October 2018

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

2024

Gems aren't only in jewelry - January

A new switcheroo - February

Diamond deflation - March

2023

Exploring the 4 Cs: Carat Weight & Cut are a team - January

Beautiful gems — but not always in jewelry - February

Rapaport's New Year Message - March

New technology, new standards for diamond cut - April

Wedding season has a new star - May

Lab-Grown Colored Gems - June

Price, value, valuation ... and limit of liability - July

Lab-Grown Diamonds – now and into the future - August

Fake diamond certificates – recurring scams and a strange new one - September

Mined or lab-made? - October

Fraud catcher: the sales receipt - November

2022

What's up with diamonds? Prices! - January

Ferreting out the Fakes - February

Vodka, caviar . . . and diamonds? - March

Conflict of Interest - April

Under the "covers" - May

Agents: Do you know who you're doing business with? - June

Brand-name fakes: a tale of jewelry, duplicity, and international intrigue - July

What is insurable jewelry? - August

Vintage Rolexes - September

Lab-Made Diamonds in the Fast Lane - October

Exploring the 4 Cs: Color – more complex than you may think - November

Exploring the 4 Cs: Clarity – for all transparent gems - December

 

2021

High-end jewelry & its docs - January

Where is gold going? - February

Hot off the press: Imposter diamonds & forged inscriptions - March

Jewelry insurers’ ethics - April

Can you spot a forgery? - May

Green Diamonds - June

Is the appraisal good enough? And is it enough? - July

Men’s Jewelry—Passing fad or wave of the future? - August

Jewelry appraisals — watches vs. jewels - September

Replacements & CAD/CAM - October

Lab-Grown Diamonds are coming your way - November

How important is the picture? Very! - December

2020

2020 Fraud Alert! Fake Lab Reports - January

Is it worth its weight in gold? - February

Grading lab-made diamonds - March

Safety deposit boxes - April

Evaluating a jewelry appraisal - May

Verifying the Lab Report - June

When you need a jewelry appraisal, what do you do? - July

Calling a diamond a diamond - August

Diamond clarity meets Artificial Intelligence - September

Mined or Lab-made: Who knows? - October

Covid 19 & jewelry insurance - November

Gem Enhancement’s slippery slope - December

2019

Gem Certificates again at issue - January

Yogo sapphires – What's in a name? - February

Lab-made diamonds: pricing, grading, valuation - March

What is an "eco-friendly" diamond? - April

GIA report: What's left out - May

A tale from the Caribbean - June

Lab-Grown diamonds are taking off - July

Brand impersonators & counterfeit jewelry - August

Lab reports for colored gems - September

FTC Guidelines for jewelry - October

Selling Salvage Jewelry - November

What's in a name—a brand name, that is? - December

2018

What's a Certified Appraiser? - January

Best Appraiser Credentials - February

Are the diamonds you’re insuring real? - March

Handwritten Appraisals - April

Internet Tips for Jewelry Insurers - May

De Beers will sell lab-grown diamonds - June

Do genuine gemstones break? - July

Luxury Watches - August

Who owns the ring? - September

Insuring Bling - October

The Price of a Replacement - November

Love Is In The Air - December

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

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

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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Insuring Bling

If that picture caught your eye, that's exactly what bling is meant to do.

Bling is showy. Flashy. Ostentatious. If sparkle made a sound, it would be Bling!

Well, what's wrong with eye-catching jewelry? Let's take an insurer's look at bling.

Bling bling—or its shortened form, bling—draws attention. An important role of bling jewelry is to display the wealth and success of the wearer. Though cheap bling (heaped with CZ, for example) may just be showy, bling encrusted with diamond can be expensive.

Aside from the usual attention required for insuring high-value jewelry, bling is a special case requiring additional caution.

 

The insurer experience

Underwriters received an application for insurance on six jewelry items, including necklaces, a pendant, a bracelet and a Rolex. A photo of the jewelry was included with the application. The total value of the jewelry was given as $176,899.

The insurer took one look at the application and decided to decline coverage. The jewelry was bling.

Photo from submission

Here's the fuller story:

The submission included a single photo, showing parts of all 6 pieces.  It was a poor-quality photo, a rather casual shot.

Accompanying the submission was a 10-second video clip of a pendant, presumably like the one in the photo. The screen carried the seller's name, in a format suggesting the clip had been lifted from Instagram. The applicant gave that seller as the source for other pieces as well.

What's wrong here? A video on Instagram is done to catch the eye, not to show jewelry details. An online video from a seller is no proof that the applicant owned the jewelry. A video, even a decent one, is a clumsy thing for showing jewelry details and it's difficult, if not impossible, for insurers to store and use.

Image from submission video

Another serious problem: who is the seller? The seller named on the video and on the application for insurance has no Internet site nor any apparent brick-and-mortal location.

Also submitted was a 30-second cell phone video clip of the gem-laden watch being displayed on the owner's wrist. The darkness of the video, and the dance music playing in the background!, suggested the filming occurred at a nightclub.

The jewelry was bling, and it was out on the town!

As we've pointed out before, bling attracts attention, and bling on a Rolex attracts even more. It's often entertainers, athletes, celebrities — and those who aspire to hobnob in that crowd — who go in for extravagant jewelry. Surrounded by enthusiastic fans or crowds in high spirits, they may become less cautious about the safety of their jewelry. Nightclubbing, walking the streets in the small hours, can be risky business, and flashy jewelry is an easy target for thieves. 

Watch iced out in CZ selling for $150 on Internet

A lifestyle that puts the jewelry at increased risk is reason enough for an insurer to be wary, and there was more justification for declining coverage in this case. The client represented this jewelry as expensive, but how do we know? All that glitters is not gold.  Or diamond.  Or valuable. Iced-out bling is available on the internet for under $100.

This submission had no appraisals to describe the jewelry's quality and verify its value. There was no evidence at all that the stones being passed off as diamonds were not some cheap imitation, such as cubic zirconia.

If the sale originated in response to an Instagram post, the seller may well have given the buyer inflated valuations for the jewelry, and may also have exaggerated the jewelry's quality.

It is frequently the case, especially with internet purchases, that the seller inflates the valuation of jewelry to far beyond the purchase price. Our earlier issues, Valuation inflation keeps on keeping on and Moral hazard – alive and well, give examples of this practice and discuss the problems it creates for insurers.

In this case, the insurer had only the client's word even for the purchase price. The client stated that the jewelry had not been previously insured. Yet if this was all new jewelry, why were there no sales receipts? Since the seller seemed dubious, it's possible that the jewelry was a gift or payment in kind, and there are no docs. And that would make the stated values even more suspect.

There was also no warrantee paper for the Rolex. Counterfeit watches are big business! All name-brand watches sold by authorized dealers come with a warrantee, and an insurer would be foolish to cover an expensive luxury watch without this evidence of authenticity.

The name of the seller of this watch had no internet presence, so it's more than likely the watch had after-market additions or fake parts, or it may well have been a complete knock-off. See Frankenwatches for a real Halloween scare story!

 

FOR AGENTS & UNDERWRITERS

Bling is showy. It signals status and is typically worn in venues where it will be widely seen. That means increased risk of theft.

Some insurers choose not to cover jewelry worn by entertainers, athletes and others whose lifestyle makes their jewelry an easy target for thieves. Other insurers will cover such jewelry but are able to charge a higher premium to offset the increased exposure.

Never insure high-value jewelry without an appraisal from a trained gemologist who is independent of the seller. 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.

10:1

Annual production of
fake Rolexes to
authentic Rolexes

Any gems on the watch, and the metal of each watch part, should be described in the same detail as for any other piece of gem jewelry. As you can imagine, detailed reporting on a watch encrusted with gems is extremely important to insurers.

The loss ratio for men's jewelry is much worse than for women's. And a watch, usually a Rolex, is the most frequently scheduled item of men's jewelry.

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

ALWAYS ask for Rolex warrantee papers and a sales receipt. A new Rolex must come from an authorized dealer in that brand; otherwise it will not be considered "new" by Rolex, and it may even be a complete counterfeit.

Check out 12 Reasons not to insure a Rolex, to be sure you are acquainted with the issues around insuring this popular brand.

 

FOR ADJUSTERS

Be mindful of the moral hazard of excessively high valuations, which can cause the insured to try to come out ahead by "losing" the jewelry. 

Though claims on luxury watches are relatively infrequent, they can be expensive. To guard against fraud:

P.S. Not all bling is on jewelry . . . but we're only discussing jewelry here.

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