Protecting Your Prized Possessions

Cathy Kerhulas of HUB International offers advice on how to keep collections and valuables private with these seven considerations

Curators of fine art, wine, antiques, and other valuables are passionate about their collections. Whether they be family heirlooms or procured rarities, collectibles can hold a tremendous amount of value, much the same as traditional stocks and bonds do. They may even transcend monetary value to their owner. Yet, despite the sentiments that can accompany this kind of investment, collectors often fail to manage the risks involved with their collections—such as natural and criminal disasters—as they might do with more traditional financial investments. Understanding these risks and how to mitigate them can prevent a world of heartache.

Begin by working with a broker with dedicated expertise in protecting valuables who has access to insurance carriers that specialize in insuring collections. Depending on your collection profile and total value, your broker can secure the coverage by adding riders to your homeowners policy or by procuring a separate specialty policy.

[To read more of Cathy Kerhulas’ thought leadership click here]

It’s also vitally important to keep your fine arts insurance policies and your appraisals updated as you grow your collection. To encourage this and ease the burden, insurance carriers that specialize in high valued collections typically offer collections management and appraisal services. For example, PURE Insurance offers the assistance of a PURE Member Advocate®, which among many services, can schedule appraisals, locate home security vendors, and recommend the right kind of safe to secure your valuables.

Seven steps collectors can take to protect their passion investments:

1. Assemble the right team of experts

Understanding asset values and potential loss exposures is the first step. Get advice on how to best safeguard your collection from a team of experts: your insurance broker, the insurance company your broker recommends, and an appraiser. An art conservation laboratory may also be needed, depending on your collection.

2. Establish a system for tracking and valuing items.

As your collection grows, it’s important to have a system in place for tracking and valuation of items. Consider purchasing collection management software to track details such as the name of the object, size, condition, date of purchase, and appraisal record.

3. Exercise caution when displaying and storing items.

Avoid hanging paintings close to the floor where they are vulnerable to flood waters and damage from children and pets. Never display art above an active fireplace. Don’t place valuable rugs, paintings, or antiques in areas with the potential for leakage, flooding, or excessive sunlight. If wine is your passion, store it in a temperature-controlled wine cellar where it can’t be damaged by flood water.

As your collection grows, it’s important to have a system in place for tracking and valuation of items. Consider purchasing collection management software to track details such as the name of the object, size, condition, date of purchase, and appraisal record.

4. Focus on safety when shipping and loaning.

Use professional, reputable art shippers. If you’re shipping by air, consider the Transportation Safety Administration’s (TSA) Certified Cargo Screening program. It allows certified art shippers to inspect and seal packages and reduces the risk of airport security damaging your items. If you loan valuable items to a museum, have your insurance broker examine the museum’s insurance policy to make sure your collection is appropriately covered.

5. Expect the unexpected.

Make sure your home has functional fire and smoke detection systems and consider installing a waterless fire protection system. Consider investing in perimeter and external security systems. If you need to move pieces from your home on short notice (e.g., during wildfire season), create a relationship with an art transportation company and prioritize pieces for evacuation.

6. Properly insure your items.

Many collectors do not secure proper coverage for their passion investments. Too often they over-insure against minor risks and under-insure against major ones. Make sure your policy includes coverage for:

Floods and earthquakes. A basic home-
owners plan usually excludes water back-ups, so make sure you have an all-risk po-
licy that includes unlimited backup of sewers, drains, and sump pumps.

Mold. If there’s flooding in your home, mold won’t be far behind—and it could seriously damage objects in your collection. All standard homeowners policies have limitations for mold, but extra coverage can be purchased.

Worldwide territory. You’ll want coverage for your belongings worldwide, including during transit and shipping. Then, when an object is lost, stolen, or damaged, its monetary value will be covered.

7. Valued Items Rider.

Standard homeowners policies have minimal coverage for items like jewelry, furs, and wine, but a Valued Items Rider will pay market value up to 50% higher than the scheduled amount of coverage

[For more on HUB International’s approach to Asset Protection click here]