Diamond enhancements are treatments done to improve the appearance of the stone. Don’t be fooled into thinking they improve the value of the diamond.
Jewelry fraud can be either blatant or subtle. Blatant fraud is the kind that makes the papers, like a retailer selling CZ and calling it diamond.
But there are subtler frauds, disclosure of enhancements on the appraisal is essential because:
Enhancements lower the value of a diamond. A buyer might be led to believe an enhanced diamond is comparable in value to an untreated diamond of similar appearance, but that is not the case.
This is especially true for fancy colored diamonds, as natural fancies have many times the value of color-treated fancies. Some treatments are not permanent. A buyer may not be informed of this or may not understand the consequences.
If a fracture filling deteriorates, the fracture will reappear. This is due to inherent vice and is not “damage” for which the insurer is liable.
Color-treated diamonds can be affected by various conditions. For example, color produced by irradiation may change if the stone is subjected to high heat, as from a jeweler’s torch. Such a change is not “damage” for which the insurer is liable.
Enhancement can disguise a flaw but not eliminate it.
Filling a fracture with foreign material does not make the stone solid diamond. If treatments are not disclosed, a settlement could result in gross overpayment.
A diamond could break because a fracture filling failed. If the treatment were not disclosed, the insurer could pay a claim that wasn’t an insured loss at all—just a treatment that vaporized!
What about an Insurance cash settlement?
Consumers often assume that, in the event of a claim, they will get the insured value in cash—and if that value is inflated, they’ll even come out ahead.
Jewelry Judge Ben Gordon explains “That this is not the case! In a cash settlement, you would receive the amount that it would cost the insurer to replace the jewelry at time of loss, and that cost is based on the jewelry itself, as described in the appraisal, not on the possibly inflated valuation.
It’s important to know whether the insurance company even offers cash settlements. Cash is an option most insureds expect, but may not think to ask about until a loss occurs. Typical insurers will only repair or replace the jewelry, and that repair/replace business will likely go to a jeweler who has previously agreed to recommend this insurer to the store’s customers.
Consult the Jewelry Judge for all the answers to your questions!
Knowledge you can trust.