Collectibles represented a $458.2 billion market last year, with expectations to grow up to $462 billion in 2023. Whether someone collects sports jerseys, bourbon, jewelry, or specialty duck decoys, they want to know their investment is protected.
While standard insurance policies can offer some protection, they weren’t designed with valuable collections in mind. James Appleton, MiniCo’s Director of Program Sales and a collectibles insurance expert, explains, “A typical homeowner’s or renter’s insurance policy, for example, may offer some coverage for collections, but they impose a maximum claim amount. If a collection is worth more than what the policy covers, you’ll have no financial recourse if it’s destroyed or stolen.” Some homeowners coverage won’t extend to collectibles at all, particularly high-value collections, like rare artwork or jewelry.
In addition, homeowners policies insure items for the actual cash value, not their full replacement value. If a rare vinyl record, for example, is stolen or destroyed, the actual cash value for the record — and what the homeowner’s policy is willing to pay — might be just a few dollars. In reality, however, that record might be worth tens of thousands of dollars to a collector.
As an insurance agent, you can help clients address this gap through a specialized collectibles policy that’s structured with the specific needs and risks of collectors in mind.
Questions You Should Ask Your Collectibles Clients
As you’re working with your clients to insure rare collectibles and valuable memorabilia, here are some important questions to ask:
1. Do you own any items you think may be considered high-value or collectibles?
While some people are very dedicated to building out and growing their collections, others may not have considered the value held by some of the items in their homes. It may not have occurred to them that a single piece of artwork or a piece of family-heirloom jewelry might not be adequately covered under their current insurance policies. It’s worth encouraging your clients to think about the broad range of what might be considered a “valuable collectible,” prompting them to take inventory of what’s on their walls, displayed on shelves, hanging in closets, or sitting in a box in storage.
2. How do you currently store and protect your collectibles?
For those who curate and keep collectibles, it’s important for agents to understand how they display, store, and protect them. Certain storage conditions significantly impact the risk of damage or loss. For example: Do they display their rare, vintage baseball card collection in a case in their living room? Or do they store it in a box, on the floor of the basement? Do they keep the $250K diamond necklace they wear once or twice a year in a jewelry box in their closet, or in a safety deposit box? Be sure to inquire about the security of storage areas, and whether they are climate-controlled, have security systems, or have fire prevention measures. Ask if clients take special considerations for fragile items.
3. How frequently do you travel with your items?
“Traveling is one of the biggest areas of risk exposure,” says Appleton. Collectors aren’t likely to bring their artwork or signed baseball bat on vacation with them. But it’s important to know if someone insists on bringing dozens of designer handbags or their entire expensive jewelry collection with them each time they head out of town. Because frequently traveling with such high-value items poses such high risks, it can have an impact on whether your client is even eligible for certain collectible policies.
4. Do you understand the true value of your item?
When it comes to collectibles, getting proper appraisals and valuations can be tricky — but it’s extremely important. Having accurate and up-to-date appraisals ensures that your clients have adequate insurance to protect their items and are compensated appropriately in the event of a loss.
For collectibles with established markets — jewelry and sports cards, for instance — clients can find appraisers who specialize in these items. For more niche and unusual items, like old fishing reels, Wine, or Beanie Babies, “value” can be a bit more subjective and harder to accurately assess. “For these types of items,” Appleton explains, “collectors really need to do their homework about valuations and be able to substantiate the number they come up with.” This is particularly important for collectible policies that operate under the “onus of proof” and require insureds to prove value at the time of a claim.
Value can also fluctuate over time, so having current appraisal documentation for items is important. The value of jewelry and gold coins, for instance, may shift, following current market value. Fine art, on the other hand, may appreciate significantly over time and be worth a lot more now than when a policy was first taken out.
5. Do you transport or loan your collectibles for exhibitions or events?
Some clients may participate in exhibitions or loan their items out to museums or events. Such activities can expose the items to additional risks, and collectors need to understand what collectibles policies will and won’t cover. Some, for example, will cover the items while they are in transit to and from the display location or event. Once those items are outside of the collector’s care, custody is transferred to the museum or event, and they are responsible for any damage or loss.
6. Is this a private, personal collection? Or do you collect for profit?
According to Appleton, “Sometimes there’s confusion around whether a client is a collector or a part-time dealer.” This distinction is important because some collectibles policies are exclusively for private collectors. Although some buying and selling is typical among collectors, if the primary purpose for owning the collectibles is to sell, the collector won’t be eligible for coverage under some policies. “For example,” says Appleton, “MiniCo’s collectible program is for the person who might occasionally go to a trade show and take a few trading cards with him to sell — not the guy selling sports memorabilia on eBay and shipping cards back and forth constantly.”
Insuring Collectibles Means Ensuring Peace of Mind
Collectibles represent a unique and often substantial part of a client’s assets that can be easily overlooked. By asking clients about their collectibles and posing the right questions, agents can provide tailored coverage options and help clients protect and insure their high-value items and treasured belongings.
MiniCo’s exclusive Collectibles program is an ideal solution for a wide range of prized and rare collectibles. From genuine dinosaur fossils to antique furnishings, MiniCo can cover it. In as little as an hour, our agent portal makes it easy to go from quoting to binding to issuing a policy. Learn more about our Collectibles insurance program, and get a quote today.
