What if Your Collection Was Lost, Stolen, or Destroyed?
By Teresa Ambord
When is it time to insure your collection? Insurers say, when the collection's value exceeds $3,000, you may want to check into a separate policy. Your homeowner's policy may cover your collection to a point, but not necessarily, since that is not the purpose of the policy.
Even if you do have coverage through that policy for things like guns or antiques, the reimbursement is likely to be low compared to the replacement value unless the collection is listed separately. And, many losses occur while the collection is being transported for whatever reason, which means your homeowner's policy probably won't cover it regardless.
How do you determine the value of your collection?
Many general insurers require you to have professional appraisals to establish value, and to provide an item-by-item list updated for every change. Periodically, they will ask for updated appraisals as well. This can get pricey.
Specialty insurers, on the other hand, will expect you to place a ballpark value on your collection, based on replacement cost if you had to buy a similar collection on today's market. They recommend that you break your collection down into groups or subcategories, and then estimate the value of each group based on how much you think the group would sell for if auctioned to dealers and collectors.
One insurer says his company will generally cover a $3,000 collection for about $12 a year. that's barely noticeable. Insurers such as Collector's Insurance of America (CIA) provide insurance to e-Bay customers at the rate of about $29 per year for $10,000 of collection. Each month, they increase the value of the collection about one percent per year to maintain its value, according to a CIA representative.
Traveling with your collection
Again, many losses occur in transport, about one third. If you are transporting your collection by car, you may want to take out travel insurance to cover the extra risk. You can generally insure a collection en route up to around $50,000 in value.
Is any type of collection insurable?
Not all agencies will insure jewelry containing precious stones, bullion, or items considered fine art, such as sculptures or paintings. But most other collections are insurable, from Beanie babies to postcards to weapons.
Where do you keep your collection?
Storage facilities are considered riskier than housing your collection at home and may cost you more, about 15 percent more probably. But then, if your collection is too big to keep at home or your spouse is annoyed by having every room dedicated to your model car collection, there may be no other answer. Insurers love it when collectors store their treasures in bank vaults, but realistically, only the most valuable pieces (whether monetarily or emotionally valuable) will be stored in vaults.
There are some types of losses insurers probably won't cover, including:
- normal deterioration over time
- deterioration due to moisture, insects, or vermin
- dishonesty, as when someone in your family steals an item from you
- theft from checked baggage on a common carrier. If you are transporting your collection this way, you should get checked baggage coverage.
- misuse, as in using a collectible item in a way not intended, like pouring boiling water into delicate glass that is not designed to handle intense heat.
- loss from war, or confiscation by a government entity.
How do you find an insurer to cover your particular collection?
If your collection is focused on one thing, such as stamps or guns, you should have little trouble finding one if you search on the Internet, or contact your state insurance department.
- State by state: State Insurance Offices
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