Personal Wine Collections:
What you need to know to protect your investment
I f you’re relying on your basic homowners policy to cover your wine collection, you need to read the fine print. Many policies have exclusions that will lead to a denial of coverage for things like spoilage, loss caused by extreme temperatures, dampness or dryness, or loss that is the result of a power outage.
Anyone with a decent wine collection should think about fully protecting their investment by insuring it on a collections policy. The following are some tips when insuring.
Know the benefits of a collections policy.
Unlike with a homeowners policy, a collections policy is “all risk,” meaning your wine collection is covered for almost every claim scenario.
– Collections policies have no deductible. You are covered for a loss from the first dollar.
– Coverage extends worldwide, so whether your wine is in a home cellar, a storage facility or warehouse, or in transit, it’s protected.
There are two ways to insure under a collections policy.
– Individually schedule: For those higher-value bottles, you’ll want to specifically list each bottle with a description and appraised value. If you have a loss, the carrier will pay out that scheduled value.
– Blanket coverage: Uses one lump sum to protect your collection on a blanket basis. This is a great choice if you are regularly growing your collection but may forget to report new acquisitions to your agent. Just know your policy’s per-bottle limit.
Involve your carrier in your collection.
– Many high-end carriers offer risk management services for no additional fee. Specialists on staff can answer your storage or transportation questions. Some will even visit your home or storage facility to evaluate the conditions and make suggestions to improve them. The carrier Chubb, for example, uses thermal imaging to identify areas of temperature fluctuation that could be harmful to your wines.
What’s in a name?
– This city’s oppressive humidity won’t ruin just your hair – it can also cause mold to grow on bottles or labels.
– If your wine cellar floods, the wines may survive, but the labels may not. An illegible label could diminish, or even eradicate, that bottle’s value. The purpose of a collections policy is to insure not just the wine itself, but the wine’s value. So, no label, no problem – if you’re properly insured.
– Most companies only require appraisals for bottles valued over $10,000. But appraisals are a good idea for all collections so you know its actual value.
– Keep an accurate inventory and don’t forget to report any significant acquisitions to your agent right away. Though many carriers will give you a grace period for reporting, you don’t want to miss that window.
– Don’t forget to also insure your storage space. Control systems, or anything else you install in your home to help with wine storage, should be insured under your homeowners policy.
– If you value your wine collection, make sure you pick an insurance agent who does, too. You want someone who understands the best available coverages and represents the carriers that can provide them.