Insuring Your Collectibles
Many people have a tendency to collect things. When young, you might have had a bug collection, a rock collection, or many other types of “treasures” you chose to keep in a box, often hidden under your bed, in a dresser drawer, or way far back in your closet.
As we grow older, our interests change, but we often continue the hobby of collecting. Common collections are sports memorabilia, figurines, souvenirs purchased when traveling, guns and other weapons, china, and artwork. Others have unique collections. Examples are quilts, 1st edition books, and doll tea sets, to name a few.
Serious collectors can invest a large amount of money in their collections, and we often find during a conversation or while providing an inventory service that they are usually underinsured.
Standard insurance policies
Many are unaware that homeowner’s insurance policies have limits assigned to collections. In the event of a covered loss, antiques, fine arts, memorabilia, collector’s items, and similar articles whose age or history contribute to their value, are not eligible for replacement cost settlement. The stated limit could be $2,500 or less. Let’s say you have a figurine with an appraised value of $6,000. Under a standard homeowner’s policy, you may receive only $2,500. Actually, it could be less than that, because you may have to meet your deductible first
A replacement value insurance policy will provide you with a payout to replace items after a loss. When needing coverage for collections or collectibles, it is more difficult to adjust the value due to the claim process. Personal property payouts are based on the cost of the item when purchased. Collectibles claims are more complex because they could have appreciated in value over the years, they could also have lost value, or they could have been inherited (thus having no purchase price to apply). A homeowner should consider these scenarios when making a decision about purchasing a collections policy.
Collectors policies offer more comprehensive coverage
Additionally, most standard collector’s policies have zero deductibles, allowing you to receive the full value, Insurance is designed to enable you to recover adequately after a loss. Unfortunately, the majority of homeowner’s policies do not meet the policyholders’ expectations. When you have collectibles, it’s wise to have them covered with a collector’s insurance policy.
One key reason for a collector’s policy is that if you file a claim on your homeowner’s policy for the loss of your collection, you could receive a premium increase. When submitted under a separate policy written just for the collectibles, there would be less of a chance of jeopardizing your homeowner’s policy premium..
Natural Disaster Coverage – most standard homeowner’s policies do not cover losses from earthquakes or floods, and some may not even cover burglary or theft. A collector’s policy will assure you that you will receive full payment in the event of this type of loss.
Do you have a collection that is not inventoried and perhaps not adequately insured? Talk to your insurer to make sure your homeowners insurance covers your collection and to see if you need an additional rider.
We appreciate the contribution of this article by Donna Courtney, owner of Courtney Inventory in Little River, SC. Donna was a property and casualty insurance agent for more than 30 years, and always discussed the need for an inventory to help recover from a loss. Seeing herself as an insurance industry advocate, she found that owning a personal property inventory service helps her clients fill that gap between having insurance and experiencing an equitable claim process. Donna is a Certified Insurance Service Representative (CISR), holding many insurance licenses, including a broker license. She is also a Certified Inventory Specialist (CIS) and currently working towards her Certified Appraisal Examiner (CAE) designation. For more information, email or call Donna at 910-527-3155.