If 2017 has taught us anything, it is that the increasing frequency of extreme weather conditions demands extreme preparedness. Next to your family and your home, the most important things you want to protect are the special rare collectibles that give you joy. For many collectors, that could be anything from vintage signs to Buddhist art, wine or jewelry, comic books or paintings.
For insights on how to insure collections and recoup losses due to floods, tornados, and fire, Sortly asked art and antiques appraiser David J. Goldberg of New Orleans for advice. It ranged from hedging against loss to winning an insurance claim.
Step 1. Buy The Right Insurance For Your Collectibles
Before you begin hedging against a weather disaster, be aware that your standard home owner or renter’s insurance policy will likely not compensate you sufficiently for the value of your collection. General benchmarks include coverage of $1,000 on jewelry and up to $2,500 on silverware.
If your collection is of moderate value, you may be able to get by with a valuable items endorsement that covers up to about $50,000 of collectibles.
If you have rare collectibles, or a collection that is strong and well-valued, look into the benefits of working with a specialty insurer. Before you begin your search for the appropriate company and policy, determine if you are a collector or a dealer, or both. Quite often this can skew the numbers in your favor. Another reason to make the determination has to do with taxes, which we will cover in another blog.
A representative well versed in collectibles may advise you that damage or loss rarely cuts across an entire collection. It is usually limited so buy as much insurance as you can comfortably afford.
Step 2. Taking Steps Against Loss
- Before there is even the hint of a climate disaster, create a home inventory of all your collectibles or at least your rare collectibles. Some insurers will need documentation on each item. Others require it only for objects valued at . If you are dealing with heirlooms, consult an appraiser to authenticate value and replacement value.
- Be sure to include any and all markings that will validate the piece in the photograph. This includes the characteristics that make an antique right as well as aging marks.
- Photograph your receipts. Include the name of the dealer or auction gallery, place of purchase and date. If you no longer have this info and you purchased the item through an auction gallery, it is possible the gallery still has the catalog information and price paid.
- Once you have the collection inventory, keep it current. Get periodic appraisals to track the appreciation of your star items. Update images and documentation.
- Keep your home inventory safe and in a place that is easy to reach. With Sortly, it will be available anytime you need it. Paper inventories need to be stored off site from where you collection is kept.
- A home inventory will verify your claim to the insurance company. It will also serve as documentation when you declare a loss on your IRS form.
Step 3. What To Do Before An Impending Natural Disaster
- When disaster is imminent, you must move your most valuable items to a safe place. If different premises are not an option, move the most valuable to a part of the house least likely to be affected by weather conditions. Paintings, for instance, can be hung high if a flood is expected. Some items can be protected in a home safe with a fire rating of at least an hour and a fire seal that expands to protect against fire, smoke and moisture.
- Do what you can but do not under any circumstances endanger your own well being for the safety of the collection.
Step 4. Filing a Claim
- Before filing a claim, take a picture of the damaged item. This will give the adjuster a point of comparison before he makes an inspection.
- Send the image along with the documentation to the insurer.
- Be sure to claim only the damages you can verify. According to Mr. Goldberg, insurers are sensitive to fraud. For example, homeowners in low lying flood zones frequently inflate the value of their oriental rugs.
- Most insurance benefits are negotiable. If you are not satisfied, bring in a professional appraiser to contest the payout.
With a Sortly record, you have everything you need to organize your collection and document it against loss.
Editor’s Note: David J. Goldberg, President of The Appraisal Group, won nearly two-hundred contested insurance claims in the months following Hurricane Katrina.
This Post was written in collaboration with Regina Kolbe, a New York based writer who covers the world of art, auctions, and collectibles.