July 2008

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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Sapphire—Gem Superstar

Last year a 22.66 carat Kashmir sapphire sold at Christie's for a world record price of $3,064,000. That's $135,000 per carat! One expert said the occasion marked the ascension of Kashmir sapphires into the pantheon of superstar gemstones.

Star Sapphires
Click to enlarge

Star sapphire is one of the most
striking gems.
The ring with a star sapphire surrounded by diamonds retails for $4,500.
The ring on the right, with a star sapphire accented by sapphires and diamonds,
sells for $6,800

High esteem for sapphire isn't new. The ancient Persians believed that the earth rested on a giant sapphire and its reflection colored the sky. The British Crown Jewels are full of large blue sapphires, emblematic of pure and wise rulers.

A humble combination of aluminum and oxygen make up the gem species corundum, and traces of other minerals impart an almost infinite range of colors. When the color of the corundum is red, jewelers call the gem Ruby; any other color they call Sapphire. Though we usually think of sapphires as blue, they also come in greens, yellows, pinks, purples, and even white (colorless).

Orange Sapphire
Click to enlarge

These striking gems
are natural sapphire.
The 1.33 ct . emerald cut stone
is valued at $1,000,
and the 1.47 ct. pear cut at $1,500.

Location, Location, Location

Sapphires are mined in countries as far apart as Colombia, Australia, Nigeria, and the U.S. In some cases, provenance has a crucial effect on the gem's value.

Stones from Kashmir, Burma, and Sri Lanka (Ceylon) fetch some of the highest prices because of their superior clarity, hue and saturation. Kashmir was heavily mined during a brief period in the late 1800's, after an earthquake-induced landslide revealed the sapphire find. The region was soon fully depleted and is no longer a major source of sapphire, but non-heated sapphires from Kashmir still command the highest prices. Today Kashmir sapphires are mostly found in high-end retail and resale markets, such as at auctions.

Click to enlarge

Some sapphires have the
cunning ability to change color
depending on light conditions.
The left picture shows the gem under fluorescent light,
the right shows the same sapphire
under incandescent light.
The stone, even outside a setting,
is valued at $8,000.

Inclusions of foreign material help gemologists determine the gem's origin. Gemologists describe the inclusions in sapphire with terms such as crystals, needles, halos, silk, and fingerprints. Silk, fine fibers of other minerals that have the look of silk, is a preferred inclusion because it signals that the sapphire is natural and has not undergone heat treatment.

Note: You can verify a sapphire's origin through the labs at American Gem Trade Association (AGTA).

Note: Provenance alone does not determine a sapphire's value. Be sure to get an appraisal that details the quality of the gem.


Sapphires are usually heat-treated to enhance the gem's color and clarity. Heating should be mentioned on the appraisal, but even if no mention is made, it is assumed sapphire has been heat-treated unless otherwise specified. This treatment is permanent and will not degrade over time.

Note: Other treatments, such as fracture filling, oiling, dyeing or waxing, are not considered permanent and they lower the value of the gem. They should be mentioned on the appraisal.


Corundum (sapphire or ruby) was the first gemstone to be produced by artificial means, using the Verneuil Process invented in 1902. This process has been replaced by newer technologies, and synthetic gem-quality blue sapphire is now widely available.

A gemologist can detect the difference between natural and synthetic sapphire by observing the growth lines and the characteristic inclusions. Synthetic, or lab-grown, sapphire should be so described on the appraisal.

Note: Not every jeweler is competent to appraise and value colored stones. A retailer without the appropriate gemological training or gem lab may not even recognize synthetic sapphire or the color or clarity enhancements.

Scam:  The Great Beryllium Bake Sale

Sapphire owes its many colors to trace elements in the corundum which cause color or modify the strength of a color. Researchers found that heating corundum along with beryllium also affects color, in effect adding another trace element.

In 2001 the gem market was flooded with padparadscha look-alike sapphires created by the use of beryllium diffusion. Padparadscha is a rare and very valuable sapphire with delicate orange-to-pink coloring. It is mined in Sri Lanka and takes its name from the local word for the lotus flower. Dealers were taken in by the beryllium-treated stones, and much of the bogus padparadscha no doubt made its way into the marketplace.

Note: Natural padparadscha sapphire is extremely rare and very valuable. Insist on a grading report from a reliable lab (such as AGTA) to be sure padparadscha is not color-treated.

Gem treaters continue to use beryllium to produce orange-pink, golden yellow and even blue sapphires. Color treatment is an easy way to pump up the price of  low-quality corundum.  Those doing the sapphire treatment know that for dealers—not to mention consumers—the cost of testing smaller stones for evidence of beryllium is so great as to be prohibitive.

In retail sales, most of these treated sapphires are not being disclosed for what they are. Jewelry Television, for example, uses the term "bulk diffusion", which hardly explains anything to a lay person. As John Emmett of Crystal Chemistry puts it, "Diffusion is a form of dyeing plain and simple."

Note:  Beryllium-diffused sapphire (natural or synthetic) is less valuable that untreated sapphire of similar appearance. Be sure the appraiser has the training, experience and gem lab needed to identify sapphire treatments.

Scam:  Thai Turn-a-Profit Sapphires

One of the most pervasive and long-lived gem scams is aimed at visitors to Thailand. Typically, a tourist is told by his driver that the attraction he wants to visit is temporarily closed and offers to take him to a "government shop" where he can buy blue sapphires to sell back home for twice as much. The seller may well offer a full refund if the buyer isn't satisfied, and may even put an official-looking stamp on the receipt.

However: the sapphires turn out to be overpriced stones of poor quality. And: the buyer cannot get a refund. Often the shop has gone out of business, though the owner may continue doing the same kind of transactions in the same location under a different business name. This scam has been going on for years.

Note:  Vacationers are an easy mark for gem scams. Be wary of insuring gems or jewelry bought on holiday in tourist areas. Insist on detailed and reliable JISO 78/79 appraisals.


High-value Kashmir, Burma and Ceylon rubies and sapphires should be accompanied by a report from a reliable lab (such as  AGTA, AGL or Gübelin) verifying origin. (The insured can take the jewelry to his own jeweler, who will send it to a lab that has the equipment and expertise to determine gem origin.)

For sapphires and other colored stones, color is the main determinant of value. The appraisal should describe the gem's color in terms of tone, saturation and hue. A vague description, such as "blue sapphire," is useless.

Synthetic sapphires are quite common. The appraisal should state that the gem is either natural or synthetic, since synthetic gems are worth considerably less than natural.

For sapphires, it is essential that the appraisal be written by a gemologist experienced with colored stones and familiar with the current pricing, treatments and frauds. Most jewelers deal primarily with diamonds, and even a trained gemologist may have little experience with colored stones.

For sapphire, all treatments other than heating should be disclosed on the appraisal. (Heat treatment may also be listed, but sapphire is assumed to be heat-treated unless the appraisal specifies it has not been.) A trained gemologist will be able to identify treatments that should be disclosed.

If a gem is not treated, that should be specifically stated on the appraisal. A treated stone has only a fraction of the value of an untreated gem of similar appearance.

A reminder: As discussed in the May 2002 issue, the reliability of a colored stone certificate depends on the lab that issues it. If you are insuring a sapphire accompanied by a certificate, it would be worthwhile to review the May 2002 issue. In any case, a certificate is not a substitute for an appraisal. Certificates describe only the gem, not the jewelry, and they do not give valuation.


Synthetic sapphires are worth much less than natural. Check the appraisal for words such as synthetic, lab-grown, cultured or manufactured.  The term "Lindy" or "Linde" describes a star sapphire that is synthetic.

Always have damaged stones examined by a gemologist (who is not the selling jeweler) before settling a claim. For sapphires (and all colored gems), be sure to consult a jeweler who regularly deals with colored gemstones. The jeweler should be a graduate gemologist and preferably also a Certified Insurance Appraiser™.

While there are fewer claims on colored stones than on diamonds, colored stones usually have much higher markups and generally have inflated valuations. A typical one-carat sapphire, for example, has a replacement cost of $200-$300.

Since beryllium-diffused sapphires have permeated the marketplace, look for mention of this treatment (sometimes called "bulk diffusion") on the appraisal. Do not assume that if the appraisal doesn't mention treatments, the gem must be untreated; most likely, if treatment (or lack of it) is not mentioned, other information is incomplete as well.

For claims on damaged stones, always have high-priced jewelry inspected by a reliable appraiser to determine whether the gems have been treated. Treatments such as fracture filling may break down, causing changes in the stone that are not damage for which the insurer is liable.


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