Owning unique, hard-to-value items and not insuring them is like passing up the curtain at a game show. You know something of value may be behind it, but you choose to take your chances on another shiny object. There’s always tomorrow for curtain number two.
We get it. Shopping for speciality insurance policies can be daunting, and there are so many other “housekeeping” tasks that feel more immediate and appealing. On the big to-do list of life’s needs, speciality insurance often falls between learning a new language and reinvesting one’s 401(k).
So let’s make it easy by removing some of the guesswork. This short list of straightforward questions will help you determine the most appropriate policy for your valuables – at a fair price.
Does your current insurance carrier regularly handle valuable, rare objects?
Century-old baseball cards are not the same as fur coats or golf clubs. Such tems require highly specialized knowledge, and coverage. Confirm the insurer provides specialized art risk management services, and has been given top ranking in financial solvency by one or more rating agencies, such as Fitch, Moody’s or Standard & Poor’s. A few insurance carriers that offer specialty policies are Chubb, Farmers and Fireman’s Fund.
Does your insurance broker specialize in insuring artwork?
If you own art, pointedly ask about the degree of experience your broker has in handling fine art claims. The insurer should provide an annual review of your insurance program that will detail artwork coverage – ask for this upfront. Also ask what services your broker provides and confirm that the process is streamlined and transparent. In short, be comfortable you understand what you are reading.
Is your appraisal accurate?
Before expecting your broker to put a value on your items, take stock of what you know yourself. This will help the process. Among the questions you should try to answer:
Do I know the retail replacement value of each object?
Do I know the total value of the personal property I want to insure?
Do I have a recent appraisal with a written inventory and images?
The answers to these questions will help ensure your items are covered optimally, and may determine that you require a formal appraisal. If the entire group of items has a combined retail replacement value of more than $1 million, for instance, this will affect the kind of policy you need.
A qualified appraiser who has experience with the type of objects you own will be able to prepare a report that the insurance company will accept. An appraisal prepared using generally accepted methods helps protect you and the insurer from fraud. Also, the appraisal should be updated every 3 to 5 years in consideration of market fluctuations, so your premiums accurately reflect the amount of insurance you need. No more, no less.
Over insuring items can cost thousands of dollars over time.
Do you know your policy and “per item” limits?
That being said, you should schedule, or list, individual objects that carry values that exceed per-item limits. Under scheduled policies, a value is placed on individual items and you pay an appropriate premium per item. Blanket coverage is appropriate for collections with numerous items of moderate value.
Are your objects in storage?
If yes, specify the type of storage facility in your policy. You will want to indicate the location by address and describe the environmental controls, such as around-the-clock guards and humidity monitors. This information is critical for ensuring proper underwriting and coverage.
Do your objects move or travel?
If you are a dealer and you travel to shows, or if pieces in your collection may you in exhibitions, transportation risks should be part of your coverage.. Mishaps are more likely to occur when objects are being moved, so make sure items are fully insured during transit.
Did you ask the insurance broker the essential questions?
Before completing any insurance transaction, ask these basic but easily overlooked questions:
“Can you send me a hard copy of the policy?” (Read the policy before you sign it, please!)
“Are there any exclusions?” (Mold is a common exclusion, for example.)
“Am I eligible for any discounts?” (Security systems, climate control, safes and certain condominium policies – if covered by the same insurer – may warrant a discount. You never know until you ask!)
OTHER QUESTIONS FOR THE BROKER?
Questions about deductibles?
Can I add items to this policy?
Do I have an emergency contact number?
Lastly, shop around. You may find that one company provides better coverage on jewelry than paintings. Or you may learn that two companies provide virtually the same policy on collectibles, but one insurer is more favorably priced.
Take notes and invest a little time researching, so you make the best-educated decision. It will pay off.
Insurance should not be a guessing game. Pull aside the curtain that shields the value of your unique objects. By asking these questions, you can easily shop insurers to reveal the best policy for your items.