April 2013

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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Tiffany v. Costco

Happy Valentine’s Day!  On February 14, 2013, Tiffany & Co. filed a suit against Costco for selling diamond engagement rings falsely identified as “Tiffany” rings. The suit alleges trademark infringement, counterfeiting, deceptive business practice, and false advertising, and asks for all profits from the ring sales plus damages of $2 million per infringement.

It’s a battle of giants. Both parties are respected international retailers. Although their popular images are miles apart—Tiffany a prestigious purveyor of luxury creations, Costco a warehouse seller of discounted high quality merchandise—the two stores are both jewelry giants. National Jeweler ranks Tiffany in 3rd place and Costco in 9th place as jewelry “supersellers.”

Costco shoppers are not only large families stocking up on bulk household goods and packaged food.  Marketing research shows that Costco consistently attracts a large number of “ultra-affluent” consumers (defined in this study as those with an annual household income of more than $250,000). These shoppers are looking for “treasures,” high value items at lower prices. Treasures like large screen TVs, name brand jeans, luxury watches, and diamond engagement rings.

Tiffany’s counsel argued that everyone knows how buying something on a street corner or from an unknown source is risky, but Costco customers were taken in because members expect authentic brand merchandise. Signage in the store identified these rings as Tiffany jewelry and the sales clerks called them Tiffany rings. The suit charged that hundreds, if not thousands, of buyers thought they were getting authentic Tiffany jewelry. At least one prominent legal firm is investigating the possibility of a class action suit against Costco on behalf of these customers.

What’s in a name?

Manufacturers of luxury goods want to protect their name and reputation. Tiffany has often been victimized by fakes and knockoffs (see our issue on the risks of Ebay purchases) and closely monitors internet sites for ersatz Tiffany jewelry.

Costco says this is not a case of counterfeiting.

In response to the suit, Costco argued that “Tiffany” is a generic term, commonly used for a particular gem setting. It cited several sources, from Dictionary of Gems and Gemology to Wikipedia to Wedding Planning for Dummies. All agreed that a Tiffany setting means setting a solitary stone on 4-6 prongs, and that the setting was commonly used for diamond solitaire engagement rings. Some sources just called it Tiffany Solitaire, without saying setting or mounting.

Tiffany mounting 

 Tiffany mounting from Tiffany


In addition, Costco showed that its presentation box is very unlike Tiffany’s signature blue box with white bow; the rings Costco sold were not engraved with the Tiffany name; and the appraisal and IGI certificate that accompanied the purchases did not identify the rings as Tiffany jewelry.

In short, Costco argued that the company did not fool customers into believing they were buying jewelry made by Tiffany. It merely used a common jeweler’s term.

It appears that Tiffany did not do enough to protect its name. The law says that once a term is in common use it is not protected. Kleenex, for example, spent a fortune to keep competitors from using its name. It pushed the phrase “facial tissue” in order to preserve its trademarked brand, and was successful. Tiffany probably comes too late with its objections, as the term has been used in the jewelry industry for over 15 years.

Insurers are watching this case

The lawsuit has yet to be decided, and the outcome may well affect jewelry insurers. Because of its prestigious name, Tiffany can and does charge a much higher price than other manufacturers, even for a simple design like the solitaire engagement ring. Tiffany generally will not work with insurers on claim replacements, so right now, many insurers who are faced with generic Tiffany jewelry write an agreed value policy. But this is changing. Insurers are increasingly aware that fraud can occur at every price point, including high-value merchandise. In such generic type jewelry, about 90% of the value of the piece is from the center stone, which is of typical cut and quality. Insurers are unwilling to pay inflated prices for such generic gems that are readily available in the marketplace.

It would be better if insurers could replace with like kind and quality—a gem of the same qualities in a setting of the same style and material—regardless of manufacturer. The result of this suit may allow us to move in that direction.


For any high-value jewelry, insist on a detailed, descriptive appraisal, such as on JISO 78/79. This descriptive information is what you need to price a replacement. Especially important are the stampings/engravings of quality and trademarks, which today can easily be conveyed with a picture.

If it is a ring that comes from Tiffany (or any other seller), you may want to base premiums on the sale price, but an adjuster will usually base a settlement on the jewelry’s value at time of loss (not exceeding the scheduled limit).

Ask for the sales receipt. Counterfeit jewelry abounds, so pay attention to these red flags:

If the answer to any of these questions is Yes, and the jewelry is high-priced, insist on an appraisal from an independent appraiser who is a GG, FGA+ or equivalent, and who has advanced training in appraising for insurance, such as a Certified Insurance Appraiser™(CIA).


If the jewelry was purchased on the internet, be very suspicious of the stated quality and valuation.

A huge discrepancy between selling price and valuation is a strong indication of inflated valuation.

If the jewelry is a brand name, look for evidence of authenticity.

Adjusters would be well served to learn what a “bill of material” is and how the “cost approach” is applied.


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