July 2000

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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If You Don't Ask, They Don't Tell

"My most lasting impression is how hard jewelers make shoppers work to obtain information about jewelry."

The quote is from the editor of a prominent jewelry trade magazine, writing to his readers — jewelers.

Most insurers would readily agree with the editor's observation. They see the lack of information in appraisals every day.

WHAT don't jewelers tell?

JCRS studied jewelry appraisals submitted to 21 insurance companies in 16 states. The study found that most appraisals didn't give enough information to distinguish one piece of jewelry from another, much less to arrive at a valuation or price a replacement.

The 4 Cs. With diamonds, the 4 Cs — Carat weight, Color, Clarity and Cut — are all necessary to determine value. Yet clarity grade appeared on 64% of the appraisals studied, color on 61%, and even something so basic as carat weight appeared on only 57%. A mere 1% of the appraisals bothered to mention cut, the single attribute that most affects the diamond's quality and price.

Color & Clarity. The emerald on the left is valued at $40,000,
the one on the right at $3,000. Color and clarity must be disclosed.

Color. For colored gemstones, the color — expressed as saturation, tone and hue — is the most important determinant of value. All three qualities are needed to accurately represent the color. For example, a ruby might be described as "vivid (saturation) dark (tone) purplish red (hue)" rather than simply as "red." On the appraisals studied, only 49% gave hue, 32% gave tone, and just 5% gave saturation.

Laser-drilling Treatment. Though it appears as only a speck from the top of the stone, the line is actually a laser drill hole made to remove unattractive inclusions. Such holes weaken the stone and significantly lower its valuation.

Gem Treatments. Many gem treatments are done to conceal defects in a lower quality stone, making it more pleasing to the naked eye. So it's not surprising that, since very basic information is often left out, gem treatments are even less likely to be covered. Treatments such as fracture filling and clarity enhancement must be disclosed by the seller, since they cannot be recognized by the jewelry purchaser or, in the event of a claim, by the insurer. Also, such treatments can break down, revealing the original low-quality stone. If the treatment is not mentioned on the appraisal, the breakdown could be interpreted as "damage" and the insurer would be liable. An appraisal that neglects to mention such treatments is actually cheating the consumer and the insurer.

Fracture-filling Treatment. The filled fracture is not visible to the naked eye but is very apparent under the microscope. This is not “damage” for which the insurer is liable.

WHY don't jewelers tell?

Underwriters and agents don't necessarily know how jewelry is valued — that is, what information should be on an appraisa l— but a trained jeweler does. If crucial information is left off an appraisal, it is because the jeweler


How do you know whether an appraisal submitted by a policyholder has the necessary information? If the appraisal is on the ACORD >78 or 79 form, it is complete. The appraiser who uses and signs this form certifies that he or she is a graduate gemologist of the Gemological Institute of America and has successfully completed formal classroom insurance appraisal training in jewelry. The appraiser warrants that the jewelry has been examined in a gem lab, that all qualities are as stated, and that treatments not part of the normal handling of such a stone are stated on the appraisal. The valuation is an estimate of the current replacement cost at the appraiser's store.

The ACORD appraisal is your assurance that the valuation is not inflated, and that there is sufficient information to price a replacement if a claim should ever be made. It explicitly states that the appraisal is being provided to both the customer and the insurer. Above the appraiser's signature, the ACORD >78/79 does not carry the common disclaimer that the jeweler assumes "no liability or responsibility" for the appraisal. This means the appraiser is a professional who takes legal responsibility for his work.

If the policyholder's appraisal is not on an ACORD form, and if it is obviously inadequate (for example, if the total appraisal is "Lady's gold and diamond ring, $2000"), insist on one that is more complete. Recommend that the policyholder get an appraisal by a Certified Insurance Appraiser™, a gemologist who is also trained in appraising for insurance. Explain to the policyholder how a detailed appraisal is to her benefit: it is a record of what exactly she owns and, in the event of damage or loss, it assures that her replacement will match the quality of the original.


Ideally, the claim you are settling comes with an ACORD >78/79 appraisal. You then have all the information you need and can go about your business of getting the best price on a replacement.

But what if you are faced with a non-ACORD appraisal? Check its completeness using ACORD >18, the Jewelry Underwriting and Claim Evaluation form. The purpose of this form is to analyze appraisals for necessary descriptive content. It allows you to put information from a "narrative" appraisal into an easy-to-follow format. You can see on the form what information is required for each type of jewelry. This is the information you'll use when talking to a jeweler about a replacement.

If crucial information is missing from your description, the replacement jeweler will have to guess, and the quality of the replacement may not measure up to the original.

The ACORD >78/79 appraisal warrants that unusual or deceptive gem treatments are explicitly stated and that synthetic gems are specified, but other appraisals may simply not mention them. Yet this is crucial information. Some treatments can drastically lower the value of a gem, and synthetics are generally worth less than natural stones. See the February and April issues for hints on tracking down synthetics and gem treatments.

Check the January issue for tips on how to proceed if ACORD >18 reveals that your appraisal is inadequate.

CIA™ Corner

In most issues of IM NEWS, this space relays a professional experience by a Certified Insurance Appraiser™. These stories give glimpses into the jewelry industry and show how widespread are the problems caused by lack of information about jewelry, whether through inadequate training, nondisclosure or deliberate deceit. Like consumers, insurers need jeweler/appraisers they can trust.

Certified Insurance Appraisers™ are generally the only jeweler/appraisers using ACORD >78/79. To date, only CIA™ jewelers are trained in understanding the insurance company's needs and way of doing business.

"The ACORD form isn't a magic bullet but it carries the legal language that puts the insurer in a first party position to recover for errors and omissions by the appraiser," says David W. Hendry, Jr., President and CEO of JCRS. "These CIAs™ understand that to clean up the industry takes responsibility for one's work and standardizing the content of appraisals."

©2000-2018, JCRS Inland Marine Solutions, Inc. All Rights Reserved. www.jcrs.com

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