September 2017

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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Moral Hazards on the rise

Inflated appraisals, a persistent problem, have now become grossly inflated appraisals. Bogus gem labs proliferate. Markets for gems and precious metals fluctuate. And bargain enthusiasm often runs free of comparison shopping.

It is the insurer's responsibility to reduce moral hazard.

Here are a few situations where jewelry owners may be tempted to recoup their losses, or turn a profit, via an insurance claim.

Ship of the fooled

People tend to spend freely on vacation. Jewelry retailers at tourist spots and on cruise ships know they can inflate quality and valuation with no repercussions. Customers on holiday have probably done no comparison shopping. Or if they have, it was at stores with a common ownership, stores owned by the same company but operating under different names. (Cruise destinations and shopping malls are filled with such stores!)

The typical vacationer won't be able to get an independent appraisal before leaving town, and he cannot rely on the ethics or reputation of a retailer unknown to him. If a problem arises later, the customer has little recourse—the seller is far away, or may have relocated, or maybe there's not even a phone number on the receipt.  Danger: Moral Hazard

Prevention: For vacation jewelry, require an appraisal from a qualified gemologist before insuring. You want to base insurance on the jewelry's true quality and value, not on a sales pitch.  (See below for proper appraisals and appraiser qualifications.)

The rush to buy

TV shopping channels and online auctions pressure potential customers to ACT NOW! in order to get the best price. These promotions usually leave out crucial quality information, even in the documents they supply to the customer. The customer may believe those claims of "60% off" the regular selling price, but the insurer should not! Danger: Moral Hazard

Prevention: Before insuring jewelry purchased online, from a TV shopping channel, at a flea market, or from any other non-standard jewelry retailer, ask for an appraisal from a qualified gemologist appraiser.


Most retailers these days claim their stones are "certified," but that term is meaningless. The lab reports or other documents that accompany purchases may come from notoriously unreliable labs, unknown labs, or even bogus labs with no street address or internet presence. Such documents may exaggerate the jewelry's quality and list a value far higher than the selling price, but these docs are just sales tools to excite buyers. Danger: Moral Hazard

Prevention:  Rely only on reports from the following respected labs. Also: when you receive a report from one of these labs, you can use these links to verify the authenticity of the report.

GCAL Certificate Search
AGS Report Verification

NOTE, however, that even reputable labs offer various reports at different prices: the more information that's included, the higher the report's price. A retailer who gives a lab report with each purchase is likely to choose a less expensive, less complete, version. To be most useful, the insurer should have the lab's top-of-the-line report.


The shifting market

For a while the price of gold rose steadily, making gold a good investment. But around 2013 it began to fall. Gold jewelry purchased at gold's peak would have a lower value a few years later. Such fluctuations are also found in the diamond market. If the jewelry owner follows the market, he might decide at some point it would be profitable to "lose" that ring. Danger: Moral Hazard

Prevention: Require valuation updates every couple of years (and adjust premiums accordingly).

Appraisal from the seller

Fracture-filling means a huge value difference

Many jewelry retailers give customers an appraisal written by the store's owner or employee, or by an appraiser contracted with the store, such as one who sets up in the store on a store-sponsored appraisal day. Such an appraisal and valuation should not be taken at face value, since we would expect a store-supplied document to substantiate what the seller said about the jewelry.  Also, brick-and-mortar stores may deliberately omit quality information that would lower the valuation of the jewelry, so they can compete with low prices offered by online sellers. In many cases, the appraised valuation is significantly higher than what the customer pays.  Danger: Moral Hazard

Prevention:  Ask the insured for an appraisal from an appraiser independent of the seller (which also means: one not recommended or sponsored by the seller).  Also, ask for the sales receipt, as the jewelry's selling price is generally a more accurate reflection of its value.

What is that gem, really?

Color treatment means a huge value difference

Was it made in a lab, rather than mined? Is it fracture-filled? Is it color-treated? Is it cut to poor proportions? What is the weight of gold jewelry? What is its karatage?  Each of these factors will significantly affect jewelry's value. If such details are not disclosed on the appraisal, the jewelry may have a valuation significantly higher than it's true worth.  Danger: Moral Hazard

Prevention: Require a detailed appraisal from a qualified gemologist appraiser.


Appraisals and Appraiser Credentials

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.

The JISO (formerly ACORD) standards are designed to protect insurers from jewelry insurance fraud. If the appraiser is not a GG and CIA, at least require JISO 806, Jewelry Document for Insurance Purposes, which can be completed by any appraiser. Then score the appraisal for insurance to value (ITV), to verify that the stated valuation is reasonable.


Always ask for the sales receipt. If there is a large discrepancy between the purchase price and the appraised valuation, the purchase price is usually a more accurate indication of value.

We cannot emphasize strongly enough the need to check appraisals and lab reports for information about gem treatments. Look for these terms: treated, enhanced, composite, fracture-filled. A color-treated or clarity-treated gem has a lower value than an untreated gem of similar appearance.

If there are no treatments, the appraisal should explicitly state that the stone is untreated. This lets you know the appraiser has made a determination and not simply overlooked or avoided the issue of treatments.

Also look for terms that denote lab-made stones, such as: grown, lab-grown, synthesized, man-made. Lab-made diamonds are real diamond, but they have a lower valuation that mined diamonds.

All jewelry of substantial value should have a report from one of these reliable labs. Use these links to check the authenticity of reports you receive.

GCAL Certificate Search
AGS Report Verifcation


Be aware of metal and gem market fluctuations. Settlement is based on valuation at time of loss.

Check all documents for terms indicating lab-made stones or terms describing gem treatments.



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