August 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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Laser Drilling of Diamonds

Q. When is a gem treatment not a treatment?
A. When it's a process.

Q. Is laser drilling of diamonds a treatment or a process?
A. Depends on whom you ask.

Q. Does the answer matter?

It matters because the real question here is: Is it necessary to disclose laser drilling to the customer and to the insurer? You already know the answer to that one is Yes.

Here's why.

The value of a diamond is partially based on its clarity. If a gem has an inclusion (usually of some other gem material), light hitting the inclusion reacts differently and shows up the imperfection.

Laser drilling makes a microscopic channel from the outside of the stone to the imperfection. An acid is then injected to bleach the foreign material and make it less visible. To the unaided eye — or even to an inexperienced viewer with a jeweler's loupe — the stone may appear to be of high quality, but under a microscope the drill holes are obvious.

Laser drilling is controversial even within the jewelry industry. While most ethical jewelers agree that gem treatments should be disclosed, there is disagreement over whether drilling is a treatment. Diamond cutters and dealers say that drilling is an integral part of the manufacturing process and should be considered no different from, for example, faceting or shaping the stone. Unlike fracture filling (discussed in the April issue of IM NEWS), which actually fills a fracture with a foreign material, laser drilling does not add anything to the stone. Dealers say it is merely a process that improves the gem's appearance.

The FTC was persuaded by dealers' arguments that since all diamonds are put through an acid wash for external cleaning, acid injection is no different. And since lasers are used to cut gems, laser drilling is no different. Even the Gemological Institute of America, which sets grading standards around the world, seems to support this view. The GIA does not grade gems it classifies as "treated," but it does grade laser-drilled diamonds. Retailers are appealing the FTC decision because they do not want to pay as much for laser-drilled stones as for undrilled ones. The retailers want the FTC decision amended to say that laser drilling must be disclosed.

As it is, many jewelers refuse to carry diamonds that have been laser drilled, because they consider lasering to be a treatment done to conceal a flaw. They point out that unless the drilling is disclosed all through the selling chain, the consumer may wind up paying very unfair prices. Many jewelers who do sell laser-drilled stones are against mandatory disclosure because they fear customers will think they are buying an inferior gem (which they are). They prefer to just sell a beautiful-looking stone (beautiful to the naked eye) and remain silent about how it got that way.


A drilled stone is worth less than an undrilled gem with the same appearance, so disclosure is crucial. However, not all retailers have the lab equipment and training necessary to detect laser drilling, not all retailers believe they need to disclose lasering, and some may not even know that what they're selling are laser-drilled stones. Your best move is to insist on an ACORD >78/79 appraisal. Since laser drilling is not one of the treatments usually or always used on diamonds, Certified Insurance Appraisers™ believe it must be disclosed. The CIA™ who prepares an ACORD appraisal warrants that the jewelry has been examined in a gem lab and that the appraisal contains full disclosure of treatments.


For a claim on a damaged diamond, have the stone examined by a CIA™ in a gem lab. If the original stone was laser drilled, it can be replaced with a laser-drilled diamond, thus reducing loss costs.

By the same token, if you are ordering a replacement for an undrilled diamond, require the jeweler to guarantee that the replacement stone you are given has not been laser drilled and to include a full description of the gem's qualities and proportions.

CIA™ Corner

From Steve Dagle, CIA™

When a customer brings in a diamond for work to be done, perhaps resetting it, we always plot the diamond — prepare a map of the stone, showing any inclusions, cloudiness, or other unusual features. Since these features uniquely identify the diamond, this procedure protects both the customer and us. When our examination reveals drill holes, it usually turns out that the customer was not aware the stone had been laser drilled. Currently, the FTC does not require disclosure of laser drilling, so sellers are not obligated to tell, but I believe the customer should be informed.

We sometimes carry laser-drilled diamonds in the store, to show what's available. Usually, after we explain what laser drilling is and why it is done, the customer isn't interested in buying such a stone.

John Dagle Jewelers
352 Market Street
Sunbury PA 17801


A Diploma Is Not a Credential

The Gemological Institute of America now offers a training program for jewelers leading to an Accredited Jewelry Professional (AJP) diploma. You may begin seeing the letters AJP after an appraiser's name. Do not assume that this title represents gemological knowledge or appraisal expertise. As stated in the GIA's own advertising, this course is designed to help sales associates improve their retail knowledge and sales presentation.

The issue of jeweler/appraiser qualifications is discussed in the March IM NEWS. As we pointed out there, a jeweler who is a Certified Insurance Appraiser™ (CIA™) best serves the needs of both insurers and policyholders.


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