An article on art insurance
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Pirate   
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I'm not a high end art collector or anything, but that article makes you think about any type of insurance for collectibles.

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delekkerste   
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22 minutes ago, Pirate said:

I'm not a high end art collector or anything, but that article makes you think about any type of insurance for collectibles.

Yeah...given the pushback I got the one time I made a (small) claim with CIA (though, they did make good in the end), I have my doubts about how I would be treated if I had to make a more substantial claim, and would shudder to think what would happen in the event of a catastrophic/total loss.  If I lived in a house that could support the weight and space of a high-security safe, I'd probably opt for one of those and forego the sizable annual insurance premiums.  Maybe just insure the stuff hanging on the walls and that otherwise couldn't fit in the safe.

Edited by delekkerste

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ESeffinga   
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As someone with most of his collection on a wall somewhere in the house, and a great many pieces 4ft square and above, it's always an underlying concern. I've never needed to place a claim for art or any homeowner's need in general. Knock on wood. The premiums are indeed high, and may prove to have been money thrown down a black hole, should filing a claim ever truly happen. I've never been a gambler or a participant in games of serious chance, so this may be as close as I ever come to that.

 

 

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drdroom   
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Anybody have experience pro or con with Collect Insure, aka Collectibles Insurance Services?

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cstojano   
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10 hours ago, delekkerste said:

Yeah...given the pushback I got the one time I made a (small) claim with CIA (though, they did make good in the end), I have my doubts about how I would be treated if I had to make a more substantial claim, and would shudder to think what would happen in the event of a catastrophic/total loss.  If I lived in a house that could support the weight and space of a high-security safe, I'd probably opt for one of those and forego the sizable annual insurance premiums.  Maybe just insure the stuff hanging on the walls and that otherwise couldn't fit in the safe.

I can tell you how CIA will treat you. They will drop you. I made two claims within the same year, one for 900 one for 1400. Both were shipping losses. They were very nice and paid very quickly but didn't renew the policy. This is odd because they locked in a loss with me. I would still be using their service if I could. Now I cannot get collectibles insurance as the other company that people often recommend declined to consider it given the loss reports. Lesson learned.  I have been told CIA would likely write me a dealer policy (for more money) but I haven't checked back yet.  For non-collectibles like OA I use a special policy with USAA called valuable personal property. I list everything with an uploaded picture and the premium is very fair. I would only trigger in the event of a catastrophic loss, however. This is not for collectibles but for original art it works.

Edited by cstojano

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glendgold   
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12 hours ago, cstojano said:

I can tell you how CIA will treat you. They will drop you. I made two claims within the same year, one for 900 one for 1400. Both were shipping losses. They were very nice and paid very quickly but didn't renew the policy. This is odd because they locked in a loss with me. I would still be using their service if I could. Now I cannot get collectibles insurance as the other company that people often recommend declined to consider it given the loss reports. Lesson learned.  I have been told CIA would likely write me a dealer policy (for more money) but I haven't checked back yet.  For non-collectibles like OA I use a special policy with USAA called valuable personal property. I list everything with an uploaded picture and the premium is very fair. I would only trigger in the event of a catastrophic loss, however. This is not for collectibles but for original art it works.

I got a quote from USAA for comic art at one point (through one of their vendors, or whatever you call a company they have a deal with) and it came back at 4-5X other quotes.  I love those guys for auto and home insurance, but this isn't their forte. 

 

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vodou   
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21 hours ago, cstojano said:

I can tell you how CIA will treat you. They will drop you. I made two claims within the same year, one for 900 one for 1400. Both were shipping losses. They were very nice and paid very quickly but didn't renew the policy. This is odd because they locked in a loss with me. I would still be using their service if I could. Now I cannot get collectibles insurance as the other company that people often recommend declined to consider it given the loss reports. Lesson learned.  I have been told CIA would likely write me a dealer policy (for more money) but I haven't checked back yet.  For non-collectibles like OA I use a special policy with USAA called valuable personal property. I list everything with an uploaded picture and the premium is very fair. I would only trigger in the event of a catastrophic loss, however. This is not for collectibles but for original art it works.

That's the problem with insurance, or rather insurance companies: they only play to win and take their ball and go home if they don't. Best thing in the world would be if everybody put in two shipping claims and got dropped. Then they would have no customers and either close up or get real.

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PhilipB2k17   
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I'm looking into a CHUBB collectibles policy. They let you list an itemized schedule of agreed upon value for each piece in your collection, and they will pay you that amount if there is  loss. They also have coverage that allows 150% of agreed upon value, to take appreciation of the collection into consideration. You also have the option of doing a blanket appraised value coverage for your collection as a whole.

I suspect its pricey, but this is top notch coverage.

 

Edited by PhilipB2k17

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delekkerste   
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19 minutes ago, PhilipB2k17 said:

I'm looking into a CHUBB collectibles policy. They let you list an itemized schedule of agreed upon value for each piece in your collection, and they will pay you that amount if there is  loss. They also have coverage that allows 150% of agreed upon value, to take appreciation of the collection into consideration. You also have the option of doing a blanket appraised value coverage for your collection as a whole.

I suspect its pricey, but this is top notch coverage.

 

Please let us know what you find out.  I've heard nothing but great things about Chubb, and even started a process a few years ago to getting a quote, but, it was cumbersome and after CIA made good on my one small claim, I decided not to proceed with the Chubb policy knowing it would likely be much more expensive.  

That said, I'd like to quantify how much so I can make an informed decision. 

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vodou   
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1 minute ago, delekkerste said:

Please let us know what you find out.  I've heard nothing but great things about Chubb, and even started a process a few years ago to getting a quote, but, it was cumbersome and after CIA made good on my one small claim, I decided not to proceed with the Chubb policy knowing it would likely be much more expensive.  

That said, I'd like to quantify how much so I can make an informed decision. 

I'm interested in hearing more too. But I'm also interested in hearing from somebody that's been with them a few years (at least) and how they feel the overall value is: coverage:cost:claim payment. "Cost" would include the time/expense of any appraisal hoops one has to jump through.

Eric's article at the beginning gets to the crux of the matter: insurers are happy to do the easy math upfront (writing policy), because it favors them. That math is x% of value covered. It favors them because by and large everybody over-insures and under-claims (if at all). Big money gap there between profit and loss. The insurer just sweeps that (profit) money up from all the insureds. But when the occasional claim (loss) comes in, all of a sudden it's a national emergency at the insurer...because it's not easy and it's not profitable, they are no longer favored. The big money gap has narrowed...slightly ;) Easy claim math (for all parties) would be payout exactly what you're covered for, quickly too, and no bs unless fraud can be proven. I'm waiting for an insurer that offers that. Ha!

The industry's first pushback to that is that the customer-provided value (or even appraised value) is not tethered to reality. That's a tough nut on unique objects, like art (not like CGC 9.8 New Mutants 98!) Comps? Cost basis? What reality? It's a grey area that insurers exploit to push the value down, but only at claim time. Otherwise your value is great for pricing purposes ;) Why not let "your value" prevail beginning (premium) to end (claim payout)? Easy: You might mark your Jemm, Son of Saturn cover by Colan at $25m, instead of $2500 (and that's being generous too).  But...you'd be paying the premiums also, right? And if you claimed, you'd be under that rather intense fraud scrutiny, especially if you had ever made a similar nature claim at any time. So insurers...man up and either take the risk (that's business!) or don't and fold. Babies.

Back to us collectors and over-insuring...there is such a thing, at very low premium, for catastrophic total loss coverage. But it's cheap because your entire collection doesn't typically disappear in a finger snap (for whatever reason). Right? So instead of doing that and hoping it all works out at payout time (right!), take reasonable precautions/care for your collection and insure an honest % of value. Best day at Heritage your collection would hammer for $1m? Cool. Insure for $50k (5%) or even $150k (15%) with the thinking that you'd never let more than 5% to 15% of anything happen to the whole thing. Premiums lower and avoid all those silly red flags that big numbers throw up everywhere anyway. Another advantage is you're not constantly jiggering the whole value up and down at each new (sorta) comp point or as things are added or taken away from your collection. You don't really need to move the policy around with those changes, it's your % insured that's moving around, giving you time to re-assess on something more like a renewal basis.

All that...and I'm still looking for my own solution anyway! Maybe it's Chubb. Maybe not. Hoping to find.

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ESeffinga   
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Count me in as interested to what you find out re: Chubb as well.
The thing I don't like with my current insurance arrangement is it is a rider through the same company that my homeowners is through (SF, if you were wondering), and they've been easy going with me. But I'm not sure I want all my eggs in that same basket, if you know what I mean. Should something happen (a plane falls on my house), I'm inxreasingly wary of my chances of recouping even the majority of value. Will they pay out and then boot me as a customer? Probably. But then where do I stand trying to get insurance elsewhere?

 

Of course if a plane falls on my house, I'll probably have bigger fish to fry in the short term. Heh.

 

 

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PhilipB2k17   
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3 hours ago, vodou said:

I'm interested in hearing more too. But I'm also interested in hearing from somebody that's been with them a few years (at least) and how they feel the overall value is: coverage:cost:claim payment. "Cost" would include the time/expense of any appraisal hoops one has to jump through.

Eric's article at the beginning gets to the crux of the matter: insurers are happy to do the easy math upfront (writing policy), because it favors them. That math is x% of value covered. It favors them because by and large everybody over-insures and under-claims (if at all). Big money gap there between profit and loss. The insurer just sweeps that (profit) money up from all the insureds. But when the occasional claim (loss) comes in, all of a sudden it's a national emergency at the insurer...because it's not easy and it's not profitable, they are no longer favored. The big money gap has narrowed...slightly ;) Easy claim math (for all parties) would be payout exactly what you're covered for, quickly too, and no bs unless fraud can be proven. I'm waiting for an insurer that offers that. Ha!

The industry's first pushback to that is that the customer-provided value (or even appraised value) is not tethered to reality. That's a tough nut on unique objects, like art (not like CGC 9.8 New Mutants 98!) Comps? Cost basis? What reality? It's a grey area that insurers exploit to push the value down, but only at claim time. Otherwise your value is great for pricing purposes ;) Why not let "your value" prevail beginning (premium) to end (claim payout)? Easy: You might mark your Jemm, Son of Saturn cover by Colan at $25m, instead of $2500 (and that's being generous too).  But...you'd be paying the premiums also, right? And if you claimed, you'd be under that rather intense fraud scrutiny, especially if you had ever made a similar nature claim at any time. So insurers...man up and either take the risk (that's business!) or don't and fold. Babies.

Back to us collectors and over-insuring...there is such a thing, at very low premium, for catastrophic total loss coverage. But it's cheap because your entire collection doesn't typically disappear in a finger snap (for whatever reason). Right? So instead of doing that and hoping it all works out at payout time (right!), take reasonable precautions/care for your collection and insure an honest % of value. Best day at Heritage your collection would hammer for $1m? Cool. Insure for $50k (5%) or even $150k (15%) with the thinking that you'd never let more than 5% to 15% of anything happen to the whole thing. Premiums lower and avoid all those silly red flags that big numbers throw up everywhere anyway. Another advantage is you're not constantly jiggering the whole value up and down at each new (sorta) comp point or as things are added or taken away from your collection. You don't really need to move the policy around with those changes, it's your % insured that's moving around, giving you time to re-assess on something more like a renewal basis.

All that...and I'm still looking for my own solution anyway! Maybe it's Chubb. Maybe not. Hoping to find.

If you have an OA collection that could reasonably be expected to hammer out at auction for $1M, I suspect you can likely afford a CHUBB policy. Most homeowbers policy riders max out. My collection reasonably exceeds the max out (which isn't that much, really), so I need more coverage.

Question is one of cost. How much are you willing to shell out in premiums, to insure against the risk? That's why you get quotes. I high value collection will be pretty costly to insure unless you are also well-off. A more modest one might be not valuable enough for the premiums to be worth it. It's probably a Goldilocks collection that hits the sweet spot for most people.

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vodou   
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1 hour ago, PhilipB2k17 said:

Question is one of cost. How much are you willing to shell out in premiums, to insure against the risk? That's why you get quotes.

Cost is the least important factor, the most important is denials and adjustments against claims. Who cares if they charge you "only" $1 per $1000 but deny all claims? While I've exaggerated a bit there, the sad truth is that is almost reality, but I'm not sure the more you pay out gets you any better claims reliability either. And that's all collectors should care about, after all that's the risk you're trying to offload (at a price) on somebody else - the infrequent "what ifs".

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cstojano   
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On 9/14/2017 at 8:24 AM, glendgold said:

I got a quote from USAA for comic art at one point (through one of their vendors, or whatever you call a company they have a deal with) and it came back at 4-5X other quotes.  I love those guys for auto and home insurance, but this isn't their forte. 

 

So I just looked at mine and it is 59 dollars a year for coverage of 56k worth of items. I think this was considerably cheaper than even CIA (cannot remember my rates). I suspect you have much more to insure than I and there may be a non-linear relationship between value and price.  This is for Valuable Personal Property. I know USAA offers collectibles insurance but I think that just links to a third party like Minico. I know people like CIA because you don't have to itemize items < 5k, but I like the itemization as it forces me to get organized. Now if I only I had kept better records/receipts at purchase...

Edited by cstojano

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vodou   
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2 hours ago, cstojano said:

So I just looked at mine and it is 59 dollars a year for coverage of 56k worth of items. I think this was considerably cheaper than even CIA (cannot remember my rates). I suspect you have much more to insure than I and there may be a non-linear relationship between value and price.  This is for Valuable Personal Property. I know USAA offers collectibles insurance but I think that just links to a third party like Minico. I know people like CIA because you don't have to itemize items < 5k, but I like the itemization as it forces me to get organized. Now if I only I had kept better records/receipts at purchase...

That's so low (1/10th of 1%) that's I have to wonder...do you even have a 'real' policy? I suspect not. Most breakout policies (so not riders to existing other lines) are 2-3% of value. Is 56k cost basis, present FMV (your guess), appraisal (when?), or..?? Just wondering. I'm not military, ex or related, so USAA isn't an option for me anyway.

If your house burned down right now - what's your confidence that USAA would cut you a check (even if it took a month or two for the paperwork to go through) for that amount, separate from any other loss you have on your house and regular belongings? If it's not really high, that premium is part of the problem, but then really the whole thing is a problem (isn't it?) If it doesn't really cover that total loss...what does it cover that warrants naming it '56k'?

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glendgold   
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4 hours ago, cstojano said:

So I just looked at mine and it is 59 dollars a year for coverage of 56k worth of items. I think this was considerably cheaper than even CIA (cannot remember my rates). I suspect you have much more to insure than I and there may be a non-linear relationship between value and price.  This is for Valuable Personal Property. I know USAA offers collectibles insurance but I think that just links to a third party like Minico. I know people like CIA because you don't have to itemize items < 5k, but I like the itemization as it forces me to get organized. Now if I only I had kept better records/receipts at purchase...

As I recall, there might be some issue with renting vs owning.  As in: if you have homeowner's insurance it might be cheaper than if you're looking to add a rider to your renter's policy.  Or vice versa. 

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cstojano   
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6 hours ago, vodou said:

That's so low (1/10th of 1%) that's I have to wonder...do you even have a 'real' policy? I suspect not. Most breakout policies (so not riders to existing other lines) are 2-3% of value. Is 56k cost basis, present FMV (your guess), appraisal (when?), or..?? Just wondering. I'm not military, ex or related, so USAA isn't an option for me anyway.

If your house burned down right now - what's your confidence that USAA would cut you a check (even if it took a month or two for the paperwork to go through) for that amount, separate from any other loss you have on your house and regular belongings? If it's not really high, that premium is part of the problem, but then really the whole thing is a problem (isn't it?) If it doesn't really cover that total loss...what does it cover that warrants naming it '56k'?

That value is a mix of cost basis and FMV, given my penchant for esoterica I suspect my cost basis is actually higher than FMV on some items (that's a whole other matter I suppose). I have pretty high confidence they would pay as I do all my banking, auto, homeowners with them. But now I am concerned. Is there a specific phrase I should use? Because I don't think "some guy online said you are full of s--t" is going to be productive ;)

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vodou   
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1 hour ago, cstojano said:

That value is a mix of cost basis and FMV, given my penchant for esoterica I suspect my cost basis is actually higher than FMV on some items (that's a whole other matter I suppose). I have pretty high confidence they would pay as I do all my banking, auto, homeowners with them. But now I am concerned. Is there a specific phrase I should use? Because I don't think "some guy online said you are full of s--t" is going to be productive ;)

It's not so much that I think they're fulla but more like there is a coverage misunderstanding here, you think it's art (guessing here but probably) bundled in with the rest of your 'stuff' and they think it's just 'stuff'. Read the fine print, is there an exclusions section? Even if there isn't, most likely your art is still excluded. You will lose when push comes to shove (always with insurers, always).

You can come up with your own approach but the basic question is: why is your premium so much lower than the rest of the industry on 'art'? Now that's when they may tell you they aren't insuring art but 'stuff' (personal belongings), which means replacement cost - on their terms (values), so your 56k is probably out the window at that point. It would be zero actually. Unless you've told them this insurance is covering $56k (my value) of art and they've assured you they understand, their understanding will be: couches, tvs, cell phone, t-shirts, and the like. All easily replaced at current retail in any city around the world. Not so with art.

 

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cstojano   
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4 hours ago, vodou said:

It's not so much that I think they're fulla but more like there is a coverage misunderstanding here, you think it's art (guessing here but probably) bundled in with the rest of your 'stuff' and they think it's just 'stuff'. Read the fine print, is there an exclusions section? Even if there isn't, most likely your art is still excluded. You will lose when push comes to shove (always with insurers, always).

You can come up with your own approach but the basic question is: why is your premium so much lower than the rest of the industry on 'art'? Now that's when they may tell you they aren't insuring art but 'stuff' (personal belongings), which means replacement cost - on their terms (values), so your 56k is probably out the window at that point. It would be zero actually. Unless you've told them this insurance is covering $56k (my value) of art and they've assured you they understand, their understanding will be: couches, tvs, cell phone, t-shirts, and the like. All easily replaced at current retail in any city around the world. Not so with art.

 

Its a total different policy from homeowners, which covers the stuff. Its for firearms, coins, stamps, guns, jewelry, camera, furs, silverware, instruments and a category they call "fine art." But fine art here means " Artwork, antique furniture, oriental rugs and antique musical instruments or guns that are used solely for display. " When I called they said no to collectibles, no action figures, comics, and things like that. But original art, hand drawn pieces would seem to easily qualify as artwork. I know I asked this when I called initially but I will call again.

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