There's almost no resale market for diamonds, currently. A newspaper famously tries to sell a diamond every few years and publishes the result. They've never sold one.
So the insurance value for diamonds is their replacement cost, not their 'value'. Since if you can't sell it, it's got a hard time establishing a number for value.
I see used jewelry for sale at small shops, festivals, pawn shops, and flea markets. It's really likely that any small town with a used bookshop also has a used jewelry store. The ones I've been to sell a variety of other pieces as well.
I think the OP is getting at the fact that people don't buy used jewelry from randos off of Craigslist. That doesn't mean there's no market for used jewelry, just that people are much more comfortable buying from a store or vendor, probably due to perceived reputability and maybe the fact that they may not immediately realize that it's used. This is especially true with pawn shops, where they may sell wholesale jewelry along side their walk-in acquisition pieces.
Related: on Quora someone claimed that pawn shops value diamond rings without regard for the diamonds, and only for their gold, and they basically just toss the diamonds into a coffee cup. I pointed out that this means you should be able to get cheap diamonds there:
This is sadly not true in North America. If a jewellery store wants to stay GIA certified and get all the paperwork about being conflict-free, they need to buy their diamonds at a much higher price.
I'd be curious to know why jewelers wouldn't buy these diamonds and reset them. Is there some chain of custody that they want to maintain or something?
It goes against the entire idea of monetary sacrifice as a signaling mechanism for the buyer. Cheap diamonds are an antithesis to the signaling.
When my partner and I were married over 10 years ago, I bought her a ring and diamond for ~$7k. We were younger, and not so wise. With time comes wisdom. It now sits in a fire safe to be made into a pendant for our daughter; my partner now wears a $20 platinum band from Amazon, and I (occasionally) wear the $10 tungsten ring we bought when we were married (which is bookmarked for easy replacement if damaged or lost). Life is short, don't expend effort on something that doesn't matter. Take a trip together you'll both remember for a lifetime instead.
Some do. I have a friend who is a jeweler. Almost all of the gems she buys, diamond or other, are either lab-made or recycled gems. But she is an exception to the rule. She buys from a supplier that specializes in this sort of thing for small artistic custom jewelers.
No, they're not. Jewelers prefer to buy new diamonds from the cutters/polishers in India because the price is good and they can set up long-term supply contracts so that they can plan ahead knowing their supply is constant. It'd be like saying "why doesn't Southwest buy their kerosene from the local farm supply stores?"
There was heavy marketing that buying a "used" ring was bad luck, tacky, or somehow tainted. You'll find that most people that must have a diamond also must have one that is "new". The exception is if it's a family ring.
More than one of my acquaintances has reused her grandmother's ring. I expect this practice to increase as dead grandma is more frequently a post-war boomer.
I'd be interested in also reading about an experiment in buying a diamond. How much of a discount could you get on a certified, ~1ct Tiffany ring?
Part of me would be very interested in hearing about the result, along with variations on it (For instance, I know I've made this very restrictive, specifying the brand, which greatly limits the options).
Another part of me think this would just provide more proof of something we all know: that the market for diamonds, the entire thing, is so utterly bizarre, and yet it has such a grip on the US and a few other places, it's so odd. The results of the experiment I just described, well, it would probably just confirm "yep, this makes no sense".
One big challenge, I'd guess, is ensuring that you bought what you believe you bought (is it really a ~1ct Tiffany diamond)... but then again, that also just underscores the absurdity of what you've done, that it is extremely difficult to tell if you actually got what you intended to buy, when there's as much as a 100x difference in price. So again, back to "yep, makes no sense"
But the stones in those "used" rings can be extracted and sold on some market. Debeers doesn't control that supply, which means the market becomes subject to normal microeconomic theory again.
So the insurance value for diamonds is their replacement cost, not their 'value'. Since if you can't sell it, it's got a hard time establishing a number for value.