You can’t put a value on your most cherished items but you can try. Whether it’s an heirloom piece gifted by a grandmother or artwork passed down from one generation to the next, having peace of mind should anything go wrong is your biggest asset.
It starts with ensuring your priceless items are insured in case of theft or reported missing. Collections insurance offers that peace of mind. It’s an investment in preserving your legacy.
Below, we’ll explain why collections insurance is essential for high-net-worth (HNW) individuals.
What is Collections Insurance?
Also called collectibles insurance, collections insurance covers a variety of things, not only valuable collections.
For example, some people are avid collectors of miniature classic cars and once they become valuable, you must ensure they are properly insured.
Confusion often comes in when people think their homeowner’s insurance policy covers their valuables, says Investopedia. This is rarely the case. You need separate collectibles insurance for high-value items.
What Does Collections Insurance Cover?
HWP Insurance explains that valuables and collectibles insurance is a specialized coverage designed to protect your cherished possessions. Anything from art to antiques to jewelry is covered.
Private collection insurance covers the following:
- Damage or loss due to fire, theft, earthquakes, flood and breakages
- Damage when moved to or from exhibitions or while on display
- Wine spoilage due to the breakdown of climate control systems and breakage
- Repair or replacement of items that are part of a damaged set
How to Insure High-Value Items
Private collection insurance requires the expertise of a company concentrating on collections insurance. They’ll advise you to have your items appraised to determine the value and condition of each piece.
Luxembourg Times notes that valuable items are not valued by their price alone but also by their rarity. For this reason, they should be regularly reevaluated.
Appraisal experts suggest if the value of a cherished object increases over time, it’s wise to review its insurance worth.
To ensure you remain properly insured, reassess the sum insured in your policy as it determines the compensation you’ll receive in the event of a claim.
Another suggestion is to verify how your insurance provider estimates the value of the insured item.
Keeping Your Valuables Safe
Taking adequate steps to keep your items safe can decrease your insurance premiums. Your specialist insurer may advise you to keep your prized jewelry collection in a safe in your home.
If they are kept in a bank vault, you could pay an even lower premium on the condition you let your provider know every time you remove it from its safe place.
Failure to comply might result in them refusing to pay your claim should you suffer a loss.
The same applies to storing wine. Specified risk coverage protects against power outages.
Why HNW People Need Specialized Insurance
When it comes to specialized insurance, you’re purchasing a policy and a team of dedicated professionals.
HNW insurance brokers have access to global markets, enabling them to tailor your policy with higher coverage limits and enhanced flexibility to align with your asset portfolio.
Usually, policies are custom-designed with fewer exclusions and restrictions.
Understanding Your Insurance Cover
Your broker must explain the restrictions and limitations of your policy. If you fail to comply with all the requirements, you may not be eligible for a claim. And that’s the last thing you want to happen.
Your policy may require you to notify them if you purchase more valuable collectibles. In some cases, the policy restricts coverage based on the date of acquisition. To ensure you are covered, the insurance company could extend a temporary coverage plan in the interim.
When submitting an insurance claim, it’s best to have all the documentation required for a smooth and seamless claim process.
Final Words
Do your research and hire an insurance company that values its clients.
Ask important questions like specific risk factors and the level of broader coverage.
Take note that insurance companies base their payouts on several factors, including purchase price, current market value and retail replacement value.
The best way to protect yourself is to work with an established appraiser who is compliant with the Universal Standards of Professional Appraisal Practices (USPAP).
Insuring your high-value items is as important as easily replacing personal property. Remember, you are covering not only your legacy but also your heritage.
In other words, you can put a value on your most cherished items when it comes to collectible insurance.