Collectors insurance

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Posted By: Jeff Obermeyer

Dan Mathewson posted in a previous thread about collectors insurance that he found online. Dan was nice enough to forward his sample policy to me for review, and I thought I'd let everyone know a little about the coverages provided.

DISCLAIMER: I am in no way affiliated with any company involved in this insurance. Also, I am not a lawyer, and cannot give legal advice. Finally, it is important to note that often two insurance companies will interpret identical policy language in two different ways. I am basing my analysis on my 3 years experience as a property claims adjuster for another carrier...

The coverage provided is indeed "all risk". This means that your items are insured for any and all perils, except those specifically included in the policy. There are a number of exclusions listed in the policy, with the first being the most important in my opinion. It is the "wear and tear" exclusion, which states that losses caused by fading, creasing, scratching, wear, tear, dampness, insects, etc. will not be covered. Also not covered is any damage that happens to your items while they are being handled - so if you drop an item or spill something on it or damage it in some other way, it's not covered.

Most of the other exclusions deal with damage caused while items are in transit, although my favorite exclusion is for damage caused by "any weapon of war employing atomic fission...".

Anther important note is that the policy will not pay out more than $10,000 on any one item.

One other important clause in the conditions section is that which deals with "other insurance". This policy is secondary to any other policy which may cover your collectibles. As an example, say that your homeowners policy provides $1,000 in coverage for trading cards. If your loss (to trading cards) is less than $1,000, then you would have to file a claim under your homeowners/renters insurance. If your loss is $5,000, then the collectors policy will only kick in once you have filed a claim against your homeowners policy and that policy has paid out it's limit. In this situation then your collectors policy would only cover the $4,000 of the loss not covered under the homeowners policy. In effect you have to file two claims for your items.

The policy is underwritten by Lloyd's of London. They use independent adjusters to handle their claims, and this can often slow the payment process considerably.

All items valued at over $2,500 have to be individually described/scheduled and documented. The deductible for the policy is $250, the maximum payable for one loss is $50,000. The value of your items is determined as: "Value means the replacement cost of the item or items; or if not replaceable, then the purchase price, or an appraised valuation by a competant authority."

There are some other mildly interesting tidbits, but I don't want to bore all of you with the details and fine print.

The policy is available through Association Insurance Administrators in Davidson, NC. 1-800-618-1787.

Jeff