Collectible Insurers Offer More Than Mere Coverage For Most Treasured Possessions

For the most part, collectibles insurance is sold based on agreed value, meaning that no appraisal is necessary for most collections. American Collector offers a basic policy for $75 a year covering up to $10,000 in value. There's a $100 deductible per occurrence, and the policy covers against accidental breakage, flooding, earthquake and other natural disasters.

Collectibles Insurance also uses agreed value, although the company asks collectors to schedule any items individually worth $5,000, or $25,000 for stamps.

"A lot of agents use this as an add-on to homeowners' coverage," Ms. Bergan said, warning that collectibles may not be covered as contents to their full value. The collectibles policy is a "very easy add-on" for agents, she said, adding that doing so has "prevented some E&O claims for our agents in the past."

In terms of dealing with clients, Ms. Fitzpatrick said collector coverage generally has a similar relationship as homeowners. Clients will purchase their policy and make payments, but typically will only inquire about their coverage when making changes that will dramatically affect the value of the insured property.

Collectibles Insurance also offers coverage to dealers, according to Ms. Fitzpatrick, who noted such policies tend to involve more activity as dealers buy and sell items and ship them to or from other collectors.

However, Ms. Fitzpatrick added that insuring collectibles offered a far more entertaining career than working in standard homeowners coverage, as she found clients who collect any number of objects–from dolls and toys, to old LP records.

"All of these people have a passion and love for what they do," which makes selling insurance coverage more exciting for the agency as well, she said. "They love to talk about what they collect."

In general, most collectible insurance policies are largely the same in terms of coverage and pricing, noted McKeel Hagerty, chief executive officer of Traverse City, Michigan-based Hagerty Insurance, which specializes in collector cars. "The difference is in the way it's delivered. The core product is insurance, but we really try to do an awful lot more."

To separate them from the competition, Hagerty began offering a program known as "Hagerty Plus," which offers specialty car roadside assistance with a guaranteed flatbed tow truck, as well as a quarterly magazine with stories and information for the collector and a foundation that supports educational programs such as trade schools.

It also provides a seven-day a week concierge service. "It was something that we just sort of threw out there," he said, but which has drawn a significant response. Clients can phone in with any number of questions about help with a vehicle value or finding a specific part, "and we'll do everything we can," he added.

The towing service is an important example of providing added benefits to clients, said Mr. Hagerty, noting that collector cars are six-times more likely to break down than everyday vehicles, and pointing out that Hagerty guarantees a flatbed because standard tow trucks are more likely to damage some older cars.

The flatbed is sent out as soon as possible once Hagerty is notified, and it's a service, according to Mr. Hagerty, that the company "pays a premium" for to ensure that a client's car is on the side of the road for as little time as possible. "When we call, it gets taken care of," he said.

Those insuring smaller-sized collectibles, as well as smaller collections, also can help clients ensure their collections are properly insured and protected. Just because their insurers don't require an appraisal, that doesn't mean collectors aren't interested in finding out what their collections are worth.

Ms. Fitzpatrick said Collectibles Insurance has received many calls from customers looking for an appraisal, which is more than insurance agents can provide. "We're an insurance agency, so we can't actually value their items" for them, she said.

However, Collectibles Insurance does provide clients seeking help determining values with a list of appraisal services they can contact for further assistance, along with a tip sheet designed to help collectors keep track of what they have and how much it might be worth, as well as how to protect their precious collections.

Collectors, she said, "run the gamut" in terms of cataloguing what they have–from those who keep up-to-date files on every item they own, using a spreadsheet, to those who have lost track of how much they have collected.

"The two biggest impediments" to insuring a collection, she said, "is when a customer says, 'I don't know what I have,' or 'I don't know what it's worth.'"

"Sometimes, they're just not sure," she added, "because they've been collecting for a really long time."

Even when collectors know what they have, Ms. Bergan noted that they also sometimes seek help ensuring they will be able to keep their collections safe and secure.

Ms. Bergan said American Collector has put together some tips and other information that would help collectors in advance of a major storm, or for those who reside in areas prone to hurricanes and other major weather events, focusing on loss prevention.

"No collector wants to face the loss," she said. "No collector wants a check as opposed to having their collection whole."

Those losses, she noted, may not even involve what most would view as the collectible itself. One client, she explained, had a collection of Madame Alexander dolls, but kept the boxes the dolls came from in their basement, which was flooded during a storm.

Ultimately Ms. Bergan said the policyholder was paid based on the value lost to the collection due to the missing or damaged boxes.

American Collectors will also offer advice, in a broad manner, for displaying collectibles–such as ensuring that a curio case is structurally sound.

"It's more on a general basis," she said, although she noted that some customers have sent in videos of their collections to show how they are displayed and ask how that might be improved.

However, she noted that given the attention that naturally comes with collecting, most customers are already in a risk mitigation frame of mind.

"The mentality of collectors is such that they're already taking these measures," she said "What makes them great clients is that they're already thinking about these things."

Another example in which having collectors as clients has been proven useful is in ensuring the collection being insured is what it is supposed to be.

While fraud and counterfeit items may be a concern, she noted that "collectors are pretty well educated. They know what manufacturer's stamp to look for."