June 2014

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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Marketing Confusion —
What is this gem anyway?

Is a stone a diamond because its weight is in carats?  Is a brand trustworthy because it's famous? Can you believe everything you read on the Internet?

The increasing demand for lower-priced jewelry, plus the technological advances in altering and manufacturing gems and gem wanna-be's, have resulted in more and more confusion for consumers—and for jewelry insurers.

Where advertising appears, what terms are used, what information is left out, warrantees, certificates, photos, all affect what the customer expects or assumes about the jewelry. This is especially true with internet sales, where jewelry is bought sight-unseen.

This issue of JII uses one example, one seller, to discuss how to see through marketing manipulations and not be victimized by fraud.

Branding & Publicity

The tiara pictured above is the Miss Universe crown. Diamond Nexus partnered with the Miss Universe pageant to design the crown, which provides great publicity for the company. Its website says, "The most beautiful women in the world wear Diamond Nexus."

The company has a presence on Facebook, Twitter, etc., and a large number of youtube videos, one reportedly praising itself as "the world leader in superior quality lab-created precious gemstones." On its ample website there are many testimonials from happy customers.

Customer discontent – Is it diamond?

With a little deeper research you'll discover other buyers, customers not so content with their purchases. These consumers find their way to sites dedicated to exposing scams and they pour out their stories:

I wore my engagement ring less than two months and the strong, quality diamond they deceivingly sold us, BROKE.

The stone fogs up pretty easily.

I have lost 6 diamonds in a matter of 6 months. Once I got my ring back and the diamond fell out the next day.

Sloppy craftsmanship.

Within 6 months my ring had MAJOR scratches! 

Nothing but cheap CZ! My Jeweler said to my fiancé: Yeah, it's a $2.99 Cubic Zirconia!

They advertise that these are DIAMONDS until you read the very very fine print.

Gemologists, as well as customers, have concerns about the product DN sells. Is it diamond or simply CZ? And why don't the customers know?

One reason for the confusion: the Diamond Nexus website advertises jewelry with lab-made diamonds and with diamond simulants — but it blurs the distinction.  

Lab-made diamonds are genuine diamond, with the physical and optical properties of mined diamond. "Simulant" means imitation diamond, and in this case it is CZ, cubic zirconia. Text describing the jewelry often refers to a gem as "a Diamond Nexus," without using the word diamond or simulant.

Laboratory analysis – Looking at a simulant

CZ is very inexpensive at the wholesale level; according to one gemologist, DN's markup is 10 or more times. The company claims it uses a proprietary coating that provides a significant improvement over CZ, preventing the stone from becoming discolored, making it harder and less likely to scratch, and giving it a radiance closer to that of diamond. This process is said to account for the higher-than-CZ price.

Analysis by several reliable independent labs found none of these claims to be true. The chemical composition and specific gravity of DN simulants are typical of CZ. DN claimed their stones have a corundum coating, giving them greater hardness and enabling them to cut glass (as diamond can), but examination showed the stones to have the hardness of CZ, which is well below that of diamond. In fact, the independent labs found no coating at all.

Lab report supplied by seller

Gemologists also take issue with the AIG lab report that comes with a DN simulant. The report uses official gemological language for describing the color and clarity of diamond, but CZ is not diamond. By calling the stone a "Diamond Nexus gem," the lab report gives the impression that the stone is diamond. Nowhere on the lab report do the words "simulant" or "cubic zirconia" appear.

Reputable gemological labs would not grade simulants at all. When questioned about the report's terminology, the director of the AIG lab responded, "When something comes in, we write it as the trade identifies it." Note to insurers: don't confuse this with a reliable independent lab report!

False advertising

One group critical of DN describes the company's approach as "typical bait-and-switch." DN describes the attributes of lab-made diamonds and denigrates CZ jewelry made by others. Meanwhile, it often ambiguously refers to its own product as "a Diamond Nexus" (e.g., "A Diamond Nexus is forever"), rather than as either a diamond or a CZ simulant. Many consumers believe they are buying lab-made diamond but what they're getting is cubic zirconia.

Both gemologists and the public have raised issues of false advertising. Several years ago, two message boards accused DN of selling simple CZ with a substantial markup, and the case was settled out of court. Other critics have been threatened with lawsuits. According to reports, when the critics said, Go ahead and sue, DN never followed through with the threats.

Given the prodigious number of jewelry sellers and manufacturers, the beautiful pictures, the pricing competition, the advertising coming from so many sources, it's easy for consumers to be misled. To avoid fraud, it's increasingly important for agents and insurers to follow the practices outlined below.


The appraisal and lab report should identify the stone being described—e.g., diamond. The brand name is not sufficient.

Brand names can provide useful information, though, so all papers relevant to brand — especially warrantee papers — should also be kept on file.

Be cautious when insuring jewelry purchased on the internet. Examine the appraisal and other documents carefully.

Recommend that your clients get an appraisal from an independent appraiser as soon as possible after the purchase, to verify that the quality and value of the jewelry are as stated by the seller. The appraiser should be a trained gemologist (GG or FGA+), preferably one who has additional insurance appraisal training. One course offering such additional training is the Certified Insurance Appraiser™ (CIA) course of the Jewelry Insurance Appraisal Institute.

Be wary of appraisals and lab reports supplied by the seller, as they are likely to be incomplete and contain inflated valuations and quality descriptions.

All diamonds of significant value should have a certificate from a reliable lab. We recommend the following labs and suggest that you use these links to verify reports you receive.

GIA Report Check
AGS Report Verification
GCAL Certificate Search

Ask for the sales receipt for jewelry purchased within the past 3 years. (Jewelers are required by law to keep sales records for 3 years, so if the insured doesn't have a receipt, they can contact the seller.) If there's a huge difference between appraised value and purchase price, the purchase price is likely to be a more accurate indicator of value.


Check appraisal and other docs to be sure the gem is identified (for example: diamond). If the stone is not specifically identified, it's likely to be a simulant.

Examine the appraisal for words such as treated, fracture-filled, enhanced, composite, hpht, synthetic, lab-grown, or other qualifying terms that suggest the stone is other than natural and untreated. Treated and synthesized gems are generally worth a fraction of the value of natural gems of similar appearance.

Compare the appraised value with the sales slip. If there is a large discrepancy between valuation and selling price, the selling price is likely to be a more accurate indicator of value.


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