Insurance For Lab Grown Diamonds: The Pros n Cons

The pros and cons of lab grown diamonds are as much about future value, as they are about saving the planet and going green. Let’s start with the obvious here; royalty, celebs and the super rich generally don’t bother with lab grown diamond jewellery. They know that the enduring worth of well cut, high grade, professionally polished and jeweller set diamonds is always going to be higher than lab grown. Often it’s about buying into a luxury brand too, like Cartier, De Beers, Van Cleef and Arpels, Harry Winston, Bulgari etc. You don’t see those brands making a big song and dance about which laboratory their diamonds came from do you?

So real diamonds will probably always have a higher value, carat for carat and colour for colour, than lab grown – even though lab diamonds are often flawless and bright “white” to look at.

But then there’s the corruption, slavery and mining operations that go with “real” diamonds. Plus global product miles. Hard to calculate the carbon footprint exactly, but 1-5ct diamond set is likely to generate higher emissions than the vast amounts of electricity used to create artificial diamonds in a lab. No drilling machinery, mine workers, security, transit to Antwerp for washing, grading, polishing etc. Or bribes to dodgy dicators for mining licences.

ESG isn’t all about trees n turbines is it? There is a more trackable supply chain with lab diamonds and it generally doesn’t involve slave labour, bribery and corrupt politicians. On balance, lab diamonds are the more woke, progressive option, so you should support ESG values by buying them.

But what about placing an insurance valuation on a diamond set, engagement ring or bracelet? Well high net worth insurer NFU Mutual says the increasing popularity of lab grown diamonds makes certification vital, as prices for natural and lab grown varieties differ greatly. So yes, you need that certificate at the point of purchase to make sure insurance cover matches the value.

Jewellery expert and Fellow of the Jewellery Valuers Association, Lynn Tones, provides the example of a one carat natural diamond ring, valued at over £15,000, and an identical one carat lab grown diamond ring valued at under £7,000.

Dawn Blazier, Head of Bespoke Insurance at NFU Mutual, explains:

“The key thing here is scarcity. The high value of natural diamonds is due in large part to the fact they are a finite resource, whereas lab grown diamonds can be quickly produced and will likely decrease in relative value as more and more are made. Given the similarity between natural and lab grown stones, this makes retaining or getting certification or accurate valuation all the more important. If you lose a natural diamond you will not want it replaced with a lab grown diamond, and similarly it is important that it is insured for the true value.

“But it works both ways – if you are insuring a lab grown diamond, you will not want to pay more than you need to, given the replacement will be much lower than a natural diamond.

“For insurers, and this is something we are doing at NFU Mutual, it is vital that we are aware of this new industry and make sure customers provide certification where possible and regular valuation, allowing us to adequately protect their most treasured possessions.”