Home Insurance and Collectibles: Is Your Collection Protected?

Do you collect items such as baseball cards, game cards, rare coins, or stamps? If you're in the habit of finding collectibles, you need to be aware that you may not be appropriately insured. Homeowners insurance generally comes with personal property insurance that is designed to cover fairly common items: furniture, decorations, and appliances. When it comes to collectibles, true value may be a little more vague.

Collectibles May Have a Sub-Limit

Most items in your home have a sub-limit. Even if you have $200,000 for coverage of your personal property, each individual item may only be covered up to $2,000. Additionally, a collection itself may have a limit -- your insurance policy may limit "collectibles" in general to $8,000. If your lost value goes over this amount, you're not going to get reimbursed for it -- even if you haven't met the actual cap to your coverage. The only way to avoid getting hit by this is to go over your policy very carefully and to increase coverage when needed.

It Can Be Hard to Value Collectibles

What is the true value of a niche collectible? It can vary tremendously based on the rarity and condition. Niche collectibles especially tend to fluctuate rapidly in value, sometimes from year to year or month to month. It's important to get an appraisal on any collectible and to update this appraisal from time to time, but you should also expect that an inquiry will be made into the replacement value of the collectible when you make a claim.

Some Types of Collectible Aren't Covered 

There are a lot of things that people can collect, including old cars. And if those old cars aren't driven (or even in driving condition), you might assume that they're simply personal property, but they aren't. Most homeowners insurance isn't going to cover any type of vehicle, so you would need additional auto insurance coverage. Other types of item, such as farming equipment and similar antiques, may also not be covered.

So how can you truly protect your collectibles? There actually are insurance policies designed specifically for a collection, and this is the type of insurance you should be looking for. An insurance broker may be able to help you find a policy that you can lump in with your current homeowners insurance, so that you can save money and get more well-rounded coverage. Otherwise you may find that your collectibles can't be replaced in the event of an unexpected disaster.