October 2004

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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A Second Look: When to Recommend an Appraisal Update or a Second Appraisal

An appraisal update, or a second appraisal at the time the jewelry is being insured, can avoid future losses, deter scams, save settlement costs and ultimately increase policyholder satisfaction.

Last issue we discussed the importance of regularly updating an appraisal to check valuation against the current market. Prices of gems and precious metals can fluctuate, and the jewelry’s insured valuation should reflect its current market value.

Accurate valuations, complete descriptions, or even just having the jewelry inspected, can have other advantages that aren’t immediately obvious. Here are some circumstances where a second look is of value.

Accident Waiting to Happen

The most basic reason to have scheduled jewelry examined every few years is to check for conditions that might lead to a loss. A jeweler can look for and correct such things as a faulty clasp or a stone loose in its setting. The selling jeweler will often perform such an exam free of charge, as a service to the customer. Preventative maintenance ought to be encouraged, since it is in the interest of the policyholder as well as the insurer.

Treatment Breakdown

Many gems undergo treatments, or “clarity enhancements,” to make them look more attractive. Some treatments break down over time, making the stone appear to be damaged. Treatment breakdown is not damage for which the insurer is liable.

An appraisal should always list any treatments, such as laser-drilling and fracture-filling (Yehuda treatment), not “usually” done to that gem type, as defined by the Gemstone Enhancement Manual. If no such treatments have been done, the appraisal should state that the stone is untreated. Some untreated gems are worth more than treated gems of similar appearance. For example, an untreated Burma ruby is 100 times more valuable than a treated stone.

If treatment information is lacking, the insurer should urge the owner to have the piece appraised by another jeweler — preferably by a Certified Insurance Appraiser™ on an ACORD 78/79 appraisal form.

Inherent Vice

A stone with an abundance of fractures or inclusions of non-gem material is inherently weak. A heavily included emerald, for example, is likely to break easily. Laser drilling and fracture filling may improve the stone’s apparent clarity by disguising flaws, but they do not improve the quality of the stone or its value.

A stone is also more susceptible to breakage if it is poorly cut, having a girdle that is “very thin” or “extremely thin.” Most appraisals do not include complete cutting information. Use ACORD 18, Jewelry Appraisal and Claim Evaluation Form, to check for complete cut details.

If the appraisal lacks detailed information on cut and clarity, ask for an appraisal on ACORD 78/79 or ACORD 805, Sales Receipt for Insurance Purposes.

Wear and Tear

Many people assume jewelry that is reasonably well cared for will retain its value, since gems are so sturdy. However, many gems are subject to wear and tear. Coral, opal, pearl, lapis lazuli, etc., are soft and can be easily scratched, causing them to lose value. Diamond, which is the hardest mineral (meaning it can’t be scratched by other minerals), is actually quite brittle and can chip easily. Jewelry with such gems should be regularly examined for wear and tear.

Damage During Cleaning or Resetting

Many gems can be damaged from improper cleaning, such as by boiling, chemicals or ultrasound. Others can easily be damaged during resetting or can even crack under pressure from a poorly designed mounting. An appraisal from a disinterested appraiser would note if the setting were inappropriate or dangerous for the stone. The insurer is not liable for damage caused by improper setting or cleaning.

Appraisal Provided by Seller

An appraisal provided by the seller should not be considered a sufficient basis for insuring jewelry valued at more than $20,000. This advice applies whether the appraisal was written by the seller or bears the name of another appraiser or lab; if the customer received it from the seller, it is questionable. Many retailers supply appraisals that inflate valuations far above the selling price to make customers feel they are getting a bargain. Some retailers offer “certificates” as evidence of the gem’s value, but these documents can come from unreliable labs. (“Bogus Appraisals & Fraud” has more about the dangers of relying on retailer-supplied documents.)

For high-quality jewelry, verify the valuation and descriptive details by getting a second appraisal, submitted on ACORD 78/79 and prepared by a Certified Insurance Appraiser™.

Incomplete Details on Appraisal

If the only available appraisal is not on the ACORD 78/79 form, use ACORD 18, Jewelry Appraisal and Claim Evaluation Form, to score the appraisal, verifying that all necessary details are included. If not, a more detailed appraisal is required.

ACORD 18 provides the agent with a substantial value-added service. It can be used to communicate to the policyholder in a non-threatening way that important information is missing from an appraisal, without challenging the authority of the jeweler. The client will respect the agent’s efforts to protect his/her interests and will be motivated to get another appraisal.

Claim on Damaged Jewelry

Before settling a claim on damaged jewelry, always have the jewelry inspected by a gemologist who was not the seller and is not a replacement source (both of whom stand to gain by recommending replacement rather than repair). Hire a disinterested expert and expect to pay for his services.

The examining gemologist should give a detailed description of the piece (which you can compare with the appraisal on file). He will determine:

Overpayment on damaged jewelry claims is quite common, often because insurers take the word of the selling jeweler or a replacement service. Always seek the opinion of an impartial jeweler/appraiser, preferably a graduate gemologist who is also a Certified Insurance Appraiser™.


For scheduled jewelry, insist on detailed descriptive appraisals. Recommend an ACORD 78/79 appraisal, which guarantees in writing that the jewelry is as it is represented. It is prepared by a Certified Insurance Appraiser™, who takes responsibility for the accuracy of his work.


Always have damaged jewelry examined by an impartial jeweler, who should supply you with a detailed description of the jewelry, an estimation of the cost to repair, and its valuation. Use this information as a basis for your decision to repair or replace.

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