Our collectibles are our pride. Aren’t they? They are our prized possessions. And we feel it our duty to protect them, which is why you are probably here. Collectibles insurance is the best way to preserve the value of your collectibles. And not only value, but if a fire burns your collection to ash, you can be pretty sure your current homeowners’ or renter’s insurance will not cover you. You would need a collectibles insurance policy.
This article dwells on everything you need to know about this policy.
What Is Collectibles Insurance?
As the name says, this insurance protects your valuable collections like jewelry, silverware, or fine art like paintings, pottery, etc. Some of you might think that you already have a homeowners’ or renter’s policy. But while these policies do cover your collections, the coverage is usually too small.
For instance, your stolen jewelry might fetch you only $1,500. This amount is far from an acceptable remuneration. Thus, there is a need for collectibles insurance.
Here is a small list of things that can be included in your collectibles insurance policy:
- Fine Art
- Antique rugs and tapestries
- Books And Maps
- Comic Books
- Collectible Stamps
- Model Trains
- Musical Instruments
- Sports Memorabilia
- Rocks And Minerals
And much more… Any heirlooms or anything else of value to you are also included under the insurance.
This policy gives you extensive coverage. But if you do not want to go for a separate collectibles policy, you can also take a Scheduled Property Coverage. It is a rider to your existing policy and may increase the premium, but it is worth it. How does it work? You specify a certain amount of coverage only for that collectible you want to ensure.
Also read: What Is Term Insurance And How Does It Work?
For example, you have an emotionally essential heirloom necklace with you. Then you can set a scheduled property coverage for it. You need to specify and allot a certain amount of coverage for that necklace. This coverage works for less number of collectibles, but for broader coverage, we suggest you opt for the collectibles insurance policy.
How Collectibles Insurance Works?
Here are few aspects that will outline how a collectibles policy works:
#1: Agreed Value
Since the collectibles policy insures special stuff, thus the payout is also special. This policy does not pay like, say, the homeowners’ policy. While other policies work on a cash value standard, collectibles policy works on an agreed-value standard.
So what do we mean by agreed value? In agreed value, the insurer and the insured agree upon a specific price at the time of policy purchase. Later at the time of claim, the insurer will pay you the ‘agreed price.’ The very next question has to be that how is the agreed price decided. So, the agreed price is arrived at by considering factors like the condition of the items, their rarity, their unique features, and the industry standards.
A piece of good news for you is that the insurer does not decrease the agreed value based upon depreciation.
#2: Add Your Collectibles Automatically
We take complete care to document every collectible while buying a policy, but many of us forget to add new collectibles as we buy them. For the same reason, many insurance companies offer automatic coverage for your new collectibles.
But there are terms and conditions everywhere. In many cases, the automatic coverage ends within 30-90 days. Before which you need to add it to your policy officially.
Another aspect to consider is, the insurers usually set a cap on the maximum amount of automatic coverage you can get. Let’s say you have a cap of $1,500. Now a painting worth $700 is covered. However, if you buy something worth $1800, you still get maximum protection of $1,500.
#3: The Claims Process
The claims process for collectibles policy is also similar to the renter’s or homeowners’ policy. However, it depends on company to company.
Some companies need filling online forms, others require calling agents, and other a claims hotline. You might also be required to report what, how, where, and when of the accident. Lastly, you would need to submit damaged goods photos.
How Much Does Collectibles Insurance Costs?
You would agree with us; your collection is priceless. It is the emotional value they possess that makes them so special. And do you know the best part? The collectibles insurance is really inexpensive. Here is a small table from The Balance that shows the annual premium quotes of three popular insurance companies for three different types of collections. The cover provided is $20,000, and the deductible is set at $500.
|Insurance Company||Comic Book Collection||Vintage Camera Collection||Pottery collection|
|American Collectors Insurance||$106||$144||$172|
|Collectibles Insurance Service||$86.24||$141.67||$141.67|
The above table shows that how inexpensive collectibles insurance is. And when you compare it with the emotional value associated with your collection, it is indeed affordable.
Factors Affecting the Premium Price
Premiums differ due to many reasons typical to how you keep and care for your collectibles. They depend on factors like,
- Where are your collectibles stored- the basement or a room on your house’s upper floors, etc.
- What has been your financial history- have you been bankrupt or filed any claims in the last five years.
- How old is your home, and what type of construction is it?
- Other factors like- Is your home secured with proper locks and alarms, is it within 1000 feet of a fire hydrant.
- Whether it is in the flood zone, etc.
You will have to answer many such questions before a premium rate arrives. They assess risk and give discounts for being careful!
In A Nutshell…
Collectibles insurance is a great way to ensure that your unique collection is protected. God forbid, but if anything goes wrong, you are well reimbursed and in a position to repair or replace your collection. We understand money is not all you need when a flood washes your collection away. But you would agree, money helps.
This was all we had in our 101 guide. And we hope that you found the information helpful. Suppose you have any questions, suggestions, or queries. Would you please drop them in the comments section? We are all ears!