October 2012

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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Fooling with Gold

That's not chocolate candy peeking out of its foil wrapper. It's tungsten, a cheap metal, that was covered by a thin layer of gold and marked as real gold. The masquerade was discovered by a gold merchant in New York's diamond district earlier this year

It turns out that counterfeiting gold is easier than you might think. All that's necessary in this scam is to give tungsten a gold plating.

What is it about gold and tungsten?

Gold is an unusually heavy metal. It's specific gravity is 19.3 (meaning it is 19.3 times as dense as water). For comparison: lead, a common metal that most of us think of as heavy, has a specific gravity of only 11.35. If a lead bar – or piece of lead jewelry – were coated in gold, it would feel suspiciously light to an experienced jeweler or gold dealer. But tungsten, at 19.25, is almost as dense as gold. Gold-plated tungsten passes the weight test, it feels "right." A bar like this one also tests right chemically and passes an x-ray fluorescence scan, since its covering is gold.

A company in China has an extensive website advertising an array of tungsten items, including golf clubs, fishing weights, darts, etc., ... and gold-covered tungsten bars and jewelry. It always refers to these latter items as "gold-plated tungsten alloys" or "fake gold" or "gold substitute." Each page of the site carries a notice describing the company as a professional business and warning not to use its tungsten alloy products for illegal purposes.

The company's advertising addresses gold dealers and jewelers who might want fake gold items to display at trade shows, rather than risk the theft of their genuine gold pieces. A stockbroker might want to gift a client with a golden (-looking) egg. A big business could give out gold coins as souvenirs to VIP clients or fake gold bars engraved with the company name.

As for jewelry, "gold substitute is available in a wide range of colors, finishes and styles," and can even include gemstones. It looks right, it feels right and it's much more affordable than gold.

Photos from http://www.tungsten-alloy.com

Disclosure is particularly important when a much cheaper material is made to look like an expensive one, especially when the substitute does not act like the real thing.

Gold-plated tungsten jewelry, besides lacking the inherent market value of gold, also has wearability issues. These caveats come from the manufacturer:

So, this manufacturer is being up-front about the content and durability of its products and also is not encouraging illegal activity. But disclosure must be present all the way down the selling chain, from manufacturer through to the consumer and insurer. Someone with deceit in mind can easily interrupt that flow and pass off counterfeit gold jewelry as the real thing. Also, where there is one manufacturer, there are likely to be others, now or in the near future.

The gold-coated bar pictured above was definitely an attempt at fraud, and the FBI and Secret Service are investigating the incident. So far no reports have surfaced of counterfeit gold jewelry being passed as genuine, but consumers and insurers should be on guard. With the high price of gold and the low cost of tungsten, this looks like a scam waiting to happen.


Tungsten certainly isn't "as good as gold."  A recent comparison had an ounce of gold worth $1,766, while an ounce of tungsten was worth about 25 cents!

There are simple ways to test for the presence of tungsten. For example, tungsten will be drawn to a magnet while gold will not be. A trained jeweler will be aware of other tests.

A reputable jeweler deals with reputable suppliers who stand behind their products. Be wary of insuring jewelry from questionable sources, such as website auctions and second-hand sellers.

Jewelry purchased in tourist locations often does not measure up to the stated quality. These locations are perfect settings for fraud, since the buyer cannot comparison shop or have the purchase examined by an independent appraiser.

An appraisal for jewelry containing gold should include karatage, manufacturer and style number, workmanship, and weight of the piece.

Be suspicious if jewelry is called gold but the manufacturer's name is not given on the appraisal. Jewelry stamped with karatage must, by law, bear the manufacturer's trademark. The appraiser should list the owner of that trademark (that is, the manufacturer) on the appraisal.

The best defense against scams, or retailer incompetence, is the insurance industry's standard for jewelry appraisals, JISO 78/79. The appraisal should be written by a trained gemologist (GG, FGA+, or equivalent) with additional insurance appraisal training. One course offering such additional training is the Certified Insurance Appraiser™ (CIA) course of the Jewelry Insurance Appraisal Institute, Oakland, CA.



If the appraisal is not on JISO 78/79, use JISO 18 (Jewelry Appraisal and Claim Evaluation) to check that all necessary information is given.

If there is inadequate information on file, perhaps a poor appraisal or merely a sales receipt, a jewelry insurance expert may be consulted before settling the claim.

Note: Gold jewelry comes in a variety of shades, depending on the alloys added to increase its strength and make it more suitable for jewelry. Manufacturers may add a coating of rhodium to a finished piece of white gold jewelry to make it a "whiter white." As this coating wears off, the gold's off-white color will reappear. Such jewelry is genuine gold, not to be confused with a gold substitute like tungsten. However, a rhodium coating that wears off is considered normal wear and tear, not damage for which the insurer is liable.

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