June 2016

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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Diamonds at Auction — Big gems, big prices, and the trickle-down effect

Just last May "The Aurora Green" fetched $16.8 million at Christie's Hong Kong auction, setting a world record for a green diamond. Jewelry of that value rarely crosses an agent's desk, but you may need to cover jewelry bought at auction. It turns out that those stratospheric auction prices can have an effect on gem values down the line.

Blue Moon of Josephine
$48.4 million, 2016
Record price for diamond sold at auction

Large, public jewelry auctions are a relatively recent phenomenon. Big players like Christie's and Sotheby's date back to the 18th century, and for about 200 years the only jewelry items they handled were part of the large estates of titled society. The auctions were fairly private and known mainly to likely buyers.

The first "celebrity" gem auction was in 1969, when a 69.42 ct diamond made worldwide headlines by becoming the first diamond to sell for over a million dollars. In fact, the cleaving of the rough for this gem had been done before television cameras. The gem was eventually bought by Richard Burton for Elizabeth Taylor, and some 6,000 people lined up at Cartier's to view it.

Public auctions and the "auction effect"

Cartier Flamingo Brooch
$806,000 in 1987, $2.67 million in 2010
Owned by the Duchess of Windsor

As jewelry auctions grew, they gained media attention. Hammer prices were published and private buyers began buying gems for investment. Gem dealers noticed what they termed the "auction effect" — price bumps for top-quality gems after similar goods brought high prices at public auctions.

In 1979 a 4.12 ct Burmese ruby sold for $414,832. This was the first time a colored gem sold at auction for more than $100,000 per carat. But within a few months, values fell nearly 50%. The auction effect had initially pushed prices up, but the market had provided an adjustment.

By the late 1980s fancy color diamonds, once available only to collectors and connoisseurs, were appearing at public auctions. Auction catalogs, which used to give little information beyond gem type and carat weight, began to have detailed quality descriptions, origin reports, and background histories for gems like Burmese rubies and Kashmir sapphires. The descriptions were accompanied by lush illustrations.

Unique Pink
$31.6 million, 2016
Record price for vivid pink diamond
sold at auction

Whereas they formerly concentrated on estate jewelry, auction houses now sought newly mined and cut stones, and even commissioned jewelry houses to create major ruby, sapphire, and emerald pieces. De Beers resumed selling the very large diamonds it had stockpiled during the early 1980s, when prices were depressed. Wealthy buyers engaged in bidding competitions, which drove prices ever higher.

Publicizing the results of auctions increased the market for colored diamonds and other colored gems. It also broadened awareness of the high premiums for such gems as Burmese rubies, Kashmir sapphires and Colombian emeralds. If these sales had been private, they would have had little influence on the market.

Value of Provenance

Cartier Panther Sapphire Brooch
$933,000, 1987
Owned by Duchess of Windsor

The 1987 sale of the Duchess of Windsor's jewelry was a major publicity event. Advance media coverage included histories of the major pieces, descriptions of signed pieces by Cartier and Van Cleef & Arpels, and even the notoriety of some of the buyers, such as Elizabeth Taylor. Sales from the estate totaled $50.3 million—seven times the pre-sale estimate.

It is widely understood that the jewelry's extraordinary provenance generated bids many times the intrinsic market value of the pieces. Whether such pieces retain their prestige and auction value is an open question.

The Duchess of Winsor had a brooch showing a diamond-studded panther crouched on a perfectly round 152.35 ct star sapphire. The piece became the envy of collectors, and Cartier produced more versions of it. However, none of the subsequent versions could match the original, if only because of the size and quality of the sapphire it held.

Sunrise Ruby
$30 million, 2015
Record price for ruby sold at auction

One of these later versions was involved in an insurance dispute. It was made by Cartier, but had a smaller sapphire and was not of the same quality and weight. An expert remarked that these later pieces were like looking at an obvious copy of a famous painting. And, as collectors should know, any replica, any knockoff regardless of quality, cannot match the original in provenance.

A striking illustration of the draw of provenance was the 1996 auction of items from the estate of Jacqueline Kennedy Onassis. Reports of the event described an atmosphere of "frenzied bidding" at Sotheby's. Even household items brought prices of 10 times their estimated value, or even much more.

A kunzite ring, bought by President Kennedy for his wife but never given to her, was valued in the auction catalog at $6,000-$8,000. It sold for $431,250 – some 60 times the pre-auction estimate.

The auction house had based its estimates on the intrinsic value of the items, and few of the purchases were considered antiques or unusual works of art. One account of this auction described the buyers as "looking for pieces of Camelot." That experience, that piece of history, is what they paid for. It is unlikely that the Jackie Onassis pieces will retain their auction prices.

But as one dealer remarked, the Windsor jewelry auction boosted prices and demand,  and it "got the world emotionally involved in jewelry."

See below for insuring jewelry bought at auction.



Few jewelry items are as unique and outrageously expensive as those discussed above, but those famous pieces can affect the jewelry market as a whole.

If you are insuring expensive jewelry bought at auction, be aware that the auction price does not necessarily reflect the value of the jewelry. Bidders can get caught up in the moment of history or in sentimentality or a bidding contest. But afterwards, realistic market values set in.

For purchases based on provenance, the jewelry's value may fall if the celebrity who owned it fades from public interest. Or the value may rise dramatically over time, as with the Duchess of Windsor flamingo piece pictured here.

Also, a gem type, such as a colored diamond, may become popular (and hence, valuable) because a public figure is seen wearing it. But it can drop in value when another fad hits the market.

High-value jewelry sold at auction often comes with a lab report. Be sure to verify the report using these links to the reliable gem labs. If there is no lab report, or if the client submits a report from a lab other than one of those listed below, ask for a report from one of these labs before insuring the jewelry.

These are the major trustworthy labs:
AGS Report Verifcation
GCAL Certificate Search

For high-value jewelry, ask for two appraisals from reliable appraisers who are independent of the seller. Be wary if the appraiser's valuation does not come near the auction price.

The best appraisal includes the JISO 78/79 appraisal form, and is written by a qualified gemologist (GG, FGA+, or equivalent) 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.

If the jewelry has colored gemstones, the appraiser should be one who is familiar with colored gems and their value in the marketplace.

A buyer at auction pays not only the hammer price but also pays to the auction house a commission based on the price of the piece. So the cost to the buyer is more than the auction price. Be on guard that the insured valuation is for the value of the jewelry, not the cost of the purchase.

NOTE: Jewelry bought through online auction sites or online retailers presents other serious problems for both the buyer and the insurer. Before covering online purchases, see Online Jewelry—Buying it and Insuring it and Appraisal Inflation—It Keeps on Keeping on.


Examine all documents on file. If the jewelry was bought at auction, its value may have changed dramatically from the time of purchase. Use a reliable appraisal description to determine value at time of loss.

Jewelry based on "famous" jewelry usually cannot match the original. Large, high-quality gems are often no longer available — at any price. And the workmanship may not be as good.


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