Recently we have been working with a few clients that have had interesting collections, so we thought we would share our insurance thoughts on collections.
Collecting vintage or antique items is a growing hobby, especially with sites like eBay making finding and purchasing as easy as a few clicks of a mouse. Collections can also be passed down from generation to generation. You may have inherited your grandmother’s thimble collection or your father’s set of hand-carved tobacco pipes.
Many collectors start out small and expand their collection over time. Once a collection becomes valuable, you’ll need to see that it’s insured properly. What you may not know, is that most homeowner insurance policies limit coverage for many collectibles.
If you have a valuable collection, you may need to seek out separate collectibles insurance. Here are the steps to make sure you’re fully covered:
- Review Your Current Homeowners Policy
Pull out your house insurance policy, dust it off, and read what it says about special collections. Some policies limit coverage of non-household items to a maximum claim amount, usually anywhere from $500 to $2,000.2Some policies deny coverage for these types of items altogether.
If you think that your collection might be worth more than you are covered for, you will have to obtain separate insurance. Your current insurer may be able to add a rider to your policy to specifically insure the collection. If not, you will need to seek out a specialty insurer.
- Document Your Collection
Regardless of how you are insuring your collection, to be able to process a claim you will have to prove what you had and what it was worth. The first step is to list your collection, including date purchased, amount paid, and any other important details.
Then take pictures of every piece and keep them in a secure location, such as a fire safe or safety deposit box. Keep receipts for any new additions to the collection and documentation for any prior appraisals you have received. If you have any books that show values for the types of items you collect, keep those handy to be able to back up your claim.
- Get an Appraisal
If you think your collection is worth more than a few thousand dollars, or if it is a specialized area that will make assigning a value to the collectibles difficult, getting a formal appraisal by an expert will help you to know how much insurance you need. It will also back up your claim should you have an insurable loss.
Finding an appraiser may be as easy as picking up a phone book. However, if your collection is specialized, it may be more difficult to have your pieces appraised. If you attend vintage or antique shows in your area of collection, ask around for advice on choosing an appraiser and how much it will likely cost. Never have someone appraise your collection and then make you an offer on one or more pieces. Legitimate appraisers are independent and will not engage in this type of conflict of interest.
A legitimate appraiser will never make an offer to purchase a collectible from you.
- Find an Insurer
Once you know what your collection is worth, shop around for insurance for it. Start with your current insurer and ask if you can increase your coverage to include the collection. This is often the most inexpensive method of insurance. If not, research other insurance options with specialized insurers. Talk to other collectors in your field and search online for other options.
For example, Collectibles Insurance Services, LLC, specializes in everything from vintage teddy bears to antique firearms collections and is a popular insurer with eBay collectors.3 Other insurers that offer protection for high-end artwork and other valuable collections include AXA Art Insurance Co. and Lloyd’s of London.45
When comparing insurance policies, make sure they cover a wide range of losses, such as fire, theft, breakage, and loss through the mail. Some policies only cover losses in your home, so, if you attend shows or otherwise travel with your collection, make sure your policy covers you wherever you are.
The Bottom Line
Insuring your valuable collectibles is just as important as insuring the rest of your home’s contents. With a little research you can find the perfect fit for what you collect, from antique cars to sports memorabilia to vintage doilies.
- Homeowners insurance usually either does not cover collectibles or imposes a low limit on the coverage. You can check in with us on your specific collection to review any limits.
- If you have valuable collections, it is generally wise to arrange for separate coverage of them.
- In most cases you would need to document your collection and have it appraised before insuring it.
Here are a few examples of collections that we have insured for our clients:
If you or any of your family members have started any collections, check in with us on the best way to insure these items.