Don’t Be Duped by Fracture Filling
Say a diamond has a fracture. The supplier injects some colorless substance into the crack to fill it up. The gem looks better, clearer, prettier. What’s wrong with that?
Fracture filling has been around for some time.
The treatment improves the appearance of a lower-quality stone, making it
more attractive to the naked eye and more salable. However, its value is still
that of a low-quality stone. Under a jeweler’s loupe
(10-power magnification), the original defect is visible.
Reputable jeweler/appraisers will always disclose fracture filling. But it is easy for the insurer and customer—not being jewelry experts—to not understand the lingo or to not appreciate the way this treatment affects value.
Here’s a costly example from our files
A pair of diamond stud earrings, with stones totaling 5.18 carats, were added to a policyholder’s scheduled jewelry. The earrings were appraised at $48,000. A short time later, one of the earrings was noticed missing and the owner filed a claim. The insurer paid the claim as a total loss and took the remaining earring as salvage.
JCRS received the remaining earring, along with all documentation related to the claim. It turns out that both the appraisal and the sales receipt had stated that the diamonds were “clarity enhanced.” This is a nicer-sounding phrase for fracture filling. The appraisal even said the “Yehuda method” had been used. A treatment with a brand name may sound better, but it’s still fracture filling.
Sure enough, microscopic photos of the remaining diamond revealed fractures that had been filled with a colorless resin—basically, a plastic. The red flash effect in the picture is characteristic of this treatment.
Salvage value of this remaining diamond was $1,419. The insurer had overpaid the claim by $39,286.
Fracture filling, clarity enhancement, and Yehuda clarity treatment all denote treatments done to disguise a flaw in the gem. A fracture-filled diamond is worth far less than one of similar appearance that is not treated. We don’t know whether or not the insured was aware of this, but we do know the insurer could have caught it.
Recognizing basic terms for gem treatments (or consulting with an expert who does) is an important step in avoiding costly overpayments.
FOR AGENTS & UNDERWRITING
Clarity treatments are not always disclosed. The seller may deliberately conceal fracture filling, or the appraiser may not be sufficiently trained to recognize it. (See Enhancement or Scam? for a report on jewelry retailers who did not recognize the Yehuda treatment). When insuring a gem of significant value, be sure the appraisal states any treatments OR states that the gem is untreated.
For any jewelry of high value, require a detailed descriptive appraisal, preferably on ACORD 78/79. Any settlement should be based on a description of the item, not merely on a valuation.
FOR CLAIMS
Fracture filling, clarity enhancement, and Yehuda treatment — consider these terms flashing red lights, causing you to stop and look. Other qualities being equal, an “enhanced” stone is worth far less than an untreated gem.
If one piece of a pair, or one of several stones in a setting, is lost, always have the remaining jewelry examined by a trained gemologist, such as a Certified Insurance Appraiser™, to verify quality.
Next Issue: Proper Procedure
Overpayments can be avoided by following proper procedures in insuring jewelry and settling claims. Our next issue will lay out procedures that make the whole process smoother and more efficient, while greatly lowering settlement costs.
©2004, JCRS Inland Marine Solutions, Inc. All Rights
Reserved. www.jcrs.com
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