Should You Insure Your High-End Collection?
by Sequoia Financial Group
by Sequoia Financial Group
Wine, sports memorabilia, artwork, shoes and purses, coins, stamps, and classic cars—you’ve spent years cultivating an impressive collection of goods, but are they as well protected from emergencies as they should be?
Unfortunately, most people don’t think about insurance until they need it. Homeowners insurance is a great starting point for protecting everyday, easily replaceable items, but collectibles, particularly high-worth collections, may require additional protection.
Below are a few steps to protect yourself and your collection in an emergency.
Know Your (Homeowners) Limits
Before you buy collectible insurance, be sure to read your homeowner’s policy thoroughly. Unfortunately, many homeowners insurance policies exclude collections entirely. A few policies limit coverage of non-household items to a maximum claim amount, but high-end collectibles are usually worth far more than the average policy covers.
Your current insurer may be able to add a rider to your policy to insure the collection specifically. If not, you will need to seek out a specialty insurer.[1]
Document Your Collection
There’s perhaps no more fundamental step in insuring your collectibles than documenting what you own and what it’s worth.
Take pictures of the individual pieces in the collection and keep those images in a secure location. Create a list of all the items and include the date of purchase, any receipts you have, the amount paid, and other vital details like recent appraisals.
If you have any books showing values for the items you collect, keep them handy to support your claim.
Get An Appraisal
Getting an expert’s formal appraisal will help you determine how much insurance you need. It will also support a claim in an emergency with an external assessment and supporting documentation.
Finding an appraiser may be as easy as a Google search. However, if your collection is specialized, it may be more difficult to appraise your pieces. If you need assistance finding an appropriate appraiser, contact one of the three major appraisal organizations for a recommendation: the Appraisers Association of America, the American Society of Appraisers, and the International Society of Appraisers.
Shop For An Insurer
Once you know what your collection is worth, shop around for insurance. Start with your current insurer and ask if you can increase your existing insurance coverage to include the collection. If your current insurer doesn’t offer additional protection or the price is too high, research other insurance options with specialized insurers.
Because life is unpredictable, make sure your collectibles insurance covers a wide range of losses, such as fire, flood, theft, breakage, and loss through the mail. If you attend shows or travel with your collection, make sure your policy covers you wherever you go.
Understand and Comply
Once you’ve secured insurance for your collection, be sure to understand the restrictions and limitations of your policy. If you don’t comply with the insurance plan requirements, you may not be eligible for an insurance claim.
Reach out to your insurance agent and ask them to explain the expectations around what evidence they need if you have to make a claim, how soon after a loss a claim needs to be submitted, and what unique conditions surround the coverage for your collectible. This also includes how the company expects to evaluate and award funds after submitting an insurance claim.
Reevaluate Your Collection Regularly
If you plan on expanding your collection, consider periodically evaluating your insurance coverage. This includes ensuring you have adequate coverage and the types of losses covered are still relevant.
Alternatively, if you sell some items, consider decreasing coverage if your collectible portfolio no longer warrants the original coverage.
Conclusion
You’ve dedicated time and money to building a cultivated collection; don’t wait for an emergency before considering how to protect it. Insuring your collectibles won’t prevent emergencies, but it will help you rebuild your collection if something happens to it.
If you have any questions, feel free to contact us.
Sources:
This material is for informational purposes only and is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Diversification cannot assure profit or guarantee against loss. There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses. Sequoia Financial Advisors, LLC makes no representations or warranties with respect to the accuracy, reliability, or utility of information obtained from third-parties. Certain assumptions may have been made by these sources in compiling such information, and changes to assumptions may have material impact on the information presented in these materials. Sequoia Financial Advisors, LLC does not provide tax or legal advice. Investment advisory services offered by Sequoia Financial Advisors, LLC, an SEC Registered Investment Advisor. Registration as an investment advisor does not imply a certain level of skill or training.
The views expressed represent the opinion of Sequoia Financial Group. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While Sequoia believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and Sequoia’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in equity securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. Past performance is not an indication of future results. Investment advisory services offered through Sequoia Financial Advisors, LLC, an SEC Registered Investment Advisor. Registration as an investment advisor does not imply a certain level of skill or training.
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