March 2018

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 the diamonds you’re insuring real?

You’ve heard of fake news. How about fake diamonds?

Or the slippery slope of false advertising, misleading terminology, technological subterfuge, and carefully orchestrated omissions?

Fakery abounds

The National Museum of Prague recently discovered that a number of its prize gems were fakes. A 5-carat diamond turned out to be plain glass given a diamond cut. A 19-carat sapphire, believed to be worth more than a million dollars, was in fact lab-made and worth substantially less. Further examination revealed that half the museum’s rubies were lab-made.

The gems had been in the museum’s collection since the 1960s and1970s. Presumably they had been appraised by experts, so how could such a large-scale problem occur? Was it deliberate fraud from the start? Inexperienced gem appraisers? An ongoing pattern of substitution by a member of the staff? The museum may never know.

If such a value error could happen to a national museum, could it happen to an insurer?

Courtesy of Vrai & Oro

What is “real” diamond?

Obviously, the glass stone in the museum’s collection is not real diamond. But these days, the meaning of “real” diamond is itself under the scope.
There is mined diamond (sometimes called natural) and there is lab-made diamond (also called synthesized, lab-grown, created, cultured, cultivated). The two are physically, chemically and optically the same. In fact, they are distinguishable only with the aid of expensive laboratory equipment. The big difference is in the marketing—and in the market value.

Lab-made diamond retails for 20%-40% less than mined diamond. The price difference alone wins over many consumers. For the same price, an engagement ring can have a visibly larger diamond if the diamond came from a lab. Lab-mades are also promoted as a more humane and eco-friendly choice, without the baggage of blood diamonds or the devastation of mining.  These features are particularly attractive to many millennials.

The diamond mining industry worries that diamond growing will disrupt the mined diamond business. The Diamond Producers Association (DPA), formed in 2015, is a group of diamond mining companies whose declared purpose is “to maintain and enhance consumer demand for, and confidence in diamonds.”

DPA has an ad campaign promoting mined diamond as the only “real” diamond. The campaign, called “Real is Rare,” plays to the idea that only diamond from the earth is rare and has the geological gravitas to symbolize a committed relationship. But that symbolism is itself based on marketing, from the DeBeers ad campaign of the 1940s with its slogan “A diamond is forever.” DeBeers is also responsible for restricting the supply of diamond, so that diamond is perceived by the public as “rare.”

Terminology is an important part of marketing. Guidelines by the DPA state that the industry should avoid the terms 'real', 'genuine' and 'authentic' when describing man-made diamonds.

Diamond-growing labs, in turn, reject using “natural” as a synonym for mined diamond because it implies that lab-made diamonds are imitations, like CZ or moissanite. In creating diamond, the lab and the earth use the same elements of nature: carbon, high pressure and intense heat. 

Jean-Marc Lieberherr, CEO of DPA, believes a lab-grown diamond is not diamond at all. In a swaggering put-down, he said, “Just as one cannot compare an original painting to a reproduction, one cannot compare a diamond to a manufactured replica.”

Meanwhile, the labs move forward. Lab-grown gems got a big boost when Atelier Swarovski launched its first fine jewelry collection using Swarovski Created Diamonds at the 2017 Oscars. The new line is being branded as “conscious luxury” and “responsible jewelry.” 

Courtesy of Ada Diamonds

Ada Jewelry has another approach, offering the ultimate personalization in bespoke jewelry. They can process any carbon-containing item, such as a bridal bouquet or graduation keepsake, to grow a diamond in the customer’s choice of color and set it in jewelry.

Lab-grown diamond sales represent a very small segment of the diamond jewelry market. One estimate put it at 3% of the global market, but all parties expect that share to increase.
Engagement rings, the lifeblood of most jewelers’ business (and the most common jewelry that insurers cover) have shown declining sales for several years. Today, young couples may forego the symbolism of a ring.

If they do buy rings, they may opt for a lab-grown diamond, which has the same sparkle as mined diamond but for a lower cost. Then they have funds left over for, as one young woman expressed it, other things that are important to them, such as travel or electronics or buying a house.


Disclosure & Valuation

These are the two important points for insurers.

The appraisal should state whether the diamonds are mined or lab-made. Technology for synthesizing gems is now so advanced that it can be difficult to detect lab-made stones.

For diamonds of significant value, have the stone sent to GIA, which has the expensive equipment needed for identifying lab-made diamond. GIA issues separate gem reports for mined diamond and synthetic diamond.

Lab-made stones have a lower valuation than mined diamonds, so the distinction between mined and lab-made is not trivial. The appraiser must not value lab-grown diamond as though it were mined diamond.

Courtesy of Yadav Diamonds and Jewelry


A diamond appraisal should explicitly state that the stone is either mined or lab-made. Lab-grown diamond is real diamond, but its valuation is lower than for mined diamond.

Check the appraisal for all terms signifying lab-made, including synthetic, grown, man-made, lab-made, lab-grown, cultured, and created.

Gem-grading labs have received parcels with lab-grown diamonds mixed in with mined gems. How many lab-made stones have not been “caught” and are out in the marketplace being sold, and priced, as mined diamonds? The potential for overpayment on claims is enormous.

Deliberate nondisclosure by the diamond manufacturer, distributor or retailer is a danger because of the price difference between natural and lab-made diamonds.

Since synthetic diamonds are difficult to detect, improperly trained retailers and appraisers may unwittingly pass on synthetic diamonds as naturals.
In insuring colored diamond, or any diamond of high value, never assume the gem is natural (and therefore more valuable). Insist on an appraisal that states whether the stone is natural or synthetic.

Recommend that the insured get an appraisal from an independent appraiser as soon as possible after a purchase, to verify that the quality and value of the jewelry are as stated by the seller. The appraiser should be a trained gemologist (GG or FGA+), preferably one who has additional insurance appraisal training. One course offering such additional training is the Certified Insurance Appraiser™ (CIA) course of the Jewelry Insurance Appraisal Institute.


Reputable makers of lab-made diamonds want to associate their names with their products. Recognizing these names, or working with a jewelry expert who does, could save you tens of thousands of dollars on a claim.

There are, of course, disreputable gem-growers, so you cannot assume a gem is mined just because the appraisal doesn’t mention synthetic, lab-grown, etc. This is especially important for diamonds of high value.

Disclosure information can get “lost.” A customer may buy jewelry with synthetic diamonds, not understanding the meaning of a term like cultured, for example, or not appreciating the extreme difference in value between mined and grown diamond. When he becomes aware that he made a bad purchase, he may “sell” it to the insurance company through a fraudulent claim.

Jewelry with multiple gems may have mined and lab-grown stones mixed together.  Insist on an appraisal that explicitly describes each gem as mined or lab-grown.

Was the jewelry purchased on eBay (or anywhere on the internet)?  If so, be very suspicious of the stated quality and valuation. Merchandise bought online (or from other unauthorized sources) may be second-hand, may have been sold openly as a replica, or may be a complete knockoff wearing an important logo.

Is the valuation on a printed certificate/report/ID card supplied by the seller?   Disregard this valuation, as such papers function as sales tools. Try to determine value based on descriptive information and sale price.

Is it a brand name?   Look for evidence of authenticity. Some manufacturers sell only through authorized dealers.

If the appraisal does not explicitly state the gem is mined, use every means possible to determine whether it is mined or lab-grown. Be especially diligent with colored diamonds.

On a damage claim for a high-priced gem, always have the piece examined by a qualified gemologist, such as a Certified Insurance Appraiser™, to determine whether the stone is mined or lab-made (and to be sure its qualities are as stated in the appraisal).


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