonest gem dealers using the anonymity of the market routes to mingle synthetic with natural diamond and make a killing.

3. Certified??

Was this certificate done for this diamond?

Rapaport, a respected publication in the gem industry, reports a more brazen, and far more insidious, scam: companies that buy GIA grading reports originally done for natural diamonds, and then have synthetic diamonds cut to match the reports. Rapaport said that in some cases the synthetic stones are even laser-inscribed with the GIA logo and report number.

This is particularly devious because the buyer who checks the report number on the GIA website will find everything a match—carat weight, color, clarity, etc. GIA is a trusted lab, so the buyer is reassured about the quality of her purchase. There would be no reason to second-guess a GIA report.  

Detection & disclosure

We usually have easy-to-follow recommendations for insurers to avoid being victimized by fraud. However, the technology of diamond synthesis is advancing so quickly that detection of synthetics has a hard time catching up, and reasonable priced equipment simply doesn’t yet exist for today’s appraisers.

Curtailing fraud depends on disclosure all along the trading chain—laboratory, distributor, jewelry manufacturer, retailer, appraiser, consumer.  And disclosure often depends on the ability to distinguish synthetic diamonds from naturals.

Our next issue will discuss both these issues, including new tools for detecting synthetic diamonds, a renewed focus on ethics of disclosure in the gem industry, and steps insurers can take to avoid being taken in.


There is no easy solution to the problem of synthetic diamonds being sold as natural. More research and better tools are needed.

For now, the insurer’s best protection against fraud is a detailed appraisal from a trained gemologist appraiser.

For all quality jewelry, request a JISO 78/79 appraisal that gives a detailed description of the jewelry, both stones and setting, and gives a valuation.  This appraisal is prepared by a trained gemologist (GG, FGA+, or equivalent), preferably one who has additional training in appraising for insurance. One course offering such training is the Certified Insurance Appraiser™ course.

Despite the scam involving fraudulent GIA certificates, a diamond report from a reliable lab is still good practice. We recommend the following highly respected labs and suggest that you use these links to verify reports you receive.

GIA Report Check
AGS Report Verification
GCAL Certificate Search

If you have any reason to suspect a diamond report is bogus, it may be worthwhile to consult a jewelry insurance expert.



With diamonds, the price difference between natural and synthetic is far greater than with most other stones. Mistaking a synthetic diamond for a natural could mean an overpayment of tens of thousands of dollars.

This is where the sales receipt becomes important. If there is a huge difference between the purchase price and the appraisal valuation, it’s a good bet that the gem is not natural diamond but a stone of lesser value—synthetic diamond, moissanite or even CZ, cubic zirconia.

The diamond industry is struggling to develop dependable and cost-effective solutions for detecting synthetics. For larger diamonds that are damaged, it is practical to send them to a large lab such as GIA, which has the latest equipment for identifying gems.

Read carefully all documents on file. Do not assume that a gem is natural unless that is specifically stated on the appraisal.

Comb the documents for words meaning synthetic, such as created, grown, lab-made, man-made, lab-grown, and cultured diamond.

Always have the damaged jewelry examined in a gem lab by a trained gemologist (GG, FGA+, or equivalent), preferably one who has additional training in appraising for insurance. One course offering such training is the Certified Insurance Appraiser™ course. 


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