Why Your Special Collection Needs Special Insurance If you watch the news, you know unexpected tragedies like burglaries, fires and natural disasters happen every day. But what may be even more unexpected to some victims is finding out most homeowners
News-Antique.com - Jan 17,2008 - By Dan Walker
Collectibles Insurance Services, LLC
If you watch the news, you know unexpected tragedies like burglaries, fires and natural disasters happen every day. But what may be even more unexpected to some victims is finding out most homeowners insurance does not adequately cover their cherished collections.
Let’s take a closer look at the facts and identify the steps you need to take to keep yourself from becoming a victim twice.
Why homeowners insurance is not nearly enough
Designed to protect personal property, homeowners insurance is probably insufficient to safeguard your collection. Homeowners insurance usually limits three things:
1. Personal property coverage to a percentage of the residence value;
2. Personal property while it is away from your residence; and
3. The amount payable for theft of valuable items like silver, crystal, guns, and stamps.
Even if your collection is covered, you may not be able to make a claim unless you have your collection listed on a schedule. Claims settlement may be based on actual cash value rather than the replacement value of the collectible. Finally, losses caused by flood, hurricane and earthquake may not be covered under the terms of your homeowner’s policy.
If you are utilizing your homeowner’s policy to cover your collectibles, be sure to call your agent or insurance representative to discuss the coverage available under your policy. Put your understanding of the coverage in writing and request a written acknowledgement and comments.
What to look for in a policy
The best way to protect yourself is with a separate policy specifically designed to insure collectibles. Seven important areas to consider are:
1. Blanket coverage. Broader and more comprehensive than named peril insurance, blanket coverage provides for most causes of loss unless specifically excluded.
2. Thorough coverage. Some carriers break coverage for crime down into three types: burglary, theft and robbery. Be sure your policy provides coverage for all three types of crime. If you live in an area prone to natural disasters like earthquake, hurricanes or foods, consider a policy that covers these types of losses. In general, look for a policy that provides coverage for natural catastrophes when available.
3. Travel coverage. Sooner or later you will need to travel with your collectibles. Your collectible policy should allow you to travel with a portion of your collection.
4. Shipping and mailing coverage. Today more and more collectibles are being purchased on the Internet. Make sure your coverage is worldwide and allows use of shippers such as FedEx and UPS and the U.S. Postal Service registered or express mail.
5. Automatic increases. Some policies provide for additions to your collection or increases in value by offering an automatic coverage increase provision. This is especially important for active collectors or collectibles that appreciate rapidly.
6. Appraisal requirements. Your insurance carrier should not require an appraisal—which can be costly and burdensone—unless the collectibles are very unusual or valuable. You should estimate and record the value of your collectibles utilizing your original purchase records, and other
