July 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


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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Color-Grading Diamond: the Master Stones

You know that CZ—cubic zirconia—is not a good replacement for diamond in a ring.

How about using CZ to grade the color of a diamond?  Once again, CZ is not an acceptable substitute for diamond.

Color grading a white diamond is really about the absence of color. Any hint of color lowers the value of the diamond, and the stronger the color, the lower the gem's worth. The color grading scale established by GIA, and recognized around the world, has letter grades to describe the increasing presence of color.


Master Set of GIA-graded Diamonds

To grade the color of a diamond, GIA recommends comparing the stone in question to a master set of diamonds previously graded by GIA. Diamonds in a master set are carefully chosen to represent letter grades on the GIA color scale.

A typical master set has 5 GIA-graded diamonds. The photo above shows an expanded set of nine diamonds. A key in front labels the grade of each stone in the set. Of course, the fine color distinctions among the stones are not visible in a photograph on your computer screen. Even in person, it takes a gemologist's trained eye to distinguish the very subtle color difference from one grade to the next.

Because a precise color grade is a crucial ingredient in arriving at the valuation for a diamond, most appraisal organizations (NAJA excepted) require a master set of 5 GIA-graded diamonds, and that is what most serious appraisers use.

A set of diamonds is rather expensive, costing several thousand dollars. To save money, many appraisers use a master set of CZ stones instead. GIA, AGS, AGA and ASA do not accept CZ master stones nor will they certify a lab using CZ.


The CZ Problem

Cubic zirconia available these days is lab-made, and the stones can be produced in various colors. To make a set of master stones for grading, CZ stones are made to match the diamond master stones graded by GIA.

You might think that, since CZ stones more or less match the GIA diamond masters, using CZ masters would be OK. The problem is that, while diamond color is stable, CZ color can drift over time from exposure to heat or light.

To remain accurate, CZ masters must be checked against GIA-graded diamond masters from time to time to be sure they are still true to their stated grade. Stones that have faded should be replaced. But typical appraisers using CZ masters do not "update" their master set.

If the colors in a CZ master set have faded, the appraiser will be grading diamonds higher than their true grade. That is, the color grade on the appraisal will be inflated. Many jewelers, and even many jewelry owners, feel a discrepancy of this kind isn't very important because the appraisal is, after all, "only for insurance."


What it means to insurers

An inflated color grade—whether done deliberately, or through inadequate experience, or because of improper grading tools—can matter a great deal at settlement time. For high-quality diamonds, a difference of one color grade can mean thousands of dollars.

But how can an insurer know whether the appraiser used CZ stones (of questionable accuracy) or GIA-certified diamonds for grading?

Ideally, this information should be given on the appraisal—as it is on the insurance industry's appraisal standard, JISO 78/79. The second side of a JISO appraisal provides much specific information, including the appraiser's credentials, purpose of the appraisal, warranty info, grading charts, and the gem lab equipment used for testing and grading stones.

The appraiser certifies that this appraisal was performed in a lab equipped with the gemological instrumentation necessary for a thorough and complete appraisal of the item(s) being appraised. Such instrumentation includes but is not limited to the following equipment: binocular 10x microscope with dark field illuminator, DiamondLite or comparable equipment, dichroscope, fiber optic lighting, filters and lenses, leverage gauge, millimeter gauge, optical measuring device, calipers, ruler, long and short wave ultraviolet lamp, master set of five color-graded master diamonds certified by the GIA Gem Trade Laboratory, master set of colored stones or color communication system, metal testing acids and gold tip needles, penlight, photographic equipment, polariscope with interference figure sphere or lens, refractometer, scale that gives weights in carats, grams, and/or pennyweight to .001, spectroscope, and dual tester measuring thermal and electro-conductivity.

From JISO 78/79 Appraisal Form


The text on JISO 78/79 explicitly states that the gemologist uses a "set of five color-graded master diamonds certified by the GIA Gem Trade Laboratory."

The majority of insurance appraisals carry no such language. Even those multi-page appraisals, that may expound on the appraiser's education, work résumé, and professional affiliations, or that give tutorials on the 4 Cs of diamond, rarely mention the master set used for color grading.

The truth is that most appraisers use CZ stones for color grading. In fact, some gemologists do not write appraisals on JISO 78/79 specifically because they don't use GIA diamond masters and therefore cannot meet that JISO requirement.


What to do?  Pick your battles.

The possibility of a grading error because of faded CZ stones is more important for high-quality diamonds than for stones of lesser value, since the financial risk is greater. So our suggestion is, pick your battles.

  1. When the appraisal you receive describes a diamond of high quality (high grades in both color and clarity), insist on a grading report from a reliable lab such as GIA to verify the quality.

    A reputable lab will use GIA diamond masters for color grading. The lab will also have up-to-date equipment for determining other gem qualities, and it will use the latest means for determining whether the stone in question is a mined diamond or is lab-created. Both are "real" diamond, but lab-made diamond has a considerably lower valuation.

    If the lab's grades agree with those on the appraisal, all is well. If they disagree, you would do better to trust the word of GIA's diamond lab.
  2. When the jewelry described on the appraisal is of lesser quality (say, H or lower in color, SI2 or lower in clarity), the price differential from one color or clarity grade to the next is not so great. In such a case, you may want to just go with the appraisal description.



Labs these days can produce diamonds of fine color and clarity, so be sure the appraisal specifies whether the diamond is mined (sometimes called natural) or lab-made (sometimes called synthetic or man-made). Mined diamonds have a much higher valuation than lab-made gems of similar quality. You don't want to replace a lab-made diamond with a mined one.

Occasionally an appraisal will mention the "color master stones." Be aware that "color master set" does not mean diamond masters. If an appraiser were using a GIA master set of diamonds and chose to reference that on the appraisal, the appraiser would say GIA master diamonds.
For all diamonds of high valuation, ask the insured for a report from a reliable lab such as GIA, AGS or GCAL, to verify the gem's qualities. Where there is a conflict between grading opinions, gemologists and insurers regard GIA as the final arbiter.

If you have a lab report number but do not have the report itself, or if you have a report that you want to verify, you can often get a copy online. Here are the links for verifying reports from the major labs:




GIA is the most highly regarded authority on diamond grading. Other labs may use more flexible grading.

Whenever a lab report was used for insuring the diamond, your replacement diamond should be certified by the same lab. That is, replace a GIA-graded diamond with a GIA-graded diamond of the same qualities; replace AGS with AGS, IGI with IGI, EGL with EGL, etc. You'll find that GIA stones are more expensive, because GIA has more rigid standards, but getting a stone certified by the same lab ensures that the replacement is the same quality as the original.

If documents on file do not specify whether the stone is mined or lab-made, use every means possible to determine this before settling the claim. Mined diamonds have a significantly higher value than lab-made diamonds of similar quality.



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