Lab-grown diamonds and insurance

Diamonds may be a girl’s best friend, but lab-grown diamonds are rapidly increasing in popularity. But is their quality as good as natural diamonds? What are the valuation implications for insurance? Natasha Root, Private Client Insurance Executive, explains some of the things to look out for.

20 September 2023 - Natasha Root

Are lab-grown diamonds the future?

The idea of creating diamonds artificially goes back for several hundred years, but it wasn’t until the middle of the twentieth century that they started to be produced synthetically at gem-quality standards. Since then, the methods of creating lab-grown diamonds have been greatly refined, and they can now be produced in their thousands, accounting for around 10% of all diamond sales; the market is expected to double to £44 billion by 2031.

The differences between synthetic and natural diamonds

Both natural and synthetic diamonds are formed from pure carbon. The difference is that whilst a natural diamond is between 1 billion and 3.5 billion years old, and is found between 93 and 155 miles underground, lab-grown diamonds are produced in a matter of weeks in a laboratory using a process which simulates the intense heat and pressure required to create a natural diamond.

To the naked eye there is no difference between a lab-grown and a naturally mined diamond, and it requires professional laboratory analysis to tell them apart. While natural diamonds will sometimes have tiny internal flaws that have occurred during their formation, their synthetic equivalents will have been created through a highly controlled process designed to minimise defects. Some synthetic diamonds are even harder than their natural counterparts, and the laboratory procedure means they also can be created in colours that almost never occur naturally, such as blue, green and orange.

For insurance purposes it is important to have documentation from a recognised, authorised and independent gemmological source, which will verify the gem’s quality and characteristics; this applies to both natural and synthetic diamonds.

Why are natural diamonds more valuable?

The most obvious reason for the price differential is availability. Naturally-occurring diamonds are a finite resource, the supply of which will continue to deplete for as long as people want to possess them. They are difficult and costly to mine, whereas lab-grown diamonds can be created quickly and (relatively) cheaply in ever-increasing quantities. De Beers, best known as the world’s largest diamond miner, launched its own synthetic diamond brand Lightbox Jewellery in 2018. Another big lab-grown diamond manufacturer, Diamond Foundry is due to open a new factory Spain in 2024 which will be able to produce up to 10 million carats of lab-grown diamonds every year.

As a consequence, there is a large price difference between the two types of diamonds. Rachel Boston, an East London-based jewellery brand says that the lab-grown diamonds she uses in her designs can cost at least 50% less than natural diamonds, although this will vary depending on the size and cut of the diamond (the larger the diamond, the greater the price differential). Rachel quotes the cost of a GIA certified 0.75ct natural diamond at £6750, compared to a GIA certified 0.75ct lab-grown diamond at £2800.

Insure your diamonds properly

It is likely that your insurer will require a certificate or other documentation before adding diamonds to your policy, or in the event of you making a claim. As specialist insurance brokers for high-net-worth clients we recommend:

  • Making sure your jewellery is valued on a regular basis – we can suggest professional valuers to our clients
  • Obtain an authorised certificate from the valuations firm for your diamonds, whether natural or synthetic, which gives a clear description of the item, the stones used and their cut, colour, clarity and carat
  • Keep your jewellery in a cash-rated safe, which has been approved and installed by a recognised safe installation firm

Scrutton Bland’s Private Client service includes specialist insurance advice, individually tailored to you. We appreciate that every client is unique, and so too are the bespoke advice and recommendations we make. Our Private Client advisers will take the time to understand precisely what you need and then use their experience and expertise to identify the type of cover you need and negotiate premiums you can afford.

To find out more about insuring your jewellery collection please contact Natasha by emailing or calling 0330 058 6559.









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