Hobbies are great at keeping people productive even in their leisure time. People take up all sorts of hobbies for a lot of different reasons. Some do it to keep them mentally sharp. Others get into hobbies that require them to be physically active just for the exercise. Still, others get into it for nostalgia. Different strokes for different folks.
But there is one hobby that is very popular among people, and that is collecting. From antiques to vintage collectibles to rare toys and other collectible items, the choices are endless. Some people go to beaches and trails to collect shells and rocks. Others go to flea markets and estate sales to score antique and vintage items. Big-time collectors also invest a lot of money with artworks and jewelry.
Different collections cost some collectors a good deal of money. For instance, hardcore comic book collectors are willing to spend thousands of dollars to acquire rare comic books just to fill in gaps in their collection. Collectors of fine jewelry invest a lot of money to purchase an exotic piece from a trusted jeweler. And don’t even get us started on expensive artwork and antique pieces.
Should you get collectibles insurance?
That being said, is there a way for collectors to protect their investments? After all, once a certain collection starts to get valuable, practicality dictates that you should get it insured. However, most homeowner’s insurance either limits or excludes coverage on collectibles and artwork.
If you have quite a decent valuable collection, you have two options. One, you can schedule an item or add a rider to your current policy, or two, you might want to consider looking for a collectibles insurance provider.
Generally, insurance for collectibles is quite affordable. Well, it still is subject to an item’s worth but it generally costs 1 to 2% of the item’s value. For instance, if an item costs $10,000, expect to pay $100 to $200 annually to have that piece insured.
Contact your insurance provider and ask for a quote and figure out how you can go about it.
What does art and collectibles insurance cover?
Just like any insurance policy, collectibles insurance gives the collector certain coverage for their items including:
Theft
If a piece of your collection or all of it gets stolen, the insurance policy will cover the cost of the items depending on your policy.
Damage
Accidental damages, whether partial or total, are covered by the insurance provider. For instance, one of the sculptures in your collection gets broken or gets damaged in a fire, you’re typically covered whether part of it catches fire or is totally destroyed.
Loss and Disappearance
Even if you accidentally misplace your collectible piece, all scheduled items are generally covered by the policy.
What doesn’t it cover?
Very expensive items
Most, if not all, insurance companies have a limit on the items they will insure. The limit will vary depending on your policy but if your collection is more than the company’s maximum coverage amount, you will need another completely separate insurance policy.
Wear and Tear
Understandably, certain collections are prone to wear and tear over the years. Items that deteriorate or get damaged because of age, like baseball cards or toys, are not covered by the policy.
Artwork outside your home
If you’re loaning your items out to others or have them on display in a gallery, these are not covered by insurance.
How to Make Sure You’re Fully Covered
It’s cringing for any collector to think about any piece of their collection getting damaged, stolen, or destroyed. So for your peace of mind, you need to make sure that your items are fully covered.
Here’s how you can ensure that your collection and ultimately, your money is protected:
Step 1: Revisit your current homeowner’s insurance policy
Take out your current policy and go over it once again and see what it says about coverage for special items. As stated above, some policies include coverage for these things but only to a certain extent. If you think your collection is worth more than what’s provided in your policy, talk to your insurer about it.
Step 2: Make a detailed log of your collection
Keep in mind that you cannot make any claim unless you’re able to prove what you own and how much they’re worth. So make a detailed list of your collection outlining the items, the date of purchase, the acquisition cost, and other important details that can show how much its value is.
Step 3: Have your collection appraised
An appraisal is always a good thing to consider when it comes to determining the current value of a collectible. Generally, it’s easy to look for appraisers but if you have a more specialized collection, you will need a more qualified appraiser to take a look at them to get a more accurate evaluation.
Step 4: Look for an insurer
Lastly, once you already know how much your collection is actually worth, it’s time to look for an insurer. You can start with your present insurance provider but you can also shop around for others that can offer you better coverage for your investment.
Your collectibles, especially the pricier ones, can be considered personal investments. For this reason, you need to protect your investments by insuring your collection. This will give you peace of mind that if anything terrible should happen to your collection, you have protection for it which will allow you to recoup most of what you have invested.
