Insuring Your Collection
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Whether you collect sports memorabilia for casual display, long term investment, or as a small business, proper documentation of your collection is critical to protecting the value of your collection. There are numerous reasons to document a collection:
Documenting and Insuring a Vintage Sports Equipment Collection
A collector's homeowner's insurance policy is typically the sole form of insurance for most collectors. Homeowner's policies typically provide three areas of coverage; the home and ancillary structures, the personal property within the home, and liability due to homeowner negligence. Collectibles fall under Coverage C - Personal Property. The typical homeowner's insurance policy caps the coverage under Coverage C to 50% of the replacement cost of the home. For example, for a home with a $200,000 replacement cost, the typical policy would provide $100,000 in personal property coverage. For most collectors, the personal property coverage of a standard homeowner's insurance policy would appear to be adequate to protect their collection. However, it is important that you review your policy to make sure that you fully understand its requirements and limitations. Important questions include:
Personal Article Policy
A personal article policy covers a specific collectible or group of collectibles and may be a better choice for some collections. A personal article policy differs from coverage under a homeowner's policy in several ways:
- To establish a value for your collectibles for insurance coverage and to support a claim in the event of a loss.
- To verify your ownership
of the items in your collection.
- To aid in the recovery of your collectibles in the case of loss or theft.
- To assist your family or
beneficiaries in placing a value on your collection or individual items.
- To maintain a record of pertinent information on your collectibles
such as the acquisition price, condition, and provenance.
Your personal property coverage limit needs to cover the replacement value of your furniture, clothing, housewares, electronics, tools, etc., in addition to the value of your collection. Creating an itemized list of the contents of your home and the estimated replacement value is essential in determining whether or not you have sufficient coverage. At an average cost of $3.50 per $1,000 in value (0.35%), increasing your policy amount is a relatively inexpensive protection for your investment. You should also speak with your insurance agent about coverage limitations if you occasionally house your collection out of your home.
Covered perils typically include theft, fire, smoke, water, and vandalism. Damage to collections caused by pets, rodents, or insects, certain environmental conditions, or accidental human actions are typically not covered. Riders may be available for your policy to protect your collection from unnamed perils, or a Personal Article Policy may be a better choice.
Depending on the estimated value of your collectible(s), your insurance company may request that you obtain an appraisal from a licensed appraiser in the field of sports collectibles for a personal article policy. For high valued collections covered by homeowner's insurance, the provider may want an appraisal as well. This requirement varies by insurance company. Most require appraisals for jewelry valued at over $5,000.00 and this may be their limit for collectibles as well. A typical appraisal for a sports collectible should range from $400-$600 depending on the item. For that reason, appraisals are usually limited to high value items.
- Is the personal property coverage amount sufficient to recover the value of all the contents of your home, including your collection?
- Is your collection sufficiently protected under your policy's named perils?
- Is the deductible limit acceptable?
- Do you have adequate
documentation of your collection to justify a future claim?
I recently began the process of documenting my collection for insurance purposes and initially came to the same conclusion. I knew my collection was valuable, but I needed to be able to quantify that value to my insurance carrier. After playing around with a number of different cataloging options, I created by own custom Digital Collection Archive forms using Adobe LiveCycle. The standardized forms allow me to input photos, descriptions, provenance, and value information on each item in my collection and then save each print out as a pdf file on my computer, disk, or on the cloud.
So why do so few of us document our collections? The primary reason is usually that it is a time consuming and boring process. Most collectors start out small and don't feel that documentation is necessary initially. Before long, the collection has grown in value and size and the process of documenting it seems daunting.
I am providing free forms for collectors to download here:
The forms can be customized for any type of collection or collectible, including cards, photos, memorabilia, and equipment for all sports. Entry labels, picture window sizes, and custom header images can all be modified for your specific collection. If the free forms don't meet your needs, please contact me for a customized digital collection archive quote.
Insurance deductibles usually range from $500 to $1,000. Typically, the higher the deductible, the lower the cost of insurance. Deductible limits for homeowner's policies should be established based on your risk tolerance.
Insurance companies recommend that you video document the contents of your home every 6 to 12 months to support the value of your personal property. Remember that in a claims situation, without adequate documentation, it will be up to the insurance claims adjuster to assign a value to your loss. Creating a Digital Collection Archive is a great way to document the condition of your collection, keep track of acquisition information, and to record comparable sales values to support a future claim. Particularly with vintage sports uniforms and equipment, comparable sales data can be very difficult to find after a loss. I highly recommend that all collectors create a digital archive of their collection in addition to regular video documentation. Perhaps the most important part of adequately documenting a collection is storing that documentation in a protected location. A digital archive should be stored on a disk or memory stick in a safety deposit box, on the cloud, or in a fireproof box in your home. I also recommend that you proactively send a copy of your archive to your insurance agent to determine whether or not there are any gaps in your coverage.
Your home, retirement account, and savings account are most likely insured from loss, your collections should be as well. Many collectors forgo contributions to retirement accounts to purchase sports collectibles as a form of investment. A loss of this investment could be catastrophic for collectors and their beneficiaries.
- Typically covers all loss other than the intentional actions of the owner.
- Establishes the value of your collectibles up front rather
than it being up for debate after a loss.
- Insures the collectible regardless if a loss occurs in your home.
- Can have no deductible.
Providing significantly more protection for your collection, a personal article policy is considerably more expensive than coverage under a homeowner's policy. Whether or not a personal article policy is right for you depends on the value of your collectible and your risk tolerance. For collections that have a few highly valuable pieces, a combination of homeowner's insurance and a personal article policy for those pieces may be a good compromise.
Example of a completed digital collection archive
Example of a completed digital collection archive