September 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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Why NOT to insure a Rolex:  Reasons 8-10

In this issue we home in on counterfeit watches. Here are three ways of looking at the fakery – and that makes three more reasons for insurers to be wary of covering a Rolex.

Reason # 8: Rolex is the #1 faked watch.

This is the observation of several jewelers, watch connoisseurs, and insurance specialists who track such things.  One of these observers is Fake Watch Buster, a watch enthusiast with a mission. When braggarts post pictures of their luxury watches on social media like Instagram, Twitter and Flickr, he exposes the fakes, often showing a picture of the genuine watch next to the knockoff, as in the photo pair above.  

The ones that Fake Watch Buster catches, and there is never a shortage of examples, are obvious enough that he can recognize them from a cell-phone photo. But knockoffs run the gamut from sophisticated copies, selling for tens of thousands of dollars, to flimsy imitations stamped with the word Rolex, that go for under $100.

Rolex is the largest single luxury watch brand, so it makes sense that it is the also the most-counterfeited brand. Cheap or pricey, what these fakes have in common is that they play off the cachet of the name Rolex.

Reason # 9: There are more counterfeit Rolexes in circulation than genuine ones—probably about 10 times more.

Can these buyers spot a fake?

The extent of the problem is a bit staggering. It's been estimated that the total number of faux Rolex watches produced every year is 10 times the number made in Rolex's own facilities.

Some counterfeits are so well done that only an expert can detect them. They may be reconstituted watches, made of parts cannibalized from other Rolexes that were no longer working. Or they may have some genuine parts, along with some cheap substitutes. Counterfeit manufacturer's boxes and certificates of authenticity complete the brand-name aura.

Some sell for ridiculously low prices. Buyers looking for bargains on luxury watches at flea markets or online rarely have the expertise to recognize telltale signs of fakery. Maybe they think they've gotten the steal of the century, paying much less than the item is "really worth." You might assume a buyer who gets a "Rolex" on the cheap knows he's getting a knockoff, but apparently that's not always the case. Some buyers are so sure they got a bargain that they go to an authorized Rolex dealer for service! The customer may have been fooled but the Rolex dealer is not and he will refuse to service a counterfeit watch.

Steamroller crushing counterfeit Rolexes

But a high purchase price does not guarantee an authentic Rolex. Paying $20,000 for a $50,000 watch may seem like a great deal, but hallmarks can be forged. Authentic visible parts may conceal a movement that was cobbled together. Those diamonds may be CZ, and the gold may actually be gold plate over a cheaper metal.

Counterfeit Rolexes are so common that experts trip over themselves inventing terms like Foolex and Fauxlex. Major cities like New York, Hong Kong and Tokyo are known to have "fake districts" where all things counterfeit, from purses to sunglasses to watches, are peddled to consumers looking to find them.

And then there's the internet. A number of websites openly sell replica watches. A site may even show pictures of the authentic watches while pitching its own replicas at a fraction of the price.

One estimate is that 15-30% of searches for watches on the internet are looking for replicas. This suggests that buyers are not being duped. They merely want the brand name, without regard to quality or performance.

Rolex is constantly battling internet sellers of counterfeits, bringing lawsuits against the retailers and closing their websites.  In one spectacular demonstration, the company invited press cameras to record 7,000 confiscated replica Rolex watches being crushed by a steamroller.

Reason # 10: After-market alterations and add-ons are spoilers.

An appraiser notes clues to fakery in watch offered online.

Q. How many non-Rolex parts can be added to a Rolex before the watch is no longer considered a Rolex?

A. Just one.

Rolex states: "The addition of non-genuine parts to any Rolex watch renders it a counterfeit as defined by Federal law."

A genuine Rolex must be Rolex in all its parts. Any changes—a new band, gems added, whatever it may be—that come from a non-Rolex source render the watch counterfeit. It's a good guess that many Rolexes sold through online auctions have non-Rolex alterations or substitutions. Despite being widely available, such watches are illegal to sell because they violate the company's trademark copyright.

Such an altered watch has a much lower value that the genuine Rolex it aspires to be.

Insurers' odds:   10:1

10 times more fake Rolexes than genuine ones are put into circulation each year. These are the odds you face when insuring a Rolex.

Doesn't the appraisal verify to the insurer the authenticity and value of the watch? The blistering topic of Rolex appraisals will be the subject of next month's JII.



Considering the prevalence of counterfeit Rolexes, be on guard. You don't want to have to replace a cheap knockoff with a genuine item down the line.

Many customers may not be aware that luxury watches bought from sources other than an authorized dealer may be counterfeit, despite any logos or trademarks. Insisting on complete information about the watch not only protects the insurer but is a service to the policyholder.

The sales receipt for a Rolex should be from an authorized Rolex dealer.

Any watch from an unauthorized source should be thoroughly inspected to be sure that all its parts are genuine, including the movement. This requires opening the watch case and examining the entire watch in detail. The inspection should be done by an authorized dealer in that brand.

Always ask for warrantee papers, even if the watch is past its warrantee date. These papers attest to the authenticity of the watch.

Not every jeweler is competent to appraise luxury watches, to judge authenticity of the watch and all its parts, and to recognize non-authorized aftermarket add-ons as well as out-and-out fakes.



Losses of ladies' watches are infrequent, but losses of men's are much more common, and they can be expensive. Be on guard against fraud. If a policyholder discovers he has inadvertently purchased a counterfeit watch he may decide to lose it and cash in.

Check the appraisal for manufacturer, model and serial number, plus any other identifying information.

Check for manufacturer warrantees and other evidence of authenticity. Merchandise bought online (or from other unauthorized sources) may be second-hand, or may be altered with cheaper parts, or may be a complete knockoff wearing a prestigious logo.

The sales receipt is important evidence. If the seller is not an authorized dealer in that brand, the watch may be counterfeit.

If you suspect a watch is counterfeit, consider consulting a jewelry insurance expert to help resolve the issue.





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