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Last updated: 20 May 2020
Britons own £222 billion of collectibles but nearly a quarter (23%) don’t have them properly insured, according to insurers Direct Line. That means millions of us are at risk of massive financial, and also sentimental, losses, should our homes be targeted by thieves or fall victim to other natural disasters.
While most home contents insurance policies will apply to valuable, collectible items, there will be limits to their coverage including maximum payouts for single items and an overall limit for the total payout. If you’re a keen collector, you may want to look for specialist collectors’ insurance, to give your collection whether it be shoes, garden gnomes or wine, all the protection fitting of your interest and investment in it.
Insuring Your Collection with a Home Insurance Policy
Many collections can be insured under your standard home contents insurance policy. These policies compensate you for the value of the items if they’re lost or damaged due to theft, fire, storms, and other natural disasters and accidents.
In most cases, these insurance policies will have a limit on the amount they’ll pay out for an individual item. This is usually £1,000 or £1,500 but will depend on the policy. You’ll have to declare these high-value items individually to your insurer.
Additionally, home insurance
policies will have a maximum amount they’ll compensate you in total for loss of home contents. If your collection is worth more than this amount, you won’t be fully compensated in the event of its loss. Additionally, you’ll need to consider the value of the other contents of your home, so you’re not compensated exclusively for your stamp collection and don’t have the funds left to replace the other necessities of living.
If your collection is particularly high value, or even if it just has a few very high value items, you might want to consider specialist insurance.
Insuring Your Collection with a Collectors’ Insurance Policy
Collectors’ insurance, also called collectibles insurance, is a contents policy tailored to the value and unique risks posed to collectibles. It pays out much like an ordinary home contents policy but covers more high-value collections and individual high-value items.
Additionally, providers of these policies have experience covering many and varied collections, and may be able to help you arrive at a reasonable valuation and sum insured.
What does collectors’ insurance cover?
Collections aren’t just for the wealthy and the eccentric. Reportedly, 57% of Brits own collectible items valued at more than £500. This can include
- musical instruments
- fashion items and accessories
- military items and weapons
- model trains
A collection is anything you’ve spent significant amounts of time and/or money investing in and building and which has value to you, sentimental and/or monetary.
How do you value your collection?
Arriving at a sum insured—the total amount your policy would pay out in the event of total loss is always tricky but for collectibles, which have no price tags and have values that fluctuate based on age, rarity, reputation and demand, it can be especially difficult. You don't want to over-insure your collection and saddle yourself with unaffordable premiums, but you also don’t want to underestimate its value and discover you can’t claim adequate compensation.
In valuing a collection as part of the application for insurance, you should generally seek out the advice of a qualified appraiser. This may be an art dealer, an expert in a particular field or an auction house. You should also have your collection re-valued every year or two, to account for fluctuations in value and ensure you're not left either over or underinsured.
Collectors’ policies typically offer agreed-value cover, covering up to a sum agreed between you the insurer and an appraiser, rather than the market value of the items.
Coverage Offered by Collectors’ Insurance
Collectors’ insurance policies can also be tailored for the unique risks posed to your particular collection.
- temporary location cover: protects your collection if it’s moved to a museum or other location for an exhibition or show; it can be extended to include worldwide cover.
- emergency evacuation cover: coverage if you need to move your collection quickly in the event of an emergency, such as a natural disaster
- accidental damage cover: compensates you for the repair or the value of items that are accidentally damaged by you or one of your family members or guests.
- depreciation cover: this policy can help you recover lost value, should your collection depreciate in value after a repair or if items cannot be repaired.
- defective title cover: compensates you for the cost of your collectibles, in the event someone claims the items rightfully belong to them.
- legal expenses: covers you for legal expenses associated with your collection, such as emanating from disputes around the buying and selling of items.