Insuring Your Diamonds and Jewelry

Hi again,
For many people a diamond ring is one of the biggest purchases of their lifetime, so it is important that you protect your investment. One of the most popular ways to protect your investment is to insure your diamond. Please note that I am NOT an insurance agent so please check with your own insurance agent about all the issues which I am going to describe to you. Also, policies may differ in different states.

You might be surprised to learn that your homeowner’s or renter’s insurance policy probably does not offer full coverage for your engagement ring and other fine jewelry. Your insurance policy probably covers jewelry theft, but not loss that occurs for other reasons. 

Typical Insurance Policies

Renter’s and homeowner’s insurance policies set limits for the loss of certain categories of personal property, including jewelry. Homeowner’s policies typically pay a maximum of $1,000 for jewelry theft. A renter’s insurance policy might have a lower limit for jewelry loss–$500 is common.

Does your insurance policy cover jewelry loss for reasons other than theft–such as for lost or damaged items? Read your policy carefully and ask your insurance agent to clarify the types of losses that are covered on your standard policy.

Additional Jewelry Insurance

 You can usually purchase additional insurance for your fine jewelry, otherwise know as “scheduled personal property,” but be sure to ask your agent questions so that you have a good understanding of the coverage:

• Is there a deductible? If so, how much is it and how does raising or lowering the deductible affect your policy costs? 
• Is an appraisal required prior to obtaining insurance? Are there only certain types of appraisers whose reports are accepted?
• Are the items covered no matter where the loss takes place? Would the policy cover you for a loss that occurs during domestic or international travel? 
• Are items covered for full replacement cost? Must you replace the item, or can you obtain a cash settlement?
• Does the policy cover repairs to damaged jewelry? 

 

There are three types of insurance policies typically offered: 

 

 

• Actual Cash Value, in which the insurance company will give you the actual market value of the diamond in order to replace it.
• Agreed Value, which is a very rare type of policy, in which the insurance company and you the owner, will negotiate on the proper value of the diamond ring or stone.
•  Replacement Value, which is the most common of the three. This is where the insurance company will reimburse you up to a specific amount agreed upon by the two parties when the policy was created. For instance, with a replacement value policy, if you spent 10K on a diamond ring, and the appraiser has confirmed the ring is worth 10K, the insurance company will insure you with a replacement value policy of up to 10K. If the ring is lost or stolen in the future, the insurance company will usually pay up to 10K for the ring.

In order to have your ring insured, you will first need to have it appraised and to send a copy of the professional appraisal to your insurance agent. Besides an appraisal, your insurance agent may request photos of the ring and stones and possibly a gem print which is a computer scan of your diamond ring which makes it easily identifiable if it is stolen. If you are planning on buying a diamond ring or own a diamond ring that is extremely valuable, think seriously about getting insurance.

In the meantime, until next time, Mind Your Diamonds!

Josh Fishman

josh@afishman.com

www.afishman.com

 

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Diamond and Jewelry Appraisals

Hi again,

Anyone who has purchased a diamond or a piece of jewelry has probably thought about getting an appraisal before he makes his purchase. Most likely, you want to know that you are not being overcharged for what you are buying and that the quality of what you are buying is as advertised. 

Or, perhaps you are being told that what you are purchasing will “appraise” for X times what you are paying for it. You feel good about that.  But is that really the truth?  How do you know?  What does it even mean?

Even if you don’t think about getting an appraisal before you make your purchase, you probably will need an appraisal in order to have your jewelry insured in the event of loss or damage. 

It’s SO confusing!

Well, let’s try to simplify the process and figure out what the real purpose of appraisals is. 

There are two purposes for appraisals in the context of purchasing a diamond or piece of fine jewelry. Neither purpose is to make you “feel good” that you bought a bargain. As in the purchase of anything, there is no free lunch. An educated consumer knows that; one of the purposes of Mind Your Diamonds is to make you an educated consumer. A diamond or piece of jewelry sells for what it is worth – considering the place in the chain of distribution where one is making the purchase; that is, are you buying from a retail store, a wholesaler or a manufacturer.

Why are Appraisals Important

1. One purpose is an appraisal before you make a purchase. Here, value (and price) is not the real issue.

This appraisal should be for the sole purpose of assuring yourself that the quality of what you are purchasing is as advertised.

If you are buying a loose diamond, and the diamond is accompanied by a gemological certificate from the Gemological Institute of America (“GIA”) describing the diamond, then you are already more than half-way home.  All you really need to know then is whether the diamond you are buying is the diamond described in the certificate. You don’t need a formal “appraisal” for that. Any reputable jeweler can look at the diamond and determine that for you. [If the certificate is from a laboratory other than the GIA, you have different issues. But that is an entirely different discussion for another time. For the purposes of our discussion I will presume that your diamond is certified by the GIA.] 

In the case of jewelry, especially diamond jewelry, you want to know that the quality of the diamonds contained in the piece is as advertised and that the carat weight is also accurate. While government regulations require a seller to be accurate in the description of diamond weights in jewelry, what are you going to do, take the diamonds out of the piece to weigh them? You do need an independent evaluation of these factors.

2. The second purpose for an appraisal is for insurance purposes.

This appraisal should describe your diamond or piece of jewelry in great detail and give a replacement value, plus perhaps a small additional amount to cover deductibles and inflation for some time in the future. 

For the appraisal of a loose diamond, the appraisal should reference the certificate with all its statistics and identifying features. Without the details, an insurance company may just want to replace the size and grade of the diamond. But there is much more to your diamond than just the grade. You want to replace the look of the diamond too. The dimensions and other characteristics are all part of that, not just the color and clarity of the diamond. 

Where do I go for these Appraisals?

In the case of both of the purposes described above, especially if the person you are buying from is not familiar to you or recommended, you should turn to an independent gemological laboratory to do the appraisal for you. One that does not sell diamonds or jewelry.

If the jeweler from whom you are buying is someone you have trust in, you can rely on that jeweler for your insurance appraisal. In fact, as we do at A. Fishman & Son, there should be no charge for this appraisal. It is simple and easy to do. After all, this jeweler has just sold you your diamond or piece of jewelry and should know all of the details.

What about Value?

The best advice I can give you about assuring yourself that you are paying the “right” price for what you are buying is two-fold.

First, you should educate yourself about what it is that you are buying so that you can truly compare apples with apples. If you are looking at the same “grade” of diamond but with certificates from two different laboratories, then you are not comparing the same thing. Even with certificates from the same laboratory and with the same grade, there can be a significant difference in the desirability of the diamond based on what those diamonds actually look like (See our other Blog entries and our website at Diamond Education.)

Second, and perhaps more importantly, know from whom you are buying. There is no substitute for selecting a reputable jeweler, be it a retailer, wholesaler or manufacturer who is known to be honest. And the best way to assure yourself of that is to get references, and a lot of them, with access so that you can contact them directly to find out their experiences. With that kind of background information you can be comfortable that the jeweler you are working with is dealing with you fairly.

I have an expression which I truly believe in:

“A great diamond at a fair price is a great deal!”

That’s it for now. In the meantime, until next time, Mind Your Diamonds!

Josh Fishman

josh@afishman.com

www.afishman.com

Clarity Enhancement of Diamonds – Part 2 – Fracture Filling

Hi again,

In my previous post about Clarity Enhancement of Diamonds, I discussed the process of Laser Drilling. This time, I am going to cover the much more controversial process know as Clarity Enhanced Diamonds, but more accurately described as Fracture Filling of Diamonds.

Fracture Filling

The fracture-filling of a diamond is a very controversial treatment within the industry — and increasingly among the public as well — due to its radical and impermanent nature. The process involves filling open fractures in a diamond (e.g., large and multiple feathers) with a glass-like substance which will camouflage the visibility of these large feathers. This results in the diamond having an “apparent” clarity grade which is better than it would actually merit without the treatment. In fact, most diamonds which are suitable for the fracture filling process are so imperfect that they run the danger of breaking under stress due to the significant fractures present in the diamond.

Because the filling glass melts at such a low temperature, it easily “sweats” out of a diamond under the heat of a jeweler’s torch; thus routine jewelry repair can lead to a complete degradation of clarity or in some cases shattering, especially if the jeweler is not aware of the treatment. Similarly, a fracture-filled diamond placed in an ultrasonic cleaner may not survive intact. The glass present in fracture-filled diamonds can usually be detected by a trained gemologist under the microscope: the most obvious signs are air bubbles and flow lines within the glass, which are features never seen in untreated diamond.

More dramatic is the so-called “flash effect”, which refers to the bright flashes of color seen when a fracture-filled diamond is rotated; the color of these flashes ranges from an electric blue or purple to an orange or yellow, depending on lighting conditions. One last but important feature of fracture-filled diamonds is the color of the glass itself: it is often a yellowish to brownish, and along with being highly visible in transmitted light, it can significantly impact the overall color of the diamond. Indeed, it is not unusual for a diamond to fall an entire color grade after fracture-filling. For this reason fracture-filling is normally only applied to stones whose size is large enough to justify the treatment: however, stones as small as 0.02 carats have been fracture-filled. This is an important factor in the very low price of some diamond jewelry products too, for example, tennis bracelets.

It is notable that most major gemological laboratories, including that of the influential GIA Diamond Trading Lab, refuse to issue certificates for fracture-filled diamonds. However, there are other Labs that do certify these diamonds so it is important to know what Lab is issuing the certificate on a particular diamond.

Fracture-filled diamonds with a specific “apparent” clarity grade sell at a very significant discount compared to what I like to describe as a “real” diamond of the same clarity grade will sell at. For a buyer who is uninformed, it may appear to be a bargain. It is not!

At A. Fishman & Son, we do not sell or otherwise deal in fracture-filled diamonds. We do not consider it worthy of any investment of our money and we recommend that our customers do the same.

What Should You Do?

The World Federation of Diamond Bourses and government agencies such as the United States Federal Trade Commission explicitly require the disclosure of most diamond treatments at the time of sale. Some treatments, particularly those applied to clarity, remain highly controversial within the industry — this arises from the traditional notion that diamond holds a unique or “sacred” place among the gemstones, and should not be treated too radically.

While, as noted in my post on laser-drilled diamonds, there is a distinct difference between laser-drilled diamonds and fracture-filled diamonds, our recommendation is to stay away from diamonds with either type of treatment. I say this with regard to laser-drilled diamonds not because I place them in the same category as fracture-filled diamonds. I don’t. But because in today’s market a laser-drilled diamond is a very difficult diamond to sell or trade-up for a better diamond and you are better off buying a better quality, smaller diamond, than a larger one which has been laser-drilled. In no uncertain terms should you ever purchase a fracture-filled diamond!

In the meantime, until next time, Mind Your Diamonds!

Josh Fishman

josh@afishman.com

www.afishman.com

Clarity Enhancement of Diamonds – Part 1 – Laser Drilling

 

Hi Again,
I am going to discuss the important subject of Clarity Enhancement of Diamonds. It is a long but important discussion and well worth your time to educate yourself on this issue.

The clarity, or purity, of a diamond — the relative or apparent severity of flaws within the stone — has, like the other “four Cs”, a strong bearing on the evaluation of a diamond’s worth. The most common flaws, or inclusions, seen in diamonds are fractures (commonly called feathers, due to their feathery whitish appearance), and solid foreign crystals within the diamond; such as garnet, diopside, carbon or even other diamonds. The size, color, and position of inclusions can reduce the value of a diamond, especially when other gemological characteristics are good. Those who prepare diamonds for sale sometimes choose to reduce the visual impact of inclusions through oe or more of a variety of treatments.

This discussion will focus on the two major forms of “enhancements:” Laser Drilling and Fracture Filling. There is a big difference between these two methods of improving the look of a diamond as will be described. In this post I will discuss Laser Drilling of Diamonds. In my next post, I will discuss Fracture Filling of Diamonds.

Laser Drilling of Diamonds

The development of laser drilling techniques on a microscopic scale, has enabled diamond manufacturers and cutters to selectively target and either remove or significantly reduce the visibility of crystal or iron oxide-stained fracture inclusions. Diamonds have been laser-drilled since at least the mid-1980s. Most often it is used to whiten a black carbon crystal which is prominently visible in the diamond to the naked eye. Since the development of the laser drilling technique, and until more recently, laser drilling was an accepted part of the diamond manufacturing process. It is still used today on diamonds which have a significant presence of black carbon crystals imbedded in the diamond.

The drilling process involves the use of an infrared laser to bore very fine holes, or tubes, into a diamond to create a route of access to an inclusion. Once the included crystal has been reached by the drill, the diamond is immersed in sulfuric acid and the acid travels down the tube to dissolve the carbon crystal or iron oxide staining.

Several inclusions can be thus removed from the same diamond, and under microscopic inspection the fine bore holes are readily detectable, usually when the diamond is viewed from the side or bottom of the diamond.

Unlike fracture-filling (to be described in my next post), a laser drill hole is considered by the Gemological Institute of America’s Diamond Trade Laboratory to be an internal inclusion which is marked on their certificates just like other inclusions such as feathers, clouds and crystals. This is because the process of laser-drilling is a permanent process. In contrast to fracture-filled diamonds, the GIA does issue their certificates (called “Diamond Grading Reports”) for diamonds which have laser drill holes in them. The following is a direct quotation from GIA’s website concerning the range of diamonds for which the GIA Laboratory will and will not issue certificates.  

“GIA Diamond Grading Reports are not issued for synthetics, simulants, mounted diamonds or those that have undergone unstable treatments, such as fracture filling or coating. And while reports may be issued for diamonds that have been laser drilled or HPHT* processed, these stable treatments are prominently disclosed on the report.” [Emphasis added] *HPHT is a synthetic process designed to artificially improve the color of a diamond.

A diamond which is certified but which has a laser drill hole as one of its inclusions is not as valuable as another diamond of the same grade which does not have a laser drill hole. At A. Fishman & Son, we do not sell diamonds with laser drill holes.

My next post will cover Fracture Filling enhancements, a much more controversial method of enhancement, and what you, a diamond purchaser, should do when you go to buy a diamond.

So, in the meantime, until next time, Mind Your Diamonds!

Josh Fishman

josh@afishman.com

www.afishman.com