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The November 2023 auctions have come to an end and we have witnessed sales of over $2.2 billion in art by the three major auction houses. The jewelry auctions will be starting soon and predictions for record-breaking sales are anticipated. As we approach the end of the year, this is a good time to take stock of any valuables purchases made and make sure your insurance coverage has kept pace.
Whether the purchase of art or any other collectibles is for investment purposes, or just a passion, it is extremely important to ensure you have the right insurance coverage. Here are three examples of claim scenarios that are not covered by a traditional homeowners policy:
You have a Jasper Johns which gets destroyed due to a flood.
You collect wine and there is a power outage; you have rare, expensive bottles that have now spoiled.
You recently purchased the Rolex watch you’ve had your eyes on and it has been stolen.
The best way to properly cover valuables is by purchasing separate coverage. Valuables policies are commonly referred to as Collections, Valuables, Personal Articles and/or Inland Marine coverage, but they all serve the same purpose - they cover the items you hold dear. There are different coverage options, such as “blanket” coverage or "itemized" coverage. With blanket coverage, you don’t specifically itemize pieces, but instead purchase a lump sum amount of coverage. It is important to note that although there is blanket coverage, there are limits for individual items, so for the more valuable pieces, itemizing may be the better way to go. With “itemized” coverage, the policy specifically lists each item and its respective value. Most of the luxury providers give you extra coverages when itemizing. These extra coverages may include protection for a newly purchased item that hasn’t been added to your policy yet, market appreciation, and even items that may be on consignment. As with any insurance, there are some limitations and exclusions that you will want to be aware of. It is important to have this discussion with your insurance advisor.
Most collectors take great care of their passion purchases so it is no surprise that the insurance companies will reward that with discounts. They apply credits for alarms, home safes, back-up generators, and other additional protection. The more risk prevention you exercise, the lower the cost of insurance.
At our firm we find that 65% of our new clients do not have proper insurance coverage for their Valuables. Valuables is not just considered to be fine arts and jewelry, but other items including wine, stamps, musical instruments, silverware, porcelains, sports memorabilia, coins, sneakers, Pokémon cards and even handbags. We can help provide an analysis that will assist you in reviewing options and making the best decision for you. Get in touch today.