December and January are perfect months to review personal insurance. My wife and I just went through such an analysis with our life and disability insurance agent. The rule of thumb is that if you want to live a long life, buy a lot of life insurance.
When reviewing personal insurance, one of the most overlooked areas has to do with insuring valuable pieces of personal property and collectibles. Many think their personal property coverage under a homeowner’s policy covers these items. However, standard homeowner’s policies contain significant limitations for coverage of valuables. The bottom line is that if you have collectibles of value, even one valuable item, you almost certainly need a specialty policy. An article in Best’s Review highlights the often overlooked coverage.
What are collectibles? Art, antiques, cars, Barbie dolls, trains, baseball cards, Elvis memorabilia, stamps, coins, comic books, wine, vinyl records, books, glass figurines, autographs, and virtually anything another would pay money for at auction.
I collect old United States postage stamps and insure them under a specialized policy for stamp collectors. This nerdy endeavor started before I was ten. Filling up the empty spaces in my stamp album where the rare stamps went was impossible when I was young. Now that I am older and a lot more foolish, I bid against other crazy people to fill those spaces. My favorite stamp is one with an upside down airplane on it.
Most standard homeowners policies do not pay loss of market value for these items and have significant dollar limitations on recovery. Most collector’s insurance policies pay the reduction and loss of market value when a loss occurs. Further, the deductibles are generally less and, unlike most homeowner policies, the perils of flood, earthquake, accidental breakage, and expanded water loss are generally covered.
If you do not want to be underinsured and you are fortunate enough to have items of financial value, do yourself a favor and buy collector’s coverage. The peace of mind that comes when insuring these items cannot be overstated.
I once had a client who lost a valuable collection. He told me that the money he received from his collector’s insurance policy allowed him to go back and enjoy the process of accumulating items for his collection. His passion for what he truly enjoyed was restored. As is often the case in life, wanting and obtaining is often far more pleasurable than the having.
