If you have a valuable collection and want to make sure it is properly insured, ask your insurance agent what you need to do to be assured it is properly covered in the event of a fire, flood or burglary. Many basic homeowner insurance policies do not cover collections or at best cap them at a minimal amount. Generally, to get additional coverage for a collection you would need to purchase a rider to your policy and appraisal by a qualified appraiser will be needed to verify the value of the collection. And if your collection grows, the appraisal needs to be updated to include the new acquisitions. Generally this needs to be done annually to account for additions and market fluctuations. Also the insurance company will want to know what security you have to protect your collection. Is it stored in a safe on premise or in a safe deposit box at your bank? Do you have an alarm system in your home? All of these issues will have a direct impact on the premium you will pay for coverage.
An important question you need to ask your insurance agent, and one that is very important to collectors of sports memorabilia, is what is actually covered and the value thereof. This is an issue that caught me by surprise when I had a conversation with my insurance agent. When discussing what valuation I wanted to place on my inventory for insurance purposes, something we had done every year, somehow the issue of the value of an autographed baseball came up. An example I used was the coverage I would have if an autographed Mickey Mantle baseball were to be stolen, what would be reimbursed by the insurance company? Not that I would ever make a claim for a single item like that, it was just a hypothetical question. To my surprise the answer was the value of the baseball $14.95, not the value of the autograph which at the time was around $200. This information was not forthcoming earlier, and as a result I was paying an insurance premium for a valuation on my inventory that was not really covered since the insurance company wasn’t covering the value of my autographs. Needless to say I dropped the valuation for my policy purpose to reflect what was actually covered, reducing my premium, and searched for an insurance company that recognized the value of autographs.
I raise these issues in order that you be aware of some of the pitfalls and shortcomings of insurance. If you decide to have your collection insured, be sure to ask all the right questions of your agent. Be sure to know the insurance company’s requirements and what it considers covered items and values. Not all companies cover collectibles, and you may need to get coverage specifically for your collectibles from a different company in addition to your normal home owners insurance.
Keep in mind insurance is not cheap. We at Beachcomber, after finding out our coverage was not what we expected took a multi-pronged approach. First we found an insurance company that specialized in just the sort of coverage we needed, recognizing the value of our collectibles and second we adapted a self insurance mode for areas where since the losses were so small to nonexistent, we went without insurance with the idea that if we did have a loss, the savings from not buying insurance more than covered having to pay for an occasional loss. In some cases self insurance makes sense, especially if you take the proper steps to safeguard your collectio