Below are some examples of appraisals and other documentation which you should be aware of....and wary of. These are just a few examples of some rather famous names in gemological appraisals and evaluations, who are actually doing a less than adequate job with their documentation. The key to this section is to let you know that simply because you get what appears to be a qualified evaluation appraisal document, in the current jewelry industry there are some really bad appraisals being accepted by insurance companies, that are resulting in some fairly high rates of fraud. Mainly because the documents appear so official and proper....yet the very nature of the documents leaves you, the insurance company, open to claims due to the lack of information contained in these documents. Let's look at a few.

 International Gemological Information or IGI

Great care should be given when considering an IGI appraisal for binding coverage. Mainly because the information is so nebulous as to what the grading actually is on the diamond. As you can see at left, this is a single diamond of .37ct. But it has a clarity grade listed as VS2 - SI1. We don't know which one but it is one of the two. Same for color grading at H to I. This leaves completely open the question about the actual grade of the diamond. Is is a VS2/H or a SI1/H? Perhaps a VS2/I or a SI1/I? We don't know.

The reason the IGI does this is to help the seller. Using this document the seller can say they are giving the customer a VS2/H, charge them for a VS2/H...yet only deliver a SI1/I. A far lower value diamond. But the real problem is when there is a loss. You, the insurer, may well be stuck replacing a SI1/I grade diamond with a VS2/H grade diamond because of this IGI appraisal document. So be very wary of this document with split grades whenever you see one submitted for coverage.

 USGL

This is one of the most interesting cases I have found. You can see at top that this emerald is a very low quality, promotional type gemstone. These stones sell in the $200.00 per carat range at best. Yet the certificate from the USGL states that the value is almost $4,000.00. The item actually sold for around $900.00. But with this certificate, the customer can get it insured for $4.000.00. This leaves open a great tendency to promote insurance fraud. And once accepted by the insurance company, it is very difficult to deal with the situation after a claim is filed.

Not also that the color and clarity grades are simply listed as "Good" and "Good". No proper gemological quality grading scale used by these people who make such an official looking appraisal document.

This situation turned out to be where this case got weird...

 Notice that at left we have yet another item of rather low, promotional quality. These "rubies" are actually more purple sapphire color, and the clarity of the stones is so bad that they are opaque....not gem quality at all.

But...once again we have a USGL certificate appraising this item at a whopping $9,600.00 dollars. This item sold for around $1500.00. Which would be the normal value for an item of this quality. But the insurance company would see this and issue coverage of over $9,600.00 based on the impressive looking appraisal document.

And also please notice that once again, in spite of having low promotional quality stones, the listed quality for the color and clarity are simply "Good" and "Good".

This is another example of a appraisal company issuing this document on behalf of the seller. It was done at the request of the seller, paid for by the seller, and used during that sales pitch to supposedly prove the real "value" of the item to the buyer.

And once again, this kind of practice is one of the main reasons that insurance fraud regarding jewelry claims is on the rise.

 European Gemological Lab

This is a combination of problems. First the purpose of a photograph in a proper jewelry appraisal is to show (1) that the item actually existed on the date of the appraisal, (2) the design of the item if replacement is needed, and (3) that the appraiser actually inspected the item.

None of those three are present with the case shown at left. Notice the difference in the actual item and the photograph on the certificate above. They are not even close. The diamond in the certificate is obviously not of a I2 clarity listed on the certificate. And the actual diamond is indeed a I2 but does not look like the photo in the certificate.

Therefore, we do not know if:

• The item was ever in the appraisers office,
• If the item is lost what it actually looked like, and
• If the appraiser actually had the item to grade

This practice by the EGL leaves insurance companies open to serious problems in the case of claims. Because based on the FTC Guides, the photograph becomes a record document of the representation of the item. And if you accept this representation made through the photograph of the item, you would have to replace it with something that looked like the photograph....quality and all.

But....it gets better....

This is not a situation that occurs occasionally with the EGL certificates. It happens all the time. Notice at the photograph and diamond ring at left. The certificate was listed on eBay as being the cert for this diamond. The photograph does not come close to even the design of the ring. According to the FTC under CFR Title 16, Section 23, this is a deceptive trade practice to offer a photograph that is supposed to be of the actual item but is not.

And.....

Every item from EGL that we found....was found to simply be using the same photograph over and over and over again. Not once did we actually find a photograph on their appraisal documents that was actually of the item.

And once again...these documents are being produced for the seller, with the seller paying the tab, and the document being used to claim discount prices by the seller.

And once again, the insurance company is in the middle with a serious proclivity for some people to commit fraud due to the wide differences between the buying price and the appraised value.

If you have appraisals that appear to be lacking in quality in formation, contact us at Jewelry Adjuster. We provide NO COST assistance to underwriters on any issue involving binding coverage for jewelry and gemstones.