If you have more than two of something, you have a collection. You should therefore should obtain insurance for collectables. There are an estimated 90 million collectors in the United States.
Insurance for collectables policies used to ensure privately owned collections are referred to as “scheduled personal property floaters.”
Floater policies are offered through insurance companies that are classified as either: –
- “Admitted”. These are insurance companies licensed by a state insurance department to conduct business in the particular state. Generally, the coverage forms and rates are required to be submitted to the state insurance department for review and approval. (Your homeowner’s insurer is most likely an “admitted” insurance company).
- “Non-Admitted” (also known as surplus lines) insurers are authorised by the state regulator to conduct business in the particular state, but the coverage forms and rates are not regulated. Because the coverage forms and rates are not regulated, these insurers have the flexibility to design insurance policies that can be used to cover unique or unusual types of property.
The difference between “admitted” and “nonadmitted” insurers: –
If an admitted insurer becomes financially impaired or insolvent, most state insurance departments have the authority to take over the operation of the company. Most states have a guaranty fund in place to provide payments for covered claims to help minimise the financial loss to policyholders resulting from an insurer’s insolvency.
State insurance departments do not have the authority to take over the operation of a “non-admitted” insurer. The state’s guaranty fund does not respond to insolvencies of non-admitted insurers.
The following items should be included in any insurance for collectables:-
- Specific coverage should include theft, vandalism, accidental breakage, fire, lightning, windstorm, flood, water damage, earthquake and shipping coverage.
- Additions to the collection should be automatically covered for a period of time until you can add them on.
- An inflation guard feature that automatically increases the value of your collection each year.
- A reasonable deductible.
- Replacement cost average, so that you will be paid the current market retail value of the loss.
- Affordable rate of premium to coverage value.
- Detailed inventories or professional appraisals should not be required.
In addition to the above, you may also wish to consider automatic travel and exhibit coverage and moving coverage.
Valuation, Appraisal and Inventory: For most collections, the insurer should not require a detailed inventory or any type of professional appraisal in order to obtain coverage. However, the company may require a list of single items with very high values. This is not uncommon. It can be easily provided if you have kept receipts for your purchases.
An appraisal is one way of determining the value of your collection. This may be a good idea, particularly if you have no idea of its value. Generally, an appraiser will need to be physically present at the location of the collection, so that the collection can be viewed, measured, documented and photographed. The appraiser will then research your collection, and ultimately provide you with a written appraisal report. This report will contain information about the purpose and type of appraisal conducted.
The report should contain a complete description of each item, including size, markings, characteristics and value.
At a minimum, you should track the following information for each item:-
- Date of purchase
- Name of seller and location
- Category of item
- Good description of item, including shape, colour, markings and other unique features
- Purchase price
- Current value
- Picture of item (not required, but a good idea)
Antiques and Collectibles National Association require that only single items over $2500 need to be listed. The deductibles start at $250 per occurrence. They cover anything except jewellery, coin/currency, new guns and anything motorized.
(For collector automobile insurance, they recommend Hagerty Insurance Agency).
American Collectors offer broad coverage on your collectables which include damage caused by accident, fire, flood, theft, hurricane and earthquake. Scheduled items’ value over $2000 automatically will have increased coverage by 2% quarterly, and 8% annually at no extra cost.
Hagerty Classic Car Insurers use industry-leading tools to help you determine the true value of your classic car/s, then create an agreed value policy that covers it. Hagerty only insures collectable cars and therefore can provide coverage at a lower price than daily driver insurers.