June 2011

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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Preserving the Diamond Dream

The engagement ring epitomizes the “Diamond Dream.”  Some clever marketing went into creating that dream, serious energy is spent preserving it, a lot of jobs and some big chunks of the world’s economy depend upon it.

What’s so special about diamond? It’s the hardest natural substance on earth. A well-cut diamond scintillates, breaking light into a rainbow of colors. It is expensive, beautiful, and regarded as inherently valuable. But none of those attributes accounts for diamond’s privileged position in the jewelry marketplace. The main reason people buy diamond is for its emotional symbolism.

Diamond is associated with status and wealth. In engagement and wedding rings it represents the couple’s aspirations and dreams. Their love, like the diamond, is strong and enduring. After all, a diamond is forever.

But wait: a diamond has been forever only since 1948, when a copywriter came up with the line. In a triumph of marketing, De Beers turned this advertising slogan into a cultural truism, to the great benefit of the diamond industry as a whole.

Diamonds were quite rare until the late 19th century, when large quantities of diamond were discovered in South Africa. Suddenly the market was flooded with diamonds. In an effort to prevent the devaluation of diamond likely to result from this excess, investors in the diamond mines merged their interests by forming De Beers Consolidated Mines, Ltd.


Click to enlarge

Over the next century De Beers pretty much cornered the market on diamonds, owning the major diamond mines and strictly controlling the amount of diamond available for sale, the buyers who could obtain it, and the wholesale prices they would pay. Controlling the rarity of diamond worked to keep retail prices high.

The De Beers cartel controlled not only the supply of diamonds, but also the demand. Its slogan “A diamond is forever” made diamonds an inseparable part of courtship and marriage. Diamonds were marketed as expressions of love. Advertising aimed to make the diamond engagement ring “a psychological necessity.” The strategy involved newspaper pictures of celebrities wearing diamonds, fashion designers on radio programs talking about “the trend toward diamonds,” and even lectures to high school students around the country on the subject of diamond engagement rings.

In 1938, some three quarters of De Beer's worldwide diamond supply were sold for engagement rings in the United States. The success of the advertising campaign was remarkable, especially since it did not involve a brand name. The focus was just diamond.

In the late1960s, De Beers turned its advertising efforts international and they were wildly successful in Japan. Until then, Japanese parents arranged their children’s marriages; there was no tradition of romance, courtship, or prenuptial love, and certainly no requirement of an engagement ring. De Beers diamond ads featured Western-looking people in European clothes, driving imported cars, engaging in sports. Diamonds represented status and a step into the modern world.

In 1967 fewer than 5 percent of engaged Japanese women received a diamond ring. By 1978, half of all Japanese brides wore a diamond. Japan became the second largest market, after the U. S., for the sale of diamond engagement rings.

Today, the fastest-growing markets for diamond jewelry—and the diamond dream—are India and China. Chinese are coming to associate diamonds with marriage and romance, and are buying the equivalent of engagement rings. As in the U.S., large chain stores in China offer diamond jewelry at a wide range of prices.

In India, the diamond-buying motivation is less romantic and more from a sense of modernity and elegance. In a culture with a long tradition of decorative jewelry, that jewelry now includes small diamonds. The trend is aided by the fact that India is a major center for diamond cutting. China and Japan now account for about 20% of the world diamond market.

Uniqueness & Value /
The question of commodity

An important ingredient in the diamond dream is the sense that each diamond is unique. Manufacturers and retailers foster this belief because it has a strong emotional pull. This is especially so for bridal jewelry. Each consumer can find the diamond uniquely for her. Brand name sellers have a part in this, as well. De Beers now has its own brand, Forevermark diamonds, playing on its popular slogan.

Gemologists know that diamonds are described by their 4 Cs (cut, color, clarity and carat weight). Insurers are—or should be—aware that, with a detailed appraisal and diamond report, any damaged or lost diamond can be replaced. (Extremely rare diamonds are the exception, but the Hope Diamond will not be crossing most agents’ desks.)

Marketing has also fostered a sense that diamonds hold their value. This is part of what forever means—the stone itself will not deteriorate and its value will not diminish. (Both senses of forever make the gem work well as a symbol for love.) Yet, though the price of diamond tends to rise over time, diamonds do not work well as an investment. Unlike gold, they can’t easily be turned back into cash.

A consumer who buys a diamond at retail prices will not necessarily be able to turn around and sell it for as much or more than he paid. A high-quality, well-cut diamond may hold its price in a stable economy, but in today’s economy purchasers tend to buy less expensive jewelry with smaller stones. Most engagement rings are in the $5,000-$10,000 range, rather than the $20,000-$30,000 range of several years ago.

People in the gem industry don’t like to think of diamonds as a commodity, but diamond jewelry is in competition with other big-money items. Anyone who can afford jewelry can afford other things. Stephen Lussier, executive director of De Beers, notes that travel “competes in the same emotive space as diamonds.” Brand-name luxury goods and clothing compete on the level of personal adornment.

Among Generation Y folks, the main draw from their wallets is the latest technology. Young people live in a fast-paced digital world. Competing with an iPad for attention and purchase is a major challenge for the gem and jewelry industry. One step is a new iPad ap that allows you to see yourself wearing a piece of jewelry without having to enter a brick-and-mortal store. Whatever it takes. As Lussier put it, “We must make sure that each generation comes on board and buys into the diamond dream.”


As diamonds become increasingly popular, insurers must be extremely careful. A reliable appraisal is vital, as the valuation for natural diamonds is far higher than for enhanced diamonds or synthesized stones.

It is best to have a detailed JISO 78/79 (formerly ACORD 78/79) appraisal from a competent and experienced jeweler/appraiser who is a Graduate Gemologist (GG) and preferably a Certified Insurance Appraiser™ (CIA).

A diamond certificate from a reliable laboratory serves as authoritative verification of the qualities of the gem, and it is a highly recommended document for insuring high-value jewelry.

The most reliable labs for diamond certificates are GIA, AGS and GCAL.


If the appraisal does not explicitly state the diamond is natural, use every means possible to determine whether it is natural or synthetic.

On a damage claim for a high-priced diamond, always have the piece examined by a qualified gemologist, such as a Certified Insurance Appraiser™, to determine whether the diamond is natural or synthetic and to be sure its qualities are as stated in the appraisal.

Brand names for diamonds can tell much about the quality of a stone, such as whether it is color-enhanced, synthetic, etc. If the appraisal or other documents mention a brand name you don't understand, it might be worthwhile to consult a jewelry insurance expert before settling the claim.

Any inscription on the diamond's girdle, such as i.d. number, GIA certificate number, or brand name, is important information and should be taken into account when pricing a replacement.

GIA, AGS and GCAL are the most reliable labs for diamond reports. To verify authenticity of a certificate, follow the appropriate link. You will need the report number and the carat weight of the stone.

GIA Report Check
AGS Report Verification
GCAL Certificate Search

Remember that even a reputable diamond report is not a substitute for an appraisal. A diamond report describes only the stone; you need an appraisal for a description of the jewelry as a whole, including metal, setting, etc.

Especially for high-value jewelry, always compare all documents on file to be sure their descriptions agree. Check that the diamond report and the appraisal are describing the same stone. Uncovering discrepancies can help avoid overpayment of settlements.

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