Whether you collect fine art, wine, jewelry or other collections, it is important to take precautions to protect your treasures from costly, and often irreparable, damage. Building a collection is not just a passionate pastime but can be a savvy financial move. The value of fine art, jewelry and wine continues to appreciate, but that means that you also need to think about protecting those assets from mishaps.
Being an enthusiastic wine collector is more than just a hobby. Investment-grade wines — including high-end Bordeaux, Burgundies and cult California Cabs — consistently hold their value. Since most of these types of wines get better with age, it gives you time to decide whether you want to drink or sell select bottles. Either way, you can take steps to preserve both the taste and value. When it comes to wine collections, you need to know the threats. Most claims result from five areas:
- Temperature Control Malfunctions
- Theft or Disappearance
- Power Outages
- Water Damage
- Bottle Breakage
Unfortunately, the majority of wine collectors do not have adequate insurance. They accumulate wealth in their cellars, but few think about the perils facing their “liquid” investments and most homeowner’s policies specifically exclude coverage for perishables, such as wine. For one or more bottles valued at less than $1,000 each, you can generally purchase “blanket” coverage under one lump sum. More expensive items can be specifically listed on the policy, with each bottle described and individually insured for a specific value.
Everyone loves beautiful jewelry, but is it insured in cases of loss, damage or theft? The first thing to do is to check your existing homeowners and see what’s covered. Most policies cover up to $1,000 of unscheduled personal property. Some policies go higher, but if you’ve amassed an impressive collection of pieces, you would likely be under-insured. Jewelry collections more than likely would need to be scheduled. This means listing out your items separately. Be sure to have the original receipts, certificated, appraisal and pictures on hand for your insurance agent and for you own record keeping.
Fine Art Collections
For instance, once you purchase a piece of fine art, it’s a good idea to immediately plan your protection strategy. At the time of purchase, inquire as to any special requirements that might be needed for protection. Ask the gallery or dealer for any advice they might have and inquire as to the care and handling instructions. Then speak with your insurance agent about proper coverage in case of damage or theft. Most standard policies have a limitation on the amount of fine arts, paintings and similar articles that may be covered by the personal property limit.
The world of property coverage for the wealthy can be rife with misunderstanding. As there are typically estate-planning and insurance implications for inherited works of art or other collections, having professionals to help navigate is beneficial. While not everyone owns a Picasso or a Chateau Lafite, you should make sure your prized collections have their own protections. Through our network of high end insurance carriers like PURE and CHUBB, the Rogers & Gray Private Client Group provides consultation regarding coverage on higher-end property for clients with significant assets and collections. Contact us to learn more about which product coverage may be applicable to you!