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 easily 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 homeowners insurance policies limit or exclude coverage for artwork and other 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.
- Homeowners insurance usually either does not cover collectibles or imposes a low limit on the coverage.
- If you have valuable collections, it is generally wise to arrange for separate coverage of them.
- You need to document your collection and have it appraised before insuring it.
- Once on a plan, understand the requirements for coverage including how to safeguard your assets and what to submit for a claim.
- If you're an active collector, periodically evaluate your insurance plan to make sure your coverage is adequate.
1. Review Your Current Homeowners Policy
Some home insurance policies limit coverage of non-household items to a maximum claim amount, usually anywhere from $500 to $2,000. Some 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 specific to the collection. 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.
2. Document Your Collection
Regardless of how you are insuring your collection, you must be able to prove what you own and what it was worth to eventually process a claim. Therefore, the first step is to create a list of your collection and document the date purchased, amount paid, and any other important details.
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.
3. 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, consider getting a formal appraisal. 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 with an external valuation with supporting documentation.
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, consider asking other members of the community for advice on choosing an appraiser and how much it will likely cost.
Most appraisers belong to at least one of the three major appraisal organizations in the United States. Those organizations are the Appraisers Association of America, the American Society of Appraisers, and the International Society of Appraisers.
4. Find an Insurer
Once you know what your collection is worth, shop around for insurance. Start with your current insurer and ask if you can increase your existing insurance 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. Other insurers that offer protection for high-end artwork and other valuable collections include AXA Art Insurance Co. and Lloyd’s of London.
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.
5. Understand and Comply With Your Insurance Plan
Once you're on the plan, understand the restrictions and limitations. For example, your insurance plan may require your collectibles to be maintained in a certain way with safekeeping performed based on specific criteria. If you fail to comply with the insurance plan requirements, you may not be eligible for an insurance claim.
Your insurance plan may require you to notify your insurer if you purchase an expensive collectible and wish to quickly add it to your plan. Some insurance plans may restrict coverage based on the acquisition of the collectible's date. In addition, your insurance company may extend a short-term temporary coverage plan while new additions are formally added to your primary plan.
Should you need to submit an insurance claim, it's best to understand what your insurance company requires for substantiation before the loss occurs. Reach out to your insurance agent to communicate their expectations around what evidence they need, how soon after a loss a claim needs to be submitted, and what unique conditions surround the coverage for your rare collectible. This also includes how soon after an insurance claim is submitted the company expects to evaluate and award funds.
Most carriers offer agreed-value coverage that pays a set amount based on the condition of items, their special features, and the rarity of the item. Agreed-value coverage differs from standard cash-value coverage in most homeowner policies.
6. Periodically Reevaluate Your Collection and Plan
If you're an avid collector, it's likely that your collection will continue to grow in size or appreciate in value. Depending on how often you expand your collectibles portfolio, consider periodically evaluating your insurance coverage. This includes making sure you have adequate dollar coverage and the types of losses covered are still relevant.
Alternatively, if you decide to part ways with some items, consider decreasing coverage if your collectible portfolio no longer warrants the original coverage.
Are Collectibles Covered Under Homeowners Insurance?
Collectibles may be covered under some homeowner insurance plans, though their coverage may be limited. There may also be restricted coverage should the collectibles leave your property (i.e. be on the road with you to a convention). It is highly advisable to review your existing insurance plan and contact your broker to clarify.
How Much Does It Cost to Insure Collectibles?
Insurance plans are based on coverage value, and these plans will vary greatly between brokers, services, and terms. In general, it often costs a few dollars ($1-$5 per year) for every $1,000 of insurance coverage obtained for collectibles.
How Does Collectible Insurance Work?
Collectible insurance plans are different than other plans such as homeowners insurance. Under a collectible insurance plan, the insurance company will often award agreed-value coverage which will often vary from the immediate cash value of your collectible. The insurance company will evaluate the rarity and condition of your good and award insurance claims should conditions be met that warrant insurance proceeds.
How Can I Protect My Collectibles?
Collectibles can be insured. Although some traditional insurance companies that offer homeowners insurance may not cover your collectibles, there are private firms that offer specific coverage plans for your assets.
How Do You Determine Insurance Value of Collectibles?
Prior to being covered by insurance, collectibles should be appraised by an independent third-party expert. This expert should be proficient in the field relevant to your collectible. This appraised value will be the starting point for your insurance coverage.
The Bottom Line
Insuring your valuable collectibles is just as important as ensuring 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.