Antiques Road Show, found that many people did not know the limitations of their coverage nor what the policy would actually pay if an item was lost, broken, or stolen. If you have homeowner’s insurance, would it replace that book or books you recently purchased if you accidentally dropped it? If you mail a few pieces for repair, and they are lost in transit, would your policy cover the cost of replacement? If you do have insurance, it’s important to talk to your agent to understand your coverage, its limitations, and on what basis a claim will be paid. If you don’t have insurance coverage, you should consider it. What would happen if a bookshelf collapsed, or you dropped a valuable book and the cover snapped off in the cleaning process? Consider that your collection is no longer just a hobby, but also an investment.
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TYPES OF INSURANCE
Insurance policies covering privately owned collections are often referred to as “scheduled personal property floaters.” These policies are specifically designed to provide coverage for collectibles. Floater policies often provide very broad coverage. For example, coverage is often provided on an “open causes of loss” basis. This includes risks of loss including fire, theft, breakage, and natural disaster. Read the policy carefully to determine the causes of loss insured, the excluded exposures, and the conditions of coverage.
Floater policies offered through insurance companies are classified as either “admitted” or “non-admitted.” Admitted insurance companies are licensed by a state insurance department to conduct business in the particular state and, generally, the coverage forms and rates are required to be submitted to the state insurance department for review and approval. Your homeowner’s insurer is most likely an admitted insurance company. In contrast, non-admitted (also known as surplus lines) insurers are authorized by the state regulator to conduct business in the particular state, but the coverage forms and rates are not regulated. Because the coverage forms and rates used by non-admitted insurers are not regulated, these insurers have the flexibility to design insurance policies that can be used to cover unique or unusual types of property.
There is another difference between admitted and non-admitted insurers. If an admitted insurer becomes financially impaired or insolvent, most state insurance departments have the authority to take over the operation of the company, and most states have a guaranty fund in place to provide payments for covered claims to help minimize the financial loss to policyholders resulting from an insurer’s insolvency. However, state insurance departments do not have the authority to take over the operation of a non-admitted insurer, and the state’s guaranty fund does not respond to insolvencies of non-admitted insurers.
Before obtaining an insurance policy, call your state’s insurance department. Make sure the company is licensed to do business in your state, and request additional information such as the length of time the company has been licensed, types of insurance provided, and any complaints against the company.
POLICY FEATURES AND COVERAGE
Depending on what you want to spend, the following items could be included in any collectibles insurance policy:
* Specific coverage should include theft, vandalism, accidental breakage, fire, lighting, windstorm, flood, water damage, earthquake, and shipping coverage.
* Additions to the collection should be automatically covered for a short time until you can add them onto the existing policy.
* An inflation guard feature that automatically increases the value of your collection each year.
*A reasonable deductible.
* Replacement cost coverage, so that you will be paid the current market retail value of the loss, and not what you originally paid for it.
*Affordable rate of premium to coverage value.
* Detailed inventories or professional appraisals should not be required.
VALUATION OF INVENTORY
For most collections, the insurer should not require a detailed inventory or professional appraisal in order to obtain coverage. However, the company may require a list of individual items with a stated value. This is not uncommon and easily provided if you have kept receipts for your purchases. Although an inventory may not be required, it is still up to you to place a value on your collection. This may be difficult if you have inadequate records or lack an inventory.
BOOK INSURANCE
As the saying goes, if you have more than two of something, you have a collection. But have you ever thought that you may need to insure that collection? And how do you go about it? I hope to provide some answers to those questions and give you information needed to make an informed decision concerning insurance for your collection. There are an estimated 90 million collectors in the United States and over 2,000 general collecting categories and millions of book collectors. The antique and collecting industry is estimated at $30 billion per year. The investment in antiques, art, and collectibles has outperformed many other investments. Although we invest time, money, and space in our collections, the majority of us do not carry insurance for our collections, and we are unaware of our policy’s limitations. A recent survey conducted by Chubb Insurance, underwriters of PBS’s An appraisal is one way of determining the value of your collection. This is a good idea, particularly if you have no idea of its value. Average cost for an appraiser should run from $90 to $120 an hour. Some, however, will quote a flat fee based upon their estimate of time required. Normally, appraisal fees include any travel expenses required but should never be a percentage of value placed on your collection. An inventory of your collection provides you current valuation, records of purchases, spending, and the length of time each item has been in your collection. More importantly, it can assist you with proof of loss when you have a claim. All insurers require some proof of loss, other than your say so. Some documentation of the item, or a sample of the item, will be required. Remember, an inventory of your collection is essential. You need not invest in any software; all you need is pencil and paper. At a minimum, you should track the following information for each item:
- Date purchased
- Good description of item, color, markings, and other unique features
- Size
- Purchase price
- Current value
- Picture of the item (not required but a really good idea)
Finally, assign each item a unique identifier, such as a number or series of letters that will readily lead you to the inventory description. Keep all purchase receipts in a folder and note the inventory number on the receipt. In the case of an actual loss, an inventory description and receipt can be easily found. For those of you who are computer savvy, and like to keep things in order on a PC, it’s fairly easy to create a database in Access or a spreadsheet in Excel or an equivalent software. In addition, there is inventory software specifically designed for collections which are available for purchase on line. These include Collection Master (www.nortica.com); Q Collector, ‘The Computer program for Book Collectors, www.gbooks.com; The Collectibles Database, www.collectiblesdatabase.com; and Collectible Manager, www.ultimediasoftware.com, but you may find more by doing a general search. A number of websites regarding insurance for collectibles are available and very helpful. Do some research and obtain information about several insurance companies before you purchase a policy.
This insurance information that you have just read was based on an article by Bonnie S. Salzman. A special thanks to Bonnie for this very informative and useful article and for granting us permission to share it with you. Bonnie can be reached at bsalzman@msn.com. While there are many insurance companies from which to choose, often your current homeowner’s policy is sufficient for your collectibles. Just remember to compare several options before choosing. Chubb Insurance, one of the leading collectible insurance companies, offers these pointers.
- Itemized coverage – This option allows you to determine the insured value of each of your possessions. In the event of a total covered loss of an item, you will receive 100% of the insured value. There is no deductible, no depreciation, and no surprises.
- 150% replacement cost – Chubb’s valuable articles policy provides safeguards for items that appreciate. If the market value (before the loss) of an item lost or damaged in a covered loss is greater then the itemized amount listed on the policy, they will pay the market value up to 150% of the itemized coverage amount for the item.
- Breakage protection – Coverage for breakage or damage to fragile items is automatically included. This coverage is typically restricted or excluded in homeowners’ policies.
- Coverage for “mysterious disappearance” – Many homeowners’ policies don’t cover valuable items that are lost or misplaced, especially when they disappear away from the home. A Chubb valuable articles policy provides coverage in these situations.
- Worldwide coverage – Your valuables are automatically covered wherever you take them – anywhere in the world.
- Hassle-free appraisal requirements – Unlike many other insurance companies, Chubb does not require an appraisal for every piece that you itemize. For most possessions, they simply need a description of the item and a value. They generally require an appraisal only for fine art worth more than $100,000, jewelry worth more than $50,000, and any other item valued over $25,000.
- Coverage for pairs and sets – If a piece of an itemized pair or set (like earrings or a set of silver) is lost or damaged in a covered loss, you have the option to provide them with the remaining piece(s), and you will receive the coverage amount for the entire set. (This is a great insurance feature or book collectors.)
- Cash settlement – Unlike other insurance companies, you are not required to replace itemized valuables in the event of a loss. You can choose a cash settlement or replace your valuables with the dealer of your choice. The decision is yours.
- Coverage for newly acquired items – If you acquire a new item and already have similar items insured with itemized coverage, your new item is automatically covered for 90 days for up to 25% of the total itemized coverage for those similar articles (maximum $50,000).
For more information about Chubb’s coverage or to get a quote
contact www.Chubb.com or call the Chubb Customer Care Team at 866-324-8222.
Here is a list of several other insurance companies that you might want to research:
ASSOCIATION OF INSURANCE ADMINISTRATION
P.O. Box 4389
Davidson, NC 28036
COLLECTIBLES INSURANCE AGENCY
P.O. Box 1200
Westminster, MD 21158
Recently I reviewed insurance cost online. One site www.collectors.org, which offers replacement cost coverage and an “all risk coverage including, fire, lightning, windstorm, vandalism, theft, accidental breakage, flood, earthquake, and shipping coverage,” posted a chart giving you an idea of how much they charge per thousand dollars worth of coverage. For example: $20,000 worth of coverage for $50.00 a year $50,000 worth of coverage for $125.00 a year $100,000 worth of coverage for $175.00 a year $200,000 worth of coverage for $275.00 a year.
There is much to consider when purchasing adequate insurance coverage for your books. This information should assist you in making an informed decision concerning your insurance needs. It is IMPORTANT to remember that Your homeowners’ already affords you adequate coverage under a standard replacement cost clause. However, read your policy carefully to be absolutely certain that your collectibles are included. If you want coverage for accidental damage from dropping your book, water damage, insect damage, your standard homeowners’ policy will most likely required additional coverage.
BOOK APPRAISERS
Although many insurance companies do not require an appraisal on each and every book, it is preferable to have one for your own purposes. To provide the insurance company with enough information when determining adequate coverage, you must know the total value of your collection.
Additionally, many insurance companies only give your “basis” in the event of a loss, i.e., what you paid for the items, unless you prove what the current value is. For example, you have a book that you have owned for ten years and you purchased it for $30. Let’s say the current value of the book is $400. So your basis is $30 but your replacement cost if $400. It is essential to have at least replacement value. The appraisal will be helpful in proving that the replacement value is in fact $400.
There are several ways to obtain such an appraisal. One is to find someone locally who has been in the business of selling rare leather bindings for many years.
Another is the ABAA organization website which lists dealers specializing in bindings. Or you and ask us to appraise your collection for you All we would need is a high quality, detailed scan or image of the book, we can evaluate the book’s condition and determine the type of binding. Then, upon listing the author, title, publisher date, and other significant details , we will be able to provide a high quality appraisal. Contact us at artbout@gmail.com