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Insuring Collectibles

Protection Against Damage and Theft

Once you start collecting, you'll probably soon find yourself with a collection that is worth some serious money.

At this point many collectors face the quandary - how can you protect your arts and crafts while still enjoying them.

Physical Protection of Artwork

Protection takes several forms. First there is protection of the object itself from water, heat, fire, accidental falls, etc.

Serious art collectors, just like museums, go to great lengths to prevent harm from befalling one-of-a-kind priceless artworks,

This can entail a state-of-the art burglar and fire alarm system, fire suppression systems and even special vaults built in the home.

Most of us can't afford this degree of protection and probably don't have the type of collection that warrants it. It makes little sense to spend thousand of dollars to protect something worth hundreds.

But there are some common sense steps you can take on your own.

Use secure hangers strong enough to support the weight of your art and check them periodically. Recently a shelf in a museum collapsed, damaging several items because the hangers loosened over time.

Use museum mounts for items placed on shelves.

Keep valuables away from water pipes, windows and heat sources.

Install a good smoke detector and have some plan to protect your art if there is time when an emergency strikes.

Install a good safe, mounted to the floor and big enough for your most valuable pieces.

Insuring Art

Most collectors rely on insurance. Homeowners insurance does provide a degree of protection, but maybe a lot less than you think.

If you read your policy - and I highly recommend that everyone do so - you will likely find that there are some rather severe limits on the coverage provided for collectibles, coins, jewelry and art.

Although most policies provide coverage for household contents at about half the coverage for the structure itself, you will find that not everything is covered equally.

Most homeowners policies will place dollar limits on coverage for certain objects. For example, the policy might only pay $2500 for loss or theft of your silverware. This may or may not be adequate, depending on what you own.

There will also be a cap on coverage for cash - a good coin collection can easily exceed this cap many times over.

And on it goes for paintings, jewelry and other collectibles.

There is also the problem of what the company will pay if valuable collectibles are damaged by fire, smoke or flood. Does your coverage provide for expert restoration?

Will you will have coverage for one-of-a-kind pieces that the insurance company will be unable to replace?

Riders

If you want more complete coverage for your collectibles, you have to look into "riders", specific additions to your basic coverage. So, if your coins are worth $50,000, you can buy a rider specifically to cover this risk.

In addition to increasing your coverage, these riders usually have another hidden benefit. You will be required to list ever item you are seeking extra coverage for and also possibly provide receipts and/or appraisals plus photos.

This forces you to really compute what a potential loss might cost you. It also cuts down on disputes with the insurance company, since they already have proof of value of the items in the rider.

Of course not all is happy in insurance-land. You will have to stay on top of additions and subtractions to your collection and adjust coverage as values increase or decrease.

A more important downside to this type of coverage is cost. Premiums for certain items may well be prohibitive. I have found that I cannot afford to insure my coin collection - it is just too expensive.

At this point choices have to be made, Do you want to self-insure yourself and leave your collectibles on display? Or is it time for a large built-in safe or a safe deposit box at the local bank? This seriously cuts back on the enjoyment meant to be derived from your collectibles.

You may be able to obtain better insurance rates for these items if they are stored in a safe deposit box. Also the bank might provide coverage, but in that case you will probably have to disclose the contents of the box.

Coins, loose jewels and jewelry are just to easy to pocket and are probably best left in a vault. Most painting and artwork probably will not be the cause of a break-in, but will surely disappear if one takes place.

If you want to display and enjoy your collections, get a decent, monitored alarm system. Make sure you have good quality locks on your doors and windows. Finally be discrete when strangers and contractors are around the house.

Then find a good insurance agent and work through your policy looking for the most cost effective way to insure you collection against theft and damage.

Cahors Chapel
by Sherry Sanabria

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