It’s easy to assume that your collectibles are covered by home or renters insurance, but that’s not always the case. Often times, you will only get partial value of your collection in the event of loss or theft, and sometimes you will not be eligible for coverage at all. Here’s a look at what collectible insurance offers, how much it costs, and when to get it.
Why traditional home insurance might fail
Home or tenant insurance is a great way to protect the market value of items in your home as it will cover damage caused by hurricanes, tornadoes, hail, wind, fire, and theft. Unfortunately, these policies do not always cover the assessed value of your collectibles, which can be considerably higher than their cash value. In addition, a standard policy may have coverage limits per item, from $ 500 to $ 2,000.
Collector’s item insurance, on the other hand, differs in several ways: It can cover the full appraised value for a wider range of disasters (such as accidental breakage, flooding and mail damage); it has zero dollar deductibles; and it can be portable, allowing you to make claims outside of your home in certain scenarios, such as if your collectibles are damaged while traveling to an exhibition or trade show. The trade-off with all that extra coverage is the cost. Most collectibles can be insured for 1% to 2% of the coin’s value per year, according to Investopedia.
When to purchase collection insurance
While you don’t necessarily need an appraisal to apply for collectibles insurance, you may want to appraise your collectibles to be sure they are. in fact precious (this Lifehacker post can guide you through the process). If the amount in your collection exceeds the cash value per item limits of your home or tenant insurance policy, then you will want to consider collection insurance.
After that, your next step is to speak with your home insurance company and see what they can offer. Make sure they understand the nature of your collection, itestimated value, and ask if your current policy will cover theft or damage to the full expertise value. You’ll also want to confirm what type of damage is covered and whether flooding or accidental breakage is included.
At this point you can also shop. If you know of other collectors, ask them for recommendations or search for insurance providers online, many of whom specialize in this type of coverage. Finally, as with all insurance policies, carefully review all conditions and the fine print before signing.