Special Insurance for Designer Clothes

How to protect your high-end wardrobe against losses

Dolce and Gabbana. Oscar de la Renta. Hermès. Marc Jacobs. Chanel. If this kind of lavish designer clothing graces your walk-in closet, you’re probably a serious fashionista—and you also need to call your insurance agent, stat.

Why? Because if your house burns to the ground, gets swept away by a flood, or is raided by fashion-obsessed robbers, simple homeowners insurance will not protect your big-ticket garments and elegant accessories. If you want to cover your couture collection, you’re going to need specialized designer wardrobe insurance.

Key Takeaways

  • Traditional homeowners insurance policies often exclude damage to high-value garments caused by various risks like floods, earthquakes, mold, moths, and accidents.
  • The loss of expensive shoes, handbags, or designer gowns may not be covered under a homeowners policy if the loss is not greater than the deductible.
  • AIG Private Client Group offers Couture Collection Insurance, which provides specialized insurance protection for owners of couture and designer clothing.
  • This policy covers made-to-measure and ready-to-wear garments, shoes, handbags, and other accessories.
  • The starting annual premiums for a designer collection worth $1 million would be about $3,000.

Who Needs Clothing Insurance?

Unlike other collectible items such as art, jewelry, and antiques, insurance companies typically lump clothing, shoes, and handbags into the household contents category. These items are subject to high deductibles and a myriad of limits and exclusions, such as floods, moth damage, and mold. 

Furs, of course, can be—and often are—itemized on a policy rider or floater. But if you’re a designer-clothing aficionado, you are well aware that even a simple sundress can run you as much as a fun fur—several thousand dollars. And let’s not even talk about the haute couture ensemble you bought for last year’s charity gala.

In other words, if your closet is bursting at the seams with designer clothes, handbags, shoes, and furs, the contents of that walk-in could easily add up to more than a million dollars. That's assuming, of course, that you have only one designer-decked closet. Throw in the vacation home and the pied-à-terre and you may be pushing $1.5 million.

So, how do you protect your expansive and expensive wardrobe? Fortunately, there’s an insurance product for that.

Avoid a Fashion Wipeout

AIG Private Client Group released a wearable collections coverage in September 2015. This specialized insurance solution is designed to protect couture and designer garb, which, as described above, is not included in most homeowners insurance policies.

“Much like collectors of fine art, vintage cars, or wine, customers who invest in their wardrobes can be quite passionate about their acquisitions,” said Ron Fiamma, vice president and global head of private collections for AIG Private Client Group. “To help safeguard these items, our new couture solution closes the gaps in a traditional homeowners policy and enables us to proactively mitigate risks for these collections.”

AIG Private Client Group, which is a division of AIG, serves high-net-worth policyholders.

How It Started

AIG worked with Garde Robe Online (an apparel storage and preservation service) to identify coverage features and develop a comprehensive insurance solution for designer wardrobe collectors.

The product was the brainchild of Doug Greenberg, an owner of Garde Robe Online. When he noticed most of his Garde Robe’s clients declined the firm’s proffered insurance on clothes stored in its facilities, he approached insurance underwriters and suggested the product.

AIG developed the policy after the company sent underwriters to designers’ studios to learn about the materials and workmanship involved in fashion. it also used interviews involving Garde Robe’s clients. The end result was a unique insurance solution that recognizes the value placed on the skilled workmanship and fine detail of high-end designer fashions and accessories, many of which might be one-of-a-kind or custom-made.

What’s Covered?

AIG’s couture collection insurance covers couture (also known as made-to-measure) and ready-to-wear garments as well as:

  • Vintage garments
  • Shoes
  • Handbags
  • Other accessories
  • Celebrity clothing

The policy covers any damage caused to designer apparel by floods, earthquakes, mold, moths, and other vermin, as well as accidents. These are some of the risks that are often excluded from traditional homeowners insurance policies.

AIG's couture collection policy includes coverage for custom, work-in-progress couture, and shoes. It also reimburses you for expenses if you decide to remove your designer wardrobe from your home before an impending threat. And your clothing is covered across the globe—even when it’s in transit. This means you won’t have to sweat it when you check your couture-stuffed Louis Vuitton leather suitcase with a commercial airline.

The policy also pays for the repair or replacement of garments, whenever possible. A loss-in-value clause is also included, which means if a client’s vintage Chanel suits are damaged in an earthquake, they can be compensated for the reduced value as well as for any repairs.

To top it off, AIG Private Client Group’s in-house collection management specialists are available to customers year-round to help preserve the long-term value of collectible garments, shoes, and handbags. The insurance contract includes an array of services, including vulnerability assessments, emergency planning, and referrals to wardrobe-preservation specialists.

If a designer piece is damaged by a covered loss, the insurance also pays for dry cleaning and restoration costs by a high-end garment care specialist.

How Much Does It Cost?

If you have a designer wardrobe valued at $1 million, the total starting premium would be approximately $3,000 a year to insure your collection through AIG’s couture insurance. This, of course, depends on the potential risks to the clothes. Premiums vary and could be higher based on the location of your clothing collection. For example, if your wardrobe is located in a flood zone, hurricane-prone area, or in a rarely used vacation home, coverage will probably cost you more.

The AIG policy offers incentives to clients who use professional storage services where garments are covered in breathable garment bags and held in climate-controlled spaces. AIG’s couture coverage is sold under the insurer’s private collections policy, which includes benefits like agreed-value coverage, no deductibles, and loss-in-value payments.

The Bottom Line

AIG estimates that high-net-worth individuals (HWNIs) in the U.S. pay about $5 billion in annual insurance premiums, but only 20% of them are adequately insured. If you own an extensive collection of couture, it’s time to look into designer wardrobe insurance. Remember, your homeowners' insurance probably won't cover your high-value garments. Without the proper coverage, a single burst pipe or hungry moth family could cost you thousands or even millions of dollars. Not to mention leaving you with absolutely nothing to wear.

Article Sources

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