The number of homeowners insurance companies providing coverage for art, wine, coins and other collectibles has started to increase as more and more consumers are realizing the value of these items. The increased demand for such coverage has been largely buoyed by investors buying such items and demanding coverage for their purchases.
According to some insurance clients who have transferred to other insurance firms for collectible coverage, these items are part of a person’s assets, hence the need to provide insurance protection to prepare for instances of loss, damage or theft. Currently, most mass market home insurance providers have low policy limits and do not provide cover for items that are priced over $200,000. Most of them also do not offer protection for value loss or price depreciation.
However, factors such as increased pricing for collectible items, market volatility and the return of bonuses in Wall Street have caused investors to look for other ways to diversify and expand their portfolios and invest in hard assets that have a big chance of appreciating. These means that more of them are demanding services that will protect these other assets.
One example of homeowners insurance company that has realized the importance of catering to these clients is Chartis U.S. Along with other firms outside the so-called mass market segment; Chartis has been providing private clients with coverage for their collectibles such as wine, coins, artwork and jewelry. According to these companies, investors are attracted by these items because their values do not rely on the movement of Standard and Poor’s Index.
As evidence of the growing value of these collectibles, auction house Sotheby’s reported selling almost $2 million worth of artwork at its May 5, 2010 auction. Christie’s International, another top auction house, reported that sales of jewelry rose by more than 100% in the second quarter of the current year, while wine sales rose by 25% in the same quarter when compared with previous year’s records.
Aside from Chartis, Fireman’s Fund and Chubb are two other homeowners insurance firms that offer specialized coverage for collectibles that range from art pieces to autographs to coins. The price of coverage, according to clients, varies depending on several factors that may include collection size and the place where the collector lives.
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