The Insider’s Guide to Shopping for Wine Insurance
Not every wine collector needs to separately insure his or her wine collection.
But if you’re thinking of taking the plunge, here’s the insider’s guide to shopping for wine insurance.
Check Your Current Insurance Policies to See if they Cover Wine
The extent that your existing general homeowners, renters, or condominium insurance covers the loss of wine affects the amount of additional specific wine insurance you’d be in the market for.
For example, higher-end insurers, such as Chubb and AIG, often offer more extensive general coverage than more basic carriers, Kenneth Sidlowski, Private Client Group Practice Leader for the Chicago-based insurance agency The Horton Group tells Wine With Our Family. Verify the amount of supplemental insurance you really need.
Do Your Homework
If you’re shopping for wine insurance, become familiar with the insurance options. For instance, see if you prefer blanket insurance or scheduling/itemization, says Sidlowski.
Use a Knowledgeable Advisor/Broker
Experts suggest that it’s a good idea to get help from an insurance advisor/broker when shopping for wine insurance.
“Have a good advisor to bounce things off them,” says Sidlowski.
You can reach out to your existing homeowner/renter/condo unit insurance carrier, but be forewarned that your local agent may not be well versed in this area.
“They may be a little out of their league,” he warns.
An outside advisor may also more objectively help you determine whether you’re better off adding a policy under your existing insurance carrier or purchasing stand-alone coverage, and if so, how to go about it.
If you don’t have an advisor or broker, ask your accountant or estate attorney for recommendations, since those types of professionals often know of financial advisors and wealth managers who provide full financial risk review and can point you in the right direction.
Make Sure the Insurance You’re Considering is Adequate
When you’re shopping for wine insurance, don’t skimp. The policy should at the very least cover the three big disasters that can hurt a wine collection: fire, water, and temperature, says Sidlowski. The policy should also address replacement costs, damages for issues like theft or breakage, and the coverage of newly-purchased bottles.
Have a Good Inventory System
Having a complete and up-to-date record of your wine collection is important to determining its value, and thus the cost of the insurance as well as the actual coverage. Most insurers will require a full written inventory of the wine collection, specifically listing the bottles and their individual values, Justin Tomczak, spokesperson for State Farm Insurance Company tells us.
“Additionally, State Farm will ask for an updated inventory annually to determine if the collection has changed over time and if the coverage amount needs to be updated,” he says.
An inventory system also improves the insurability of your wine. It indicates your approach to the collection and that you know what you’re doing. “Any serious hobbyist takes a serious approach to their collection,” says Sidlowski.
Note that your record-keeping need not be fancy. Some collectors use simple programs such as Excel to catalogue and track their collections. Others use online wine valuation tools like Wine Owners or Cellar Tracker.
Don’t Rely Only on Insurance
A wine collector needs more than insurance to protect the collection. After all, it’s always preferable to prevent a disaster in the first place. For example, wine collections should be stored using wine bottle racks or other secured/encased methods, says Tomczak. Some insurers, such as State Farm, don’t require temperature/ humidity-controlled storage units in order to obtain a separate wine insurance policy. However, you may want a climate control system anyway, as well as an alarm system, to help safeguard your wine, says Sidlowski.
Also use common sense; if you have a leaky basement, make sure your wine collection is off the floor.
We hope this insider’s guide to shopping for wine insurance helps you buy the right supplemental insurance to protect your wine collection. Please share with us your own experiences with wine collection insurance.
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