Private collections, whether they comprise rare art pieces, vintage cars, exquisite jewelry, or other unique treasures, hold immense value not only in terms of monetary worth but also in sentimental value. As insurance agents, understanding the nuances of insuring private collections is pivotal to ensuring collectors safeguard their cherished possessions. In this blog, we’ll dive into the world of private collection insurance, offering valuable insight that can guide insurance agents in providing tailored coverage solutions.
Defining Valuable Items for Private Collections
In private collections, the term ‘valuable items’ encompasses various collectible pieces that range in size, value, historical context, cultural significance, current market trends, and more. It’s beneficial for insurance agents to clearly understand what falls under this category to offer appropriate coverage solutions. Here are some common types of valuable items that collectors might include in their private collections:
- Fine art: Fine art encompasses paintings, sculptures, and other forms of artistic expression. It’s common for works of art from renowned artists or pieces from pivotal artistic movements to be worth anywhere from tens of thousands to millions of dollars. Imagine browsing someone’s living room and seeing dozens of Peter Keil’s paintings and a handful of Banksy’s artwork — these tend to be worth thousands of dollars a piece.
- Jewelry & watches: Jewelry and watches are also considered valuable items; they often feature rare gemstones and precious metals. Their value can also be attributed to a specific type of craftsmanship, history, and materials used. Often, even the very reputation of the watchmaker or jeweler can add value to the items.
- Antique furniture: Antique furniture holds a timeless charm and historical significance, and because it features designs from bygone eras, it tends to be lucrative.
- Stamps: Stamps showcase the evolution of postal systems, and they serve as windows to history, culture, and art. Rare stamps can be worth hundreds of dollars.
- Coins: Coins can accrue immense value due to their rarity and historical context — mainly because some are no longer produced after a given date.
- Handbags: High-end fashion pieces, such as designer handbags, are valuable due to their brand reputation, craftsmanship, the type of materials used, and due to their limited availability.
- Sports memorabilia: Sports memorabilia captures moments of triumph and heroism in athletics. Because they feature famous athletes, they are immensely profitable.
- Wine & whisky: Collectors prize rare vintage bottles and those bottles with a cultural history attached to them. Because wine and whisky accrue value with age, they are an alternative investment for many collectors.
The Limitations of a Homeowners Policy
Collectors of valuable items may opt for a homeowners policy to cover their private collections due to convenience. However, what feels like a time-saving option in the beginning may prove to become a very costly decision
Although homeowners policies usually include coverage for personal property, which can extend to their private collection, coverage tends to be limited. For example, a homeowners policy may protect the collection at a defined location (e.g., at the owner’s home) but may not extend beyond that given geographic area. The limitations of a homeowners policy may not be problematic if it wasn’t for a common trend — private collections often move for purposes of exhibitions, loans, and restoration. During transit, these collections can either get damaged or lost. Hence, a homeowners policy is ill-equipped for these types of risk exposures.
Additionally, while a homeowners policy can protect valuable items such as jewelry and watches, it does come with an insurance cap — typically around $25k. The insurance cap means that if your client has a collection worth hundreds of thousands of dollars, they are susceptible to being underinsured with a traditional homeowners policy. Not to mention, some collectible items may be excluded entirely from coverage with a homeowners insurance program, no matter how valuable they are.
What is a Private Collections Policy?
A private collection policy is specialized insurance coverage designed to protect valuable and often unique collections that avid collectors own.
Unlike standard homeowners insurance — which commonly offers a limited range of personal belongings — this specialty insurance provides tailored coverage that addresses the specific needs and risks associated with valuable collections.
In both these scenarios, the collectible item is in a transit journey, and it can face risks such as theft, loss, and damage. Fortunately, agents can ensure that their clients’ collections are covered during transit and while on display in temporary locations via a private collection policy.
You can be confident that your client’s collection is fully protected because Jencap provides access to the following coverage:
- Up to $10 million USD capacity for any one collection/any one location
- Broad geographic coverage: At a specific location, while in transit, and other temporary places of residence
- Scheduled items: A Private Collection Policy will pay for the costs to repair or replace a client’s collection at an agreed value basis (i.e. values are authorized and agreed prior to the inception of the policy)
- Blanket items: Market value up to $25K USD per item or $1K for wine/spirits
- Fully comprehensive coverage that covers the following risks exposures:
- Physical loss
- Damage
- Accidental damage
Enhance your clients’ confidence in their investments and allow them to preserve their collections’ financial and emotional value. Don’t miss out on providing this crucial layer of protection. If you’re looking to safeguard your client’s prized private collections, Jencap provides unparalleled access to the nation’s leading private collections insurance. Become a collector’s ally and secure their legacies for future generations — contact us today for a quote.
