May 2015

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

2017

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

2016

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

2015

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

2014

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

2013

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

2012

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

2011

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

2010

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

2009

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

2008

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

2007

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

2006

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

2005

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
October

Grading the Color of Colored Diamonds
November

New GIA Cut Grade for Diamonds - December

2004

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

2003

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

2002

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

2001

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

2000

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 you should read that appraisal

What's wrong with this appraisal? Gemological lingo can be mysterious, but sometimes even a casual glance from a non-gemologist is enough to spot a problem.

Enlarge the picture and see for yourself.

Now, this is an official-looking appraisal, received by a major insurance company with an application for insurance. It starts out well but then suddenly mentions "eight other diamonds of who knows what shape." Was the appraiser kidding?! Did he think no one would notice? Or care? Was this a little note he left for himself, intending to go back later and fill in the information, but then forgot?

You can bet the underwriter who came upon this off-hand comment examined the rest of the appraisal very thoroughly. Unsurprisingly, other information was missing as well.

Insurers rarely see such a blatant example of carelessness, but they usually see appraisals with important descriptive information left off, information that is necessary for determining the value of the jewelry.
 
Appraisals missing crucial information can be costly for insurers at settlement time—whether the insurers realize it or not.

Ex. 1   The appraisal above did indeed have other omissions. The description did not give color and clarity of the diamonds.

Ex. 2   Here's an appraisal that doesn't discuss mounting at all. It doesn't even say what metal is used.

Also, there's a little hocus-pocus: Clarity is described as SI3. In the GIA standard grading system, there are only two steps in the "Slightly Included" range, SI1 and SI2. The grade below SI2 is I1. The appraiser was avoiding the I1 grade because it stands for "Imperfect-1" and means that inclusions are visible to the naked eye.

Ex. 3  This appraisal has a densely-packed  paragraph that camouflages a lack of information on setting and cut. 

But wait, there's less.

After this jewelry was involved in a damage claim, other appraisal problems became apparent. The appraisal describes the emerald as yellow green, but examination of the damaged stone showed it to be bluish green. In addition, the gem's tone and saturation were omitted. These discrepancies and omissions are not trivial. The major determinant for an emerald's value is its color, and the descriptive language for colored gems—gemological terminology describing a stone's tone, saturation and hue—is standardized and quite precise.

An unfortunate note:

All these appraisals, like the vast majority of all jewelry appraisals for insurance, leave off information about a diamond's CUT—which means not the stone's shape but its geometric proportions. For insurers (and customers), this is a serious omission because cut proportions can account for as much as 50% of a diamond's value.

Ex. 4   A respected British journal for jewelry appraisers recently ran a piece bemoaning the low quality of jewelry appraisals in the UK. The article was illustrated with this particularly "problematic" example, a very unprofessional-looking handwritten appraisal, with a number of clumsy errors.

The appraisal does not say whether the jade bracelet is jadeite or nephrite jade; does not give the color, or say whether color is natural or treated/enhanced; omits its weight and dimensions; and omits diamond dimensions. The description of a cluster ring does not give color, clarity or cut of the diamonds. And the appraisal uses the vague phrases "yellow metal," "white metal," and "high carat gold."

Ex. 5  A handwritten appraisal like the one from the UK article certainly invites critical examination, but even professional looking appraisals can be misleading.

This appraisal is a sample from the jewelry seller's website. It looks organized and uses proper diamond-grading terminology. However, it does not specify that the gem described is a diamond simulant—that is, imitation diamond.  Diamond Nexus is a seller of diamond simulants and does not conceal this fact on its website. However, the appraisal only refers to the stone as a Diamond Nexus (not a diamond).  Missing this important distinction could lead to a very excessive settlement.

 

Reliable Appraiser

Unlike the example at the top of the page, many of the lacks described here are not things that an agent or underwriter could easily catch. This makes it all the more important to have an appraisal from an appraiser you can trust for accurate descriptions.

We suggest relying on appraisers who are professionally trained gemologists. They will usually have one or more of these credentials after their signature. 

GG          Graduate Gemologist of the Gemological Institute of America
FGA+      British equivalent to GG in training (be sure the "+" is there)
CIA         Certified Insurance Appraiser in jewelry, appraiser is also a GG
           
Here again, look closely. Because GG (Graduate Gemologist of the GIA) is such a respected credential, appraisers who've taken some classes from GIA may use similar designations. "GIA Certified Appraiser," for example, is not a credential, as the GIA offers neither classes nor certification in appraising. "GIA Diamond Graduate" and other similar designation are not the same as GG. If the appraiser is a Graduate Gemologist, he or she will say so.

A CIA is a GG or FGA+ who has additional training in writing jewelry appraisals for insurance and is a graduate of the Certified Insurance Appraiser course offered by the Jewelry Insurance Appraisal Institute. They can be trusted to write the detailed appraisals that insurers need to properly insure jewelry.

Although it's not the agent's or underwriter's job to know whether info on the appraisal is accurate, the appraisal for insurance should have detailed information. JISO (formerly ACORD) appraisals are in a standardized format that prompts the appraiser for all necessary details. The agent and underwriter, looking at a JISO appraisal, can easily see that information is given because the blanks are filled in.

Encourage your policyholders to submit JISO 78/79 (for use by GG/CIAs) or JISO 806 (for other jewelers and appraisers) or JISO 805 (a descriptive sales receipt). Some appraisers attach a JISO appraisal to their regular appraisal, as a summary. That way the jeweler/appraiser presents his customer with a document that has his letterhead, phrasing and style, but the document also includes a JISO appraisal that makes the insurer's job of scheduling the jewelry easier.

JISO appraisal forms are available free of charge at www.JISO.org.

 

FOR AGENTS & UNDERWRITERS

Encourage clients to obtain a JISO appraisal from their appraiser. Explain that it summarizes for the insurer information already on their appraisal and the appraiser can easily fill it in.

An appraisal done by the jewelry seller or included with the purchase may not be trustworthy. The quality of the jewelry may be exaggerated and the valuation is likely to be inflated. Ask the policyholder to obtain an appraisal from an appraiser independent of the seller, preferably a gemologist who is a GG or FGA+ and has additional training in appraising for insurance, such as a CIA (Certified Insurance Appraiser).

 

FOR ADJUSTERS

Your job always is easier if you are dealing with a JISO 78/79 Jewelry Appraisal, or JISO 806 Jewelry Document for Insurance Purposes, or JISO 805 Sales Receipt, since they will give complete information in a standardized format. This information will be sufficient for you to have a qualified jeweler accurately price a replacement.

If one of the above is not available, use JISO 18 Jewelry Appraisal & Claim Evaluation form to analyze data from the documents you have. This is especially helpful if you're faced with a "narrative" appraisal. JISO 18 allows you to order the information from other documents in a useful way and see what details may be missing.  JISO 18 follows the same basic format as the JISO appraisal forms.

Use the appraisal's descriptive data, rather than its valuation, to price a replacement.

 

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