This is a decision many of us wrestle with. Collectible insurance is not like any other typical insurance:
- It is expensive.
- The burden of proof of what you have in your collection is always on you.
- The value of your collection becomes subject to interpretation once you file for a loss. Unfortunately, the initial interpretation is from an appraiser hired by the insurance company although you can bring in your own appraiser to dispute eventually being settled by an arbitrator if you cannot agree.
So, don’t think it’s like insuring your car or house as it is not. It can be complicated.
Before we get into the details of collectible insurance you must ask yourself the question: do I really need to insure my collection? That comes down to one simple question: would the loss of your entire collection be a major blow to your financial future? If the answer to that is yes (as it is in my case: I refer you back to my collection as a major part of my financial future) then insurance is a necessary evil you should embrace.
If the answer is no, then maybe you do not need insurance and can take the personal risk of not having it. Bottom line: if the loss of your entire collection would be an emotionally devastating blow and not a financially devastating one, I would question the need.
I have found that none of my home insurance companies had any desire to insure my collection and all three that I have had in the past referred me to a collectible insurance specialist.
I have my policy with Collectibles Insurance Services. In no way are my comments an endorsement of them over another agency but I want you to know that what I will be saying applies to them. As I initially investigated I found the collectibles insurance companies to be similar so I just made a choice.
The insurance covers:
- A general policy limit of payment which should be the value of your entire collection.
- Burglary and theft in a limited amount (So burglars can steal only so much or you are screwed).
- Personal travel with part of your collection (again limited)
- Collectible exhibition coverage
- Mail coverage
- Unscheduled items (a petty amount for catch all)
How Is Your Amount of Insurance Determined?
You determine the amount of your policy based on what you feel your collection is worth. In round numbers, expect to pay between $500 and $600 per year for $250,000 in maximum liability (depends on certain facts such as security alarm etc.). Do not overstate value of your collection because they are only going to pay what their appraiser feels it is worth (although you have challenge abilities). It is also important to understand that you must have everything you are insuring documented! Every piece every item. This does not mean individual write ups on everything but you must have photographic evidence that you have it in your collection and clear enough to establish a value from the photograph. Video documentation would be preferable in most cases.
Recently I decided, after many years of being insured at a higher rate, to lower my insurance value significantly. I realized there is no way I could prove the documentation on every item I have. I have thousands of pieces of ephemera that if lost in a fire I could never substantiate so I would not get paid. I lowered the value to things I had very clear documentation on (which basically for me means they are on display in my collection). This amount of insurance would keep me on my financial feet even if I did lose all of my collection. I am not saying this is a good practice it just worked for me. I would rather have everything I own documented to insure and collect the full value. Right now, the task is just too large.
In each policy, there is a focus on scheduled items. Scheduled items are those items that are valued at over $5,000 individually. You must provide a detailed list of those items. If an item is not on the list the maximum you will be paid for it is $4,999 no matter what it appraises for. Make sure this is accurate and you keep it updated.
Please read your policy before signing. There are so many limits and exclusions you need to make sure you can live with them. Here are a few:
- If you store items in your basement they must be stored on shelving units at least 6 inches above the ground or they are not insured.
- Shipped items have different levels of coverage depending on how they are shipped. They do not cover UPS shipments of any kind!
- If your items are ever placed in a storage unit you have very minimal coverage.
- My earthquake coverage is limited to about 10% of total value of my collection. Ok for me but maybe not for you.
- Your policy will only cover your collection not anything you may have in a commercial venue.
You Have Had a Major Loss, Now What?
I am going to simplify this somewhat but here is basically what will happen.
- In all cases, you must submit the loss in writing with proof of ownership within 90 days of the loss.
- You must take steps necessary to minimize the loss (expense born by you and the company proportionately).
- You must allow them to review the loss using a visit or your records.
- If you and the company disagree the amount of your claim (they will) each party chooses a competent appraiser and then they try to work it out. If they agree the claim is paid. If they cannot the decision goes to a third-party umpire that you both agree on to be impartial. You can see the potential problems here.
- Once an agreement is reached, they pay you within 60 days
I have never actually filed a claim so I cannot give any experience on how effective the claim process really is.
Here is my disclaimer: these things are my opinion only. I am not recommending that you do or do not purchase insurance and certainly not recommending any agency over the other.
My experience is with Collectibles Insurance Services only. I am not an agent of theirs and am not directly recommending them. Do your research and make your decision.
We never want to use our insurance in any aspect of our lives. Collectible insurance like all others becomes an individual choice. May you never have to file a claim!