CRAZED OPALS
And if you thought that opals crazing was a onetime shot, here is a state Supreme Case.
"Recovery is sought for a fire opal valued at $2,000, because, according to the complaint, while the policy was in force, 'the opal . . . became cracked.' It 'was not cracked at the time said policy of insurance became effective but developed said crack after said policy became effective but during the time it was in force.' Then, with commendable candor, the complaint avers 'that said crack was due to an inherent vice in said opal and was not the result of outside force.' The one question is thus plainly apparent - Can there be recovery for mere cracking arising from an inherent defect or tendency of the insured property and not at all from extraneous and fortuitous cause? According to a work on 'Gems and Precious Stones of North America' (George F. Kunz, 293), quoted by counsel for plaintiff, fire opals are as 'sensitive' as they are gorgeous. They have a tendency to 'fissures' and, with 'only a small loss of color, have become entirely flawed, the cracks being such as to render the stones unfit for setting, since they are liable to break.'
The diligence of counsel has failed to furnish us any case in point or even of much help except those arising on policies of marine insurance. But they furnish, we think, a fair analogy. The contract is an 'all risk' policy, and of a kind which characterizes marine insurance more than any other. The rule of marine insurance is that, under such a policy, the insurer is not liable 'for losses resulting from inherent vice, defect, or infirmity in the subject-matter insured.' 38 C. J. 1097. In Arnould on Marine Insurance (11th Ed.) § 778, it is put thus: ' . . . The underwriter is not liable for that loss or deterioration which arises solely from a principle of decay or corruption inherent in the subject insured, or, as the phrase is, from its proper vice; as when fruit becomes rotten, or flour heats, or wine turns sour, not from external damage but entirely from internal decomposition.'"1
Here we go again!
An insured sued an insurer - over insured opals that crazed. The policy contained a scheduled personal property endorsement or rider specifically covering certain opal jewelry. The inured stored the opals at home in a separate jewelry box, and she wore the opals an average of 5 to 10 times per year.
The insurer denied liability. The policies relevant exclusions were "wear and tear, marring, deterioration, inherent vice, latent defect, and mechanical breakdown." The insured argued that the insurance company knew or should have known of potential losses due to crazing and if it was the intent to exclude those losses, the exclusion provision should have so stated.
The court stated, "Therefore, absent some indication the crazing was caused by an outside force, we must assume it was caused by an inherent defect or tendency within the opals and not from an extraneous and fortuitous cause."2
The court did not make the insurance company pay.
Now (drum roll) for the appraiser angle:
There was an exclusion named "inherent vice" (see above). Opals have a natural tendency to craze and that is what inherent vice means. One of the 'value elements' of an opal is whether it is crazed. One must always state all value elements, whether positive or negative. How does one adjust the value if crazing exists?
Written by Bill Hoefer
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1. 172 Minn. 13, 214 N.W. 473, 55 A.L.R. 938, 1927 A.M.C. 1285. Back to Text ↑ ↑ ↑
2. 24 Kan.App.2d 810, 954 P.2d 7. Back to Text ↑ ↑ ↑
3. Illustrations - IStock.com.
4. Illustration - Antique post card owned by author.