Buying scrap diamonds?

[Xanthoria]

In the past I chipped a diamond and the insurer paid out, then they auctioned the scrap diamond to recoup their loss, but let me buy the chipped diamond back for $1 more than the top bid - about 1/5 it’s retail value. I had it recut for very little and it came out looking better than before!

I’d buy a chipped diamond again. But I cannot find any scrap diamond auctions - how does one do that?

 

[sledge]

I would speak with your insurance that guided you previously and ask them for some leads.

Also, I might note that while your experience turned out great, there may be scenarios where you lose more of the diamond and it wouldn't be such a positive experience.

So I would be cautiously optimistic and try to learn as much as you can about what types of damage, location, etc that makes it "easy money" vs a total headache.

 

[Karl_K]

As far as I know they are not open to the public.
In some state it would not be legal for the insurance company to sell them to consumers because they are salvage.
They could offer you yours because you were it's owner.

There are several different ways that insurance companies deal with damaged diamonds that varies company to company and state to state and there may be more ways.
1: and least likely for anything but very large diamonds is individual auction item.
2: sold as a lot with other stones at auction is common.
3: and what is very likely what happened.
They have a lists of approved jewelers.
They snap some pictures and gave them what info they have as to undamaged weight, color, and clarity, then weight whats left of the diamond and send it out to the approved list and they send back what they will pay for it.

 

[sledge]

I’m a little surprised they limit their buyer pool. I figured they would see a dollar as a dollar, regardless who it came from but maybe they are hedging against a potential lawsuit from an uninformed buyer.

Of course, it’s easy to start a business. I had some friends do this so they could access the high powered chemicals to treat their yards and also to gain better discounts with various landscaping businesses when buying their plants, trees, etc.

Any other stipulations you know about? Established place of business? Annualized volume requirements? Licensing, etc?

 

[Karl_K]

Any other stipulations you know about? Established place of business? Annualized volume requirements? Licensing, etc?

Again it will vary company to company and state to state.
Licensed and bonded and insured would likely be a min. is my guess.
Some states you have to have a special license to buy salvage from an insurance company. .

 

[Karl_K]

I’m a little surprised they limit their buyer pool. I figured they would see a dollar as a dollar, regardless who it came from but maybe they are hedging against a potential lawsuit from an uninformed buyer.

The faster the can turn them into cash the better they like it.
They are not in the business of holding diamonds.
They also hate lawsuits so that is a factor plus state laws.

 

[sledge]

Thanks @Karl_K, much appreciated.

 

[Ibrakeforpossums]

Again it will vary company to company and state to state.
Licensed and bonded and insured would likely be a min. is my guess.
Some states you have to have a special license to buy salvage from an insurance company. .

Last Friday I learned that Jewelers Mutual employees can buy salvage. Obviously I have a new career goal.

 

[Karl_K]

Last Friday I learned that Jewelers Mutual employees can buy salvage. Obviously I have a new career goal.

kewl didn't know that.

 

[Ibrakeforpossums]

Headquarters in my zip code. 54956. Well-respected locally and they have a beautiful gallery of gems and minerals on the main floor, open to the public.
The employee I spoke with told me she's allergic to jewelry - even 24 K. but her husband has a bunch of Rolex watches.

 

[Garry H (Cut Nut)]

We represent Robert Procop in Australia, jeweler to stars and world leaders etc.
He started in the trinket trade working for his uncles pawn broker biz and graduated to a cutter of diamonds and gems. He went around LA's pawn brokers buying up chipped gems and recutting them.

 

[Daisys and Diamonds]

Not exactly a chipped diamond but i bought two rings on trade me (NZ eBay) that had had an insurence claim paid out on them but they were then recovered
They were sold on behalf of the insurance comoany by a 3rd party
I was very happy with the price

 

[denverappraiser]

I deal with a big insurance company quite a bit on this. In my case, it’s a closed auction system. The company sends me the stone(s) and I write up a report. There are a dozen or so buyers who read it and bid on the stones. They sell to the highest bidder. It’s all designed to move FAST. The insured gets the right of refusal to snap it up at the last moment but that’s the only member of the public who ever sees the deal. Company employees do not get to bid. Neither do I.