Insuring Your Collectibles the Right Way
Many of us have stuff we've collected and consider treasures, from old train sets and coins to rare photos and books. Sometimes these collections can be quite valuable, and it would be a tremendous loss if they were stolen or damaged in a fire. But your homeowner's insurance would only cover these collectibles up to a limited degree.
Besides the structure of your house, your homeowner's coverage is designed to cover personal property like clothing, electronics, furniture and appliances. But most homeowner's policies put specific limits on collectibles, memorabilia and other high-end items of value. If you do have a collection of some type, or other unique items, you may want to consider a collectibles insurance policy.
Collectibles insurance is similar to the home insurance riders that provide extra coverage for jewelry, art and other valuables. Plus, the policies take into account the special risks to collectibles, such as damage to a baseball card collection due to humidity or other environmental factors. The insurance covers a range of events including burglary, theft, fire, flood, breakage and natural disasters. Coverage is also provided for loss or damage that happens during shipping, personal transit and exhibition. And unlike home insurance, collectibles insurance often doesn't require you to pay a deductible when you make a claim, though you can opt for a deductible to save on coverage for pricier items.
What scenarios will it cover?
What if the shelves that house your collection of Lionel trains collapse, leaving the antique engines and cars broken in pieces, dented and scratched? Your home insurance covers perils such as fire, wind and lightning - but not a collapsing bookshelf. In a case like this your collectibles insurance policy would cover accidental breakage. That's because these policies cover a wider range of risks to your insured items than a typical homeowner's policy will.
Before you buy insurance
If you decide that you need collectibles insurance, the first step is to assess the value of your collection. That's not easy when many collectibles increase in value - some slowly and some quickly, while some change value in spurts. If you are an avid collector, you likely will know the value of your merchandise based on clubs you belong to, through eBay listings, auction house sales, specialty magazines and dealers. Also, appraisers can evaluate collections, but they are not easy to find in many areas. And the more unique an item is, the harder it is to put a dollar value on. If you have some collectibles and don't know the value, you will need to scour sales and the Internet to determine an item's value. But you will need to find collectibles similar to yours. And just because something is very old doesn't mean it's valuable. The best way to ensure you are securing the right amount of insurance coverage is to keep detailed records and do your homework. This will be important if you ever do have to file a claim, which will be based on the replacement value at the time of the loss. This accounts for appreciation in value from the time in which specific items were first purchased or acquired and is the fundamental difference between a homeowner's policy and collectibles insurance.
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