Collections of All Shapes and Sizes: How do You Insure them?

Personal Property Appraisers see all kinds of “anything”  -  from major-league art, wine, coins, jewelry and rugs to antique toys, art glass, sterling silver and even Santas!

Are you unsure whether your collection has appreciated since you acquired it?

Sophisticated private collectors often have appropriate risk management in the form of a fine arts or collectibles insurance policy that reimburse at full replacement value. However, many people are unaware of the limited amount of coverage they have for fine art and other valuables under their current homeowner's insurance policy.  Many clients simply do not realize that their prized possessions are drastically underinsured and inadequately protected.  A devastating loss event can be financially, as well as emotionally, devastating. (Chubb Personal Insurance)

To insure that you will not be surprised at a time of loss, ask your insurance agent about the valuation method that will be used when settling any potential claims.  Actual Cash Value and Replacement Value are important terms to understand and the differences in value between them can be startling. Think wholesale vs. retail.  Additionally, you should carefully compare deductibles and limits of a homeowner’s policy versus a collectibles policy.

Ideally, your collection should be insured for retail replacement value, which means getting an appraiser to assess art works or other collectibles on that basis every few years. Supplying appraisal reports to your insurer ensures you have adequate insurance coverage and the evidence to support potential future claims. Most insurance policies require appraisals of items or collections over $5000 as part of the underwriting process. Companies that offer fine art and collectibles insurance typically require appraisers have a high level of expertise in connoisseurship and valuation and sometimes employ their own adjusters. 

Good professional appraisers are able to determine the value of unique or rare items, which should expedite the claims process and lead to a better outcome for the insured.  For instance, Chubb and some other companies have resources to “Find an Appraiser” on the American Society of Appraisers   and the Appraisers Association of America’s  websites.  You can find someone with certified expertise in your particular collection type, or a certified generalist appraiser, nearest to your location.

Homeowners policies generally cover your items while in your home only and for named perils only.  If you move (wear your jewelry on vacation) or store those items (while the house is painted), you may not be covered.  Collectible policies typically cover items in transit or storage and may discount for alarms or safe storage. A good appraisal, minimally meeting the Uniform Standards of Professional Appraisal Practice by a Qualified, Certified or Accredited Appraiser, is an appropriate first step to developing a comprehensive fine art, jewelry, or collectibles insurance program.