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Published: Friday, 1/27/2006

From Wine to Wedgewood, Insure Your Collectibles Properly

(ARA) - From fine art and vintage wine to Faberge eggs and shrunken heads, the variety of what people choose to collect can be vast, impressive or even amazingly eccentric. More amazing still is how much these collections are actually worth. However, even the most experienced collectors might not know the ins and outs of assessing the value of their most cherished valuables and protecting their treasures accordingly.

Treating any collectible, whether it s art, wine or even baseball cards, as an investment is crucial. Numerous unforeseen hazards and uncontrollable factors can ruin your collection, causing significant financial loss and often sentimental loss.

"Properly protecting collections you are passionate about includes planning ways to prevent loss and properly insuring your items if a loss does occur," suggests Bob Courtemanche, president of personal insurance, Fireman s Fund Insurance Co. If they are already insured, be sure to understand their most recent appraisal value and the terms of your policy regarding exactly what is and is not insured. The right protection can help prevent major emotional and/or financial distress if catastrophe strikes.

There are three common misperceptions about insurance coverage for valuables and collectibles.

Misconception 1: I insured all my collectibles five years ago so I ll be covered if anything happens.

Reality Check: If your collectible appreciates in value, in most cases it will be covered for its last appraised value, not for its appreciated value.

Tip: Conduct periodic appraisals. Although a few insurers will pay replacement costs of up to 150 percent of the insured value if the value of the collection has escalated, it is still best to conduct periodic appraisals to ensure full coverage.

Have all your valuables and collectibles appraised at least every three years. An appraisal should include the artist, date, media and title of the work, dimensions, notation of condition, summary of provenance, and photographs (front and back). When getting an appraisal, request a second copy to keep in a safe deposit box or a copy that can be stored digitally off-site from your home. As your artwork appreciates, be sure that your insurance limits reflect that increased value.

Misconception 2: My grandmother s Tiffany lamp is insured for its market value, but its sentimental value is worth so much more to me. Clearly insurance would never consider the sentimental value.

Reality Check: Insuring an object can help mitigate the sentimental loss if a piece is damaged.

Tip: If a beloved piece is damaged, a knowledgeable insurer can work with you to have it restored by a qualified art conservator. If a piece of fine art is stolen, the best insurers can also coordinate with law enforcement and art investigators to retrieve pieces that have been stolen.

Misconception 3: I bought a precious vase while vacationing in Europe, but damaged it before I was able to add it to my current insurance policy, so I m out of luck.

Reality Check: Some insurance policies automatically cover valuable items as soon as they are purchased, if you already insure similar items. This automatic coverage may extend for weeks or months.

Tip: Before you travel, it s always a good idea to check your insurance policy to see what is covered, especially if you re planning on visiting art galleries or adding to your collection. Whether your collection has been handed down for generations, or is just beginning to take shape, seek an insurer with an established record of catering to the specialized needs of collectors. Their policies usually contain coverages over and above those for standard valuables, and their on-staff experts will help you protect your passion by providing specific advice, access to professionals and expertise in handling damaged items.

Courtesy of ARA Content.



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