When we least expect it, a catastrophe can strike. Natural disasters, accidents, and acts of God can result in the loss of property and possessions you have worked hard to obtain. If your home is destroyed by fire or some other catastrophe and the items inside are uninsured, you could face additional hardship if those possessions hold sentimental value for you and your family members.
Most people probably don't think about insuring their valuable items or collections, but they should. When it comes to protecting your valuables against unforeseen tragedy or natural disasters, your existing homeowners' or renters' policy is probably not enough. Most likely, your current policy won't properly compensate you for the current market value of your valuable items or collections, even for scheduled valuables. This includes, but is not limited to jewelry, fine art, coins, wine, stamps, sports memorabilia, and antiques.
A collectibles insurance policy can provide coverage for these most precious items, and ensure losses are not subject to the homeowner's deductible. When written appropriately, a collectibles insurance policy can provide up to 150% of the stated items replacement cost if you decide to replace the item after a covered loss. While the sentimental value of your original collection is irreplaceable, you can count on obtaining its monetary equivalent in a new collection if it is stolen or accidentally misplaced.
Because most insurance companies limit the value of your collectible items and valuables, especially those that exceed the amount insured, it is advised to purchase coverage specifically for the purpose of protecting these items. But, what is covered under a collectibles policy, what should you look for, and how should you go about shopping for one?
What is Covered Under a Collectibles Insurance Policy?
Each policy will differ, so we recommend first navigating the fine print of your current homeowners' or renters' policy with an experienced agent who has your best interest in mind. But, as a general rule of thumb, you can expect that a collectibles insurance policy can cover the below:
Commonly, jewelry is already covered under your current homeowners' insurance policy, but coverage is limited and subject to policy caps. In a typical scenario without collectibles insurance, you pay your full deductible and your policy only covers a small portion of the loss, which is oftentimes, not enough.
With a collectibles insurance policy in place, you'll obtain a full claim payout and avoid paying a large deductible. Along with that, you're provided peace of mind with protection against theft, damage, and even disappearance or loss. You can also insure many types of jewelry; this includes but is not limited to engagement rings, wedding rings, watches, earrings, and antique jewelry.
Assets like cars, jewelry, or houses are valued for the emotion and care that goes into them. However, owners and insurance companies tend not to value art collections as highly since they lack similar emotion and care.
Whether an accident at an art gallery causes property damage or you raise a claim of negligent misrepresentation in an artwork sale - a separate fine art insurance policy for your paintings will protect you against loss as well as legal and all other costs involved in transactions.
Whether you collect stamps, coins, wine, sports memorabilia, classic cars, silver, or something else, damage to your collection can be irreparable and costly. You've most likely invested a lot of time and money into your collection, so you need extensive coverage to protect against events like theft, flood, fire, or accidental damage.
To obtain the most comprehensive coverage for your collections, keep detailed inventories and take clear images of your rare items. That way, you know exactly what you have, and it will help you prove the collection's worth should you need to submit a claim later on.
Benefits of a Collectibles Insurance Policy
While the cost of insuring an expensive item may seem high, it is not always the case. Most insurance companies charge you around 1-2 percent of the collection's value—a reasonable price by any standard. This is especially true if a catastrophe strikes and you want to sell your items quickly. Most valuable items appreciate over time, making insurance protection even more important.
Gives you peace of mind
Worry and stress are negative emotions that no one should have to carry. When you're worrying about your valuables, it can be hard to perform at your best. This is especially true when you travel, and your valuable items are not protected. Owning collectibles insurance will ensure that if the unthinkable happens, it will be replaced.
It protects your investment
Collectors who value art, antiques, or watches will want to protect their collections from both the ravages of time and the uncertainties of life. Insurance is a worthwhile investment to ensure that your collection will be reimbursed if something unfortunate should happen to it.
What To Look For in a Collectibles Insurance Policy
Whether you own one high-valued item or many pieces, your coverage should be flexible and suited to fit your unique needs. Look for coverage that can cover most collectible losses with no deductible necessary.
Paying market value
If the market value of an item on your policy before a loss exceeds the amount of coverage for that item, you should still be covered. Look for a policy that can pay up to or above the market value before the loss.
Determining the market value of your valuable items can prove difficult, especially for collections that are worth more, so keeping extensive documentation of your inventory and its associated values (both actual retail value and purchase price) at all times is recommended to ensure accurate payouts.
As always, it's important to remember that collectibles insurance cannot substitute for the value of a rare item, but it can provide reimbursement for that item's monetary worth.
Automatic Coverage for New Collectibles
Many insurance policies feature automatic coverage for any new items you add to your collection. However, most traditional insurers feature limits on how much they will cover automatically. While you should look for automatic coverage, ensure you're also aware of the limits for new acquisitions.
How to Shop for a Collectibles Insurance Policy
Review your current Homeowners/Renters policy
Some homeowners insurance policies cover claims up to $2,000 for valuable items, while some homeowner policies cover nothing. A review of your current coverage is necessary to determine how much coverage you might need.
Renters' insurance can cover collectibles, but you will be protected up to a specified limit, and most policies set the maximum at $1,000.
Thoroughly document your Collection
As discussed above, thorough documentation of your valuable inventory is recommended so you and your insurance agent can dictate the coverage you need, and if you ever need to file a claim, you'll have documented proof of what your collection is worth. Inventories can get overwhelming if you have an extensive collection and are trying to determine each item's individual worth. Receipts, appraisal documents, or purchase and provenance documentation can be valuable for inventories as they speak to the historical significance of your items. Make sure to periodically update your inventories as well, adjusting for any rise or fall in the item's value.
Evaluate your coverage options
An agent will be knowledgeable about the available insurance products and can provide professional guidance on which coverages may be best for your unique situation.
The Bottom Line
While typical homeowners’ policies are designed to protect your home and its contents, there is usually limited coverage for valuable possessions that get lost, stolen, or damaged. Home insurance policies often do not cover art and collectibles for their full value. At Highline Risk Solutions, we understand that your treasures reflect a unique part of your own personal journey like a necklace passed down from your grandmother or pottery from your travels abroad. These things inspire memories of special times in your life and speak about your adventures and passions. Collections and items, big or small, deserve protection. Whether it's stamps, coins, wine, sports memorabilia, or any other type of collection, we can help.
We offer exclusive protection for your valuable assets, and we are always prepared to go the extra mile in order to make sure you, and the things that matter most, are protected. To learn more about our personal insurance options, visit: https://www.highlinerisksolutions.com/personal-insurance.
Some of this content was originally published on https://daigletravers.com/.