Insurance hassles helped Elizabeth Taylor’s famous diamond lose its sparkle

For legendary actress Elizabeth Taylor, the more than 69-carat diamond that once graced her neckline was an insurance albatross.

As author Alexandar Walker explained in his book “Elizabeth: The Life of Elizabeth Taylor,” the insurance coverage required for the necklace — adorned by the famous Taylor-Burton Diamond — “only tightened the screw on Elizabeth’s freedom of movement.”

Taylor died March 23, 2011, at age 79.

A Cartier necklace with the more than 69-carat Taylor-Burton Diamond drapes the neck of Elizabeth Taylor.

No American insurance company would write a policy for the necklace in the late 1960s, Walker wrote. Lloyd’s of London agreed to issue a $1.2 million policy with a $75,000 premium. However, Lloyd’s of London set some strict ground rules for the pricey jewelry, according to Walker:

• The necklace had to be kept in a vault when not on Taylor’s neck.

• Taylor could wear the necklace only 30 days in a given year.

• Armed guards had to be present when Taylor wore the necklace in public.

Cartier, the high-end jeweler, sold the pear-shaped diamond in 1969 to Taylor and her then-husband, actor Richard Burton, for $1.1 million.

“Originally, I wore the diamond as a ring, but even for me it was too big, so we had Cartier design a necklace. I’m still sick that I sold it some years later,” Taylor wrote in her book “My Love Affair with Jewelry.”

The ring starred along with Taylor and Burton in an episode of TV’s “Here’s Lucy,” according to DameElizabethTaylor.com. It also was at the heart of an exchange between Taylor and England’s Princess Margaret, according to the website.

“Is that the famous diamond? But it’s so large — how very vulgar!” the princess exclaimed.

“Yes,” Taylor replied. “Ain’t it great?”

The princess then asked to try on the enormous rock. “It doesn’t look so vulgar now, does it?” Taylor said.

Taylor was first spotted wearing the diamond suspended from a necklace in 1969 at Princess Grace’s 40th birthday party in Monte Carlo, according to media reports. The following year, she wore it to the Academy Awards. The gem became a symbol of Taylor and Burton’s “larger-than-life presence,” according to TopTenz.net.

Following Taylor’s second divorce from Burton, the actress put the Taylor-Burton Diamond up for sale in 1978. The insurance company demanded a large fee to protect the stone against theft. To underwrite the premiums, Taylor charged each prospective buyer $2,000 per view, according to “The Last Empire: De Beers, Diamonds, and the World,” a book by Stefan Kanfer.

A year later, New York jeweler Henry Lambert bought the diamond. Various reports put the purchase price between $2 million and $5 million. Taylor donated some of the proceeds for construction of a hospital in Botswana and sunk much of the money into then-husband John Warner’s U.S. Senate campaign.

Taking into consideration 10 years of insurance costs plus inflation, Taylor actually took a loss on the sale of the gem, according to Kanfer’s book.

Lambert turned around and sold the diamond to jewel mogul Robert Mouawad, who still owns it.

“It was large and very heavy,” Taylor reportedly said of the diamond after she sold it. “Anyway, I hadn’t worn it for ages. It represented a different phase in my life, the fun and camp phase.”