Jeweler/Appraiser Credentials
Who can call himself a jeweler?
Who can call herself an appraiser?
Yes, these are trick questions.
The answer to both of them is: Anyone.
There is no federal or independent body setting qualifications for who may be a jeweler or a jewelry appraiser. Though these may sound like impressive titles, backed by study and expertise, literally anyone can hang out a shingle as a jeweler or an appraiser.
Most jewelry retailers are not even Graduate Gemologists, which means they have not pursued a six-month trade school degree that can be taken either on site or as a home study course. The course insures that the jeweler has a basic knowledge of gems and jewelry evaluation and that he is able to perform the relevant lab testing. A JCRS study of appraisals from 21 insurance companies found that only 21% of them were prepared by graduate gemologists.
Some retailers without a GG degree have learned their business on the job, but others are not even familiar with basic jewelry terminology or grading systems. Most jewelry retailers do not have a gem lab, with instruments to properly examine a stone and determine its quality. They must either rely on the word of their suppliers or simply guess. In one TV expose in London, 9 out of 10 jewelry retailers misidentified moissanite, a diamond simulant, as genuine diamond.
This lack of knowledge shows up in many insurance "appraisals," written on fancy letterhead but with no content.
One gold and diamond ring, value $2,000.
If that line looks familiar, it's not surprising--jewelers write thousands of appraisals like that every year. But such a document is useless for adjudicating a loss claim.
Even jewelers with sufficient gemological training prepare inadequate appraisals because they don't understand how the appraisal is used. Only Certified Insurance Appraisers™ (CIA™) are trained in looking at the appraisal from the insurer's perspective (see the back of the ACORD form 78/79). They understand how jewelry is insured and their appraisals include all information the insurer needs.
FOR AGENTS & UNDERWRITING
Recommend that policyholders obtain appraisals on the ACORD 78/79 forms. These appraisals are in a standardized format, making it is easy for underwriters to determine that all necessary information is included. ACORD 78/79 appraisals must be completed by an appraiser who is a Graduate Gemologist and a Certified Insurance Appraiser™. Explain to policyholders that the appraisal benefits them because it gives realistic values and it describes their jewelry in detail so the jewelry can be replaced if it is damaged or stolen.
FOR CLAIMS
If there aren't enough Certified Insurance Appraisers™ around, it's because jewelers haven't considered the training important enough. Working with a CIA™makes the insurer's job easier because all the claim information is right there on the appraisal. Ask jewelers you deal with: "Are you a CIA™?" Make it known that you are willing to refer business to CIA™s who write ACORD appraisals. Let your referrals be their incentive to get the CIA™ training.
CIA Corner
From Brandt Scholz, CIA™:
Often when I'm asked to write an appraisal for insurance, I have the opportunity to look over the appraisal that came with the jewelry purchase. It frequently turns out that these appraisals were written by retailers with no credentials other than having bought and sold jewelry. In one case, a customer brought in a ring described in her appraisal as "a 2-carat round diamond set in an engagement ring, very nice, good cut, good quality, very good color." The price was given as $15,000.
When I looked at the stone, I laughed. My idea of "very good" color was about four grades away. The customer was, of course, shocked when I told her she could buy a ring like this for $10,000. When I asked her what she thought "good cut" or "very good color" meant, she said she had no idea. I took the opportunity to explain these and other jewelry terms. I showed her the appraisal I had written and discussed the importance of the detailed description for insuring jewelry. She was so pleased with the information, and my willingness to discuss jewelry qualities, that I won her over as a customer.
Brandt Scholz
North Carolina Gemological & Appraisal
c/o Whitehall Jewelers
Hanes Mall
Winston-Salem NC 27103
336.760-1119
Brandt Scholz, who is both and goldsmith and a gemologist, has been in the jewelry business for 25 years.
NEWSFLASH UPDATE
Fake Jewelry From a Florida Jeweler
The January IM NEWS reported on a scam in Florida involving fake jewelry. Jeweler John Hasson was charged with fraud, obstruction of justice and money laundering. After a seven-week trial in Miami federal court, he was found guilty on six counts and faces 22-30 years in prison.
Hasson impressed and victimized numerous wealthy clients. He sold to pro golfer Greg Norman a custom-made diamond pin in the shape of his company's shark logo. When Norman had the piece independently appraised, he found that the pin he'd purchased for more than $48,000 was worth only $7,000.
In another scam, Hasson had his store manager's brother pose as a sheik and hired women to pose as a harem to impress millionaire Aben Johnson with his supposed connections to the Sultan of Brunci. A civil suit by Johnson claims he lost $60 million on purchases from Hasson.
Hasson created fantastic tales of historically prominent gems, while selling fakes, treated stones, or very poor quality gems. According to the FBI, this is the largest case of fraud involving gems and jewelry in US history.
Note that many of his victims were vacationing or conducting business in Florida and would insure their jewelry elsewhere. It would be worthwhile to check your files for appraisals written by John Hasson, his co-defendant Clifford Sloan, or his assistant Jimmy Speiser.
Certificates for Synthetic Diamonds
A major New York City gem lab has begun specifying natural or synthetic origin for gems it certifies. (The prominent Gemological Institute of America still refuses to grade or certify synthetic gems.) This initiative is in part a response to requests from companies that manufacture synthetic stones. They want to be able to offer customers the certificates.
See the February issue of IM NEWS for a discussion
of synthetic gems.
©2003, JCRS Inland Marine Solutions, Inc. All Rights Reserved. www.jcrs.com
Subscribe to Jewelry Insurance Isssues
For Insurance professionals: 8 hours CE credit. Jewelry insurance is the key to cross-selling opportunities to commercial insurance. Learn how to improve loss ratios and take advantage of value-add services for your agency.