Collections Insurance 101

Collecting things can be a fun hobby, whether you are collecting seashells or expensive pieces of art. While the shells might not have much financial value, valuable collections need to be properly insured to protect your investment.

What is collections insurance?

Also referred to as a personal articles floater or collectibles insurance, collections insurance protects your valuable collection from things like accidental breakage, theft, and other covered perils. Collections insurance covers high-value items like jewelry, artwork, coins, wine, and historical artifacts.

How do I insure a collection?

For people who have a small amount invested in their collection, homeowners insurance policies offer the ability to add coverage for an individual item or small group of items called a scheduled property rider or endorsement. If you have a small jewelry collection or a few fur coats, a scheduled property rider might be enough to cover your needs.

However, someone with a large or especially valuable collection of items would be better off with collections insurance. Collections insurance offers a broader range of coverage and a higher amount of coverage than a scheduled property rider. This means that someone with a violin and an oboe may want to purchase a scheduled property rider, while someone who owns half an orchestra worth of instruments or an original Stradivarius would be better off purchasing a separate collections insurance policy.

Some insurance companies offer collections insurance with agreed-value coverage. Agreed-value coverage pays a specific, agreed upon amount that was determined when you purchased the policy. The agreed value is determined by a number of factors, including the condition of the items, any special features they may have, and the rarity of the collection. Agreed-value coverage is different from Actual Cash Value (ACV) coverage. ACV coverage takes depreciation into account when determining how much the insurance company will pay in the event of a claim, whereas agreed-value coverage is determined with the understanding that the value of these specific items will not depreciate over time.

Can you insure any collection?

Most high value collections can be insured, but there are some situations where you may not be able to insure your collection, including:

• Undocumented collections: If you don’t have documentation of exactly what you have, where you have it, and the appraised value of the items, you may not be able to get your collection insured.
• Unappraised collections: If you are trying to insure a high value collection, getting an appraisal is an important part of insuring your collection. After all, you can’t know how much insurance you need if you don’t know the value of your collection.
• Low value collections: People with a few pieces of jewelry or a couple of antiques may find that their items are better off being covered with a scheduled property rider. People with collections that have no real financial value (rocks, Beanie Babies, etc.) might find that their items will likely only be covered under the personal property section of their homeowners insurance.

Any collection that is valuable enough should be eligible for insurance, whether that is coin collection insurance, toy collection insurance, or insurance for historical artifacts or antiques. If you have a collection that is unique or difficult to insure you may need to work with specialty insurance companies or you may need to work with an insurance broker who has access to specialty products. Companies like Lloyd's of London, Pure, Chubb, and AIG have flexible options.

Should collectable cars be insured through car insurance or collections insurance?

If you own several cars that aren’t particularly noteworthy, a basic car insurance policy will be all you need. You should expect comprehensive and collision insurance to account for depreciation of your vehicles over time.

Many car insurance companies offer classic car insurance to protect you financially if you own multiple vehicles that are considered classic cars, exotic cars, vintage cars, or collectible vehicles. These policies don’t assume your vehicles will depreciate in value over time, but some vehicles are harder to insure than others. You may also find that your classic car insurance only covers your vehicles to be driven so many miles per year, or they may possibly charge a much lower rate for cars that aren’t intended to be driven. Our experts at Goosehead Insurance can help if you have a collection of classic cars to insure.

How are my valuables insured?

Whether you are looking to insure your wine collection or you just want to add your engagement ring to your policy, there are some important steps you need to take when insuring your collectibles, including:

• Proper storage: Make sure your items are stored and cared for properly. This may mean keeping your valuables in a safe or having an alarm set up to protect your collection from theft.
• Appraisal: Make sure your items are appraised so that you know how much insurance you should have to cover them.
• Document your collection: Take careful and meticulous notes, pictures, and other documentation in case of a claim. This can include keeping receipts and updated appraisal information as well.

Every collection is unique, so you will want to work with an insurance expert at Goosehead Insurance to find out exactly how your specific items should be insured.