After over a year of social distancing and months of lockdown as a result of COVID–19, consumers have been forced to shop differently and behave differently. Many of us have picked up new hobbies and our spending habits have changed significantly. For some, new hobbies have included bike riding, long walks, and playing tennis. For many longtime collectors, the past year has allowed them to expand their passions, adding baseball cards or model cars to their shelves, or taking stock of what they already own, and purging some of their pieces.
Last month, a 1952 Mickey Mantle card in mint condition sold for a record $5.2 million. This month a copy of the first appearance of Spider-man sold for $1.1 million. Just the latest examples of how million-dollar sales and speculative traders are turning a one-time children’s hobby into an "investment". However, for those who have a valuable collection, you may need to seek out separate collectibles insurance. Here are the steps to make sure you’re fully covered:
1. Review Your Current Homeowners Policy
It is prudent to do this at least once a year anyway, but it is particularly important to read what your policy says about collections. For instance, it may set a dollar limit on how much it'll pay for certain categories of valuables like jewelry (sometimes there's even a per-item limit) or there may be a $1,500 sub-limit on what your insurance will pay for jewelry after a theft. So if you file a claim for the theft of a $500 piece of jewelry you may be in good shape, however, if the jewelry has a value of $2,000 you may not be fully covered.
2. Consider Documenting Your Collections
Scheduled personal property or collection coverage is a coverage enhancement or endorsement that can be added to your existing policy to raise payout limits on those high-value items. According to the Insurance Information Institute, you will usually need to provide your insurance company with a receipt or a recent professional appraisal to have items scheduled on your new or existing policy. The benefits of scheduling your high-value items often include broader protection from misplacement (dropping your wedding ring down the drain, for example) and other additional risks such as theft and fire.
3. Review Your Options
As with any kind of insurance, shop around a little before deciding on a company. Certain insurers require different documentation. In addition to lower premiums, you’ll want your policy to cover a wide range of losses, including breakage, fire, theft, or loss in the mail. You'll also want to know your provider has a strong credit rating: You can verify an insurer’s credit rating by evaluating their AM Best Rating here.
As a part of our value-added services, at DWM, although we do not sell any insurance, we review our client's insurance items and provide a second set of eyes. We believe it is prudent to do so to ensure our client's assets and long-term wealth are protected. We also review the cost of coverage as well. If you have any questions about your collectibles and other insurance items please do not hesitate to reach out.