Stamps and coin collections are covered on a named perils basis, but they are susceptible to many unnamed perils that are more likely to occur due to the nature of the items. They are also limited to $2,000 in the homeowners HO 00 03. This is where the inland marine forms come in. They provide broader coverage and scheduled limits of coverage. The ISO form PM 00 12 Stamp and Coin Collections Form is specifically developed to provide coverage for stamp and coin collections.

Topics covered:

Introduction

Property covered

Property not covered

Perils

Deductible, option, safe or vault credit

Introduction

The form allows the insured to schedule described stamp and coin collections for specified amounts, as well as a blanket collection of stamps or rare and current coins. A blanket amount may be listed for stamps and coins, and stamps and coins can also be individually scheduled on the form. An insured may have a few very valuable coins that should be scheduled individually, but also have a coin collection that fits better under blanket coverage.

Important in this coverage is an accurate, detailed appraisal of each item. Condition is critically important in the value of coins and stamps; mint quality stamps or coins are much more valuable than those that are worn by use or age. Similar to jewelry, appraisals should be updated regularly as prices change over time. It is important to advise the insured to have the appraisals regularly updated, roughly every five years unless the carrier has specific appraisal update requirements.

Property Covered

A. Property Covered

1. We cover scheduled and unscheduled postage stamp and rare or current coin collections while anywhere in the world only if:

a. Owned by or in the custody or control of an "insured"; and
b. An amount of insurance and premium is shown for that property in the Schedule above.
The amount of insurance shown for such property is limited by Paragraph D.1. Loss Settlement in Common Policy Provisions Form PM 00 01.

2. Postage stamp collections include the following:
a. Due, envelope, official, revenue, match and medical stamps;
b. Covers, locals, reprints, essays, proofs and other philatelic property; or
c. Books, pages and mountings of items in 2.a. and b. above.

3. Rare and current coin collections include the following:

a. Medals, paper money and bank notes;
b. Tokens of money and other numismatic property; or
c. Coin albums, containers, frames, cards and display cabinets used with the collection.

Analysis

Like most personal property coverages, this form covers scheduled property while it is anywhere in the world. However, the property must be both owned by or in the custody of the insured, and must be shown on the schedule with an amount of coverage and premium. So, the insured can travel with his collections and the coverage follows. If the property is in a storage facility, the question then becomes is the property is the custody of the insured? In many storage facilities, the owner of the property is the only person with a key to the unit – that would make the property in the custody of the insured, even if it isn't in his house or immediate possession, he's still the only person with access to it. Therefore, the endorsement should apply to property in storage.

Note that the coverage is for collections and not individual stamps or coins. Individual stamps or coins are too easily lost or damaged. The property that is covered is only what is listed on the schedule on a blanket or scheduled basis unless it fits the newly acquired property provisions.

The loss settlement conditions that apply appear in the Common Policy Provisions, PM 00 01, section D.1. The scheduled form has no settlement provisions—it is designed to identify specific property and what the agreed amounts are, and be paired with the common provisions form.

Section D.1 of the Common Policy Provisions form states that the value scheduled of items not marked with a double asterisk are not an agreed upon amount, but that the value will be determined at the time of loss.

In event of a loss, no more than the lesser of four amounts will be paid: the actual cash value of the article at the time of loss, the amount for which the article could be reasonably repaired to its condition immediately before the loss, the amount for which the article could be reasonably replaced with one substantially similar to it, or the amount of the insurance. This allows the carrier to return the insured to his pre-loss condition at the lowest cost to the carrier, while still providing proper indemnity. It is important to make this clear to the insured; just because a collection is scheduled with an assigned dollar value does not mean that is what the insured will get in the event a collection or part of a collection is damaged or lost. Carriers may be able to replace stamps and coins at less than retail cost, and if an exact duplicate or substantially identical article can be obtained at such a price, the carrier will do so.

Unscheduled property covered on a blanket basis is limited to 10% of the coverage amount of the scheduled collections. This limit may be increased if the limit is impractical due to the nature of the items being insured. The most that is paid for any one loss is $1,000 for coin collections and $250 for any one stamp, coin, article, pair, strip, block, series, sheet, cover, frame, or card.

The policy specifies what is included in stamp and coin collections: stamp collections include due, envelope, official, revenue, match, and medical stamps as well as covers, locals, reprints, essays, proofs, books, pages, and mountings of items.

Revenue, match, and medicine stamps are stamps to show that taxes were paid on the products they were affixed to. During the civil war, taxed items included matches, patent medicines, perfumes, playing cards, and canned fruit. The taxes were to support the costs of the war. Revenue stamps include alcohol and tobacco tax stamps. This is also what the policy considers eligible property.

Rare and current coin collections include medals, paper money, bank notes, tokens of money and other numismatic property, coin albums, containers, frames, cards, and cabinets used with the collection. Again, these are the eligible property according to the manual.

Property Not Covered

B. Property Not Covered
We do not cover:

1.Postage stamps or rare and current coins:

a. Not an actual part of a stamp or coin collection;
b. Being shipped by mail other than registered mail; or
c. In the custody of transportation companies; and

2. Contraband or property in the course of illegal transportation or trade.

Analysis

Stamps and coins not part of a collection are incredibly easy to lose, so they are not covered. A loose coin could get mixed in with normal change, and loose stamps are extremely easy to damage or lose.

Because stamps and coins are often sold between collectors, how the stamps and coins are transported is a large concern. Coverage is provided only if the property is shipped via registered mail; any other type of mailing is not covered. Likewise, there is no coverage for collections in the custody of a transportation company. Contraband is excluded since it is illegal property.

Perils

1. Loss caused by or resulting from work done to or handling the property; or
2. Loss caused by:

a. Wear and tear, deterioration, inherent vice or any quality in property that causes it to damage or destroy itself;
b. Insects or vermin;
c. Fading, creasing, denting, scratching, tearing, or thinning;
d. Transfer of colors, inherent defect, dampness, extremes of temperature or depreciation; and
e. Disappearance of individual stamps, coins or other property unless the item is:

(1) Described and scheduled with a specific amount of insurance; or
(2) Mounted in a volume and the page it is attached to is also lost.

Analysis

This is an open perils form, so only what is specifically excluded is not covered. Damage caused by work done to or in handling the property is excluded. Coins and particularly stamps are fragile; the insured could tear a stamp while mounting it, thus damaging it and ruining the value. This type of loss is not covered. Also excluded is wear and tear, inherent vice or any property that causes the property to damage or destroy itself, or insects or vermin. Stamps are more apt to wear over time, due to the nature of the material and that glues are used on them when created.

Insects and vermin can damage both, from eating away at the stamp material to secreting fluids that damage the coin finish. Fading, scratching, denting, creasing, tearing, thinning, transfer of colors, inherent defect, dampness, extremes of temperature, or depreciation are all excluded. These are perils that are quite common among stamps and coins and are not meant to be covered by the form. Any of these perils can significantly affect the value of coins or stamps, and many can be caused by neglect of the insured.

As mentioned earlier, coverage does not apply to individual stamps or coins unless they are described and scheduled on the form or are mounted in a volume, and the page the item is attached to is lost as well. Individual stamps and coins are too easily lost or damaged.

Deductible, Option, Safe or Vault Credit

Safe Or Vault Credit
(Applies Only To Scheduled Property)
You agree to keep at least 75% (by value) of the scheduled property in a fireproof safe or vault with a combination lock when not in use or on exhibition.

Analysis

The form has a standard deductible clause. A loss is not paid until it is over the amount of the deductible listed on the policy. Available deductibles are $100, $250, and $500.

There is a premium credit available if the insured agrees to keep 75 percent of the collection by value in a safe or vault. The safe or vault must have a combination lock and be fireproof. The fact that the credit option for keeping property in a vault has been selected must be indicated on the declarations page.

Includes copyrighted material of Insurance Services Office, Inc., with its permission.