Insuring your collection
It’s worth insuring a valuable collection, and there are many types of policies you can buy. We’re not insurance experts, so do your own homework and take the information presented here as a starting point:
- Shop around to get the best coverage and rates. If you have homeowner’s insurance, check with that company, and also with other companies that specialize in insuring antiques and collectibles. Talk to other collectors about their experiences with different providers. Some insurers will cover collections in their entirety up to a certain dollar limit, while others will list each item in your collection and assign a specific value to it.
- Take a full inventory and carefully document all the items in your collection. Take high-quality photographs and write a complete description of each item, with as much detail as possible, including the price you paid and any appraisal information. Some insurers only require an itemized inventory over a certain dollar value, but it’s worth doing no matter how big or small your collection. Be sure to keep your inventory updated and notify your insurer as you acquire new items.
- Understand the concept of replacement value. Replacement value is the cost to replace your collection today on the open market (including associated costs like shipping, framing, taxes, etc.), and that is what you (ideally) want to be insured for. Replacement value is not the same as the price you paid, as items may have appreciated in value. It’s also not the same as fair-market value, which the IRS defines as the price a willing buyer would pay a willing seller, neither being under the compulsion to buy or sell (replacement value will likely be higher, because if you can’t wait, you’ll pay more). Note that many collectible items can’t easily be replaced by an identical item, so you must negotiate what you think would be fair with the insurance company.
- Make sure you fully understand the terms of your insurer’s policy. For example, some may stipulate that they’ll restore or replace an antique with an identical modern reproduction worth a fraction of the original. Also understand exactly what situations the policy does and doesn’t cover: fire, theft, accidental breakage, water damage, damage while traveling, etc. And be sure to understand what your responsibilities are in the eyes of the insurance company, such as storing your collection under certain conditions.
- Find out from the insurance company what type of appraisal they’ll accept. Most insurers will require some kind of independent appraisal to ascertain the value of your collection, and the decision about what kind of appraisal/appraiser is acceptable rests entirely with them.
- Take steps to safeguard your collection. This includes security precautions and systems, and storing items in appropriate lighting and climate conditions. Even if you have insurance, it’s better to not have to use it.
- Revisit your policy every three to five years. Antiques and collectibles values can change quickly (up or down), and you may add to your collection or downsize it, so revisit your policy periodically to make sure you’re not over- or under-insured. You may also want to shop around to make sure you’re still getting the best deal.
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