The chances are good that among your personal-lines clients,there are several serious collectors. What do they collect? Thesimple answer is: practically anything

Some of the most commonly collected items include fine art,sports memorabilia, wine, rare books, stamps and coins, antiquerugs and tapestries, musical instruments, action figures, dolls,toys, auto and movie memorabilia, and guns.

Large private collections generally have proper risk managementin place including fine-art insurance that covers the full value ofthe items. But many smaller collections (those valued below $1million) tend to be insured under a traditional homeowners policyor have no insurance at all. If these collectors face a devastatingevent resulting in damage, they may discover too late that theircoverage is not sufficient to address their financial losses.

In simple terms, the process of insuring collections offine art and collectibles under a traditional homeowners policytends to be time-consuming and difficult while possibly yieldinglower limits and less expansive coverage when compared to obtainingcoverage with a fine art and collectible insurance policy. Thecomparisons below address specific differences between the twotypes of policies.

Appraisals – Homeowners policies generallyrequire appraisals for collections over $5000 as part of theunderwriting process. Many collectibles insurance policies do notrequire appraisals at the time of application.

Deductibles – Zero-dollar deductibles are thestandard for collectibles insurance polices with some offeringadditional deductible options. Homeowners policies may offerzero-deductible policies, but it is not ascommon.

Limits – The limit on fine art and collectiblescoverage generally ranges from $500 to $2000 for a homeownerspolicy without the addition of a floater or rider. Even with anadded floater or rider, homeowners policies tend to limit the levelof exposure. A collectibles policy may offer coverage up to $1million or more.

Coverage – One of the most important coveragedifferences between a homeowners policy and collectibles policy isthe valuation of covered items. Homeowners policies tend to insurefor actual cash value while collectibles policies insure the full collectible value of items in thecollection. This distinction alone can reflect a startlingdifference in potential claims payments in the event of a loss.Homeowners policies generally cover named perils only, excludecoverage for items during transit, limit coverage on items storedaway from the home to as little as 10 to 15 percent, and extendcoverage to newly acquired items for only 30 days. By contrast,collectibles policies typically include all risk coverage andprovide coverage for items in transit, items stored away from thehome (such as in an office or storage facility), and newly acquireditems for up to 90 days. Some collectibles policies may offeradditional coverage benefits such as discounts for monitored fireand burglar alarms or items kept in a UL-rated safe.

Claims – In today's insurance market, filing aclaim against a homeowners policy may leave an insured vulnerableto premium increases at renewal or the possibility of non-renewal.With a separate collectibles policy, claims do not affect homeownerpremiums or loss history. In addition, companies that offercollectibles insurance may have claims adjusters with a high levelof expertise in this area. Adjusters with this specializedknowledge are better able to determine the value of unique or rareitems, which should expedite the claims process and lead to abetter outcome for the insured.

A detailed comparison of the benefits and limitations ofstandard homeowners insurance versus collectibles insurancedemonstrates that specialty coverage can be very advantageous forserious collectors. With upwards of 90 million collectors in theUnited States, there is a large and growing market for collectiblesinsurance.

Collectibles insurance is easy to offer to your existingpersonal lines clients and tends to be well received once theclient understands the benefits and its ability to add a layer ofprotection for a treasured and financially valuable collection.