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Collectibles insurance: A way to protect your prized possessions

Whether you've just inherited your grandmother's china collection or have spent the past decade gathering an impressive assortment of autographed golf balls, you may want to think seriously about protecting your valuables in case someone swipes them and they become someone else's prized possessions.

Collectibles insurance offers coverage for possessions that hold significant value in your eyes, whether that's in a financial or emotional sense.Policies can range from a few thousand dollars to millions of dollars. Regardless of the price tag, these items share one thing in common: They are priceless to you.

Want to make sure you have the right coverage for collectibles? Finding the best fit for your situation depends on the items you want insured, the preferences you have when it comes to insurance and the costs involved.

homeowners insurance collectible

Here are five guidelines to help you find the best insurance policy for your treasures:

1. Check your homeowner's policy.

While it's easy to assume that collectibles are covered under your homeowner's insurance policy, they're often not.In many instances, "your homeowner's insurance policy is designed to cover regular personal property and is not nearly enough to protect your collection," says Annemarie Fitzpatrick, director of Collectibles Insurance Services LLC in Hunt Valley, Md.

To find out whether your collection is covered under your home insurance, talk to your insurance agent, Fitzpatrick says. Ask questions regarding the current coverage provided and what, if any, limitations are involved.Find out how the claim will be adjusted in the case of a loss -- whether it will be through actual cash value or through replacement value as a collectible.

"Some things, such as jewelry, have limitations in a homeowner's policy," says Anea Kamahele, a State Farm agent in Sonoma, Calif. If the policy on jewelry won't pay out more than $5,000 and your necklace collection easily surpasses that value, you'll want to look into other options.

2. Consider additional coverage

If your collection is not covered under your homeowner's insurance, or you're not satisfied with the coverage offered, other options are available. Depending on the size of your collection, you might be able to take out a rider, which acts as a mini-insurance policy on top of your existing homeowner's insurance.

If that's still not enough coverage, consider a company such as Collectible Insurance Services that specializes in insuring collectibles.

3. Determine the value

When Gary Kreissman, founder of sales leads consulting company Group PRM, wanted to find out the value of a baseball that slugger Babe Ruth had signed for his grandfather, his homeowner's insurance provider did not have anyone on staff who could appraise the item. Kreissman eventually found an appraiser who estimated the baseball’s value at $8,000. The item now falls under a rider policy through Kreissman's homeowner's insurance provider, and the stated value rises along with inflation.

Getting an item appraised often is necessary if you want to include it in a policy such as a personal articles policy, Kamahele says. A personal articles policy is similar to a rider -- it adds extra coverage to belongings not covered by your homeowner’s policy. An appraisal might cost $75 to $100, she says. Still, Kamahele says, "that doesn't guarantee that a few years from now the appraisal will still be accurate."

homeowners insurance collectibles

To obtain a policy with Kitzpatrick's agency, Collectibles Insurance, you must fill out an application with details about yourself, your home, your recordkeeping, and your collection and how it is stored. You then estimate the value of the collection and list any items worth $5,000 or more.

4. Know your preferences

Several years ago, Judy Novella of Southbury, Conn., took out a separate policy for her collection of about 250 crystal figurines. In her case, the benefits of collectibles insurance outweighed the costs, she says.

"The policy covers breakage, so if there is a minor incident, like a break when cleaning, or a major incident, like the dog knocks over the curio cabinet, you're covered," she says. Under her policy, coverage is for replacement value.

In many cases, a separate policy can add coverage not provided under a homeowner's insurance policy. "Our policies cover fire, flood, burglary and theft, and natural disasters," says Fitzpatrick, the collectibles insurer. Policies also provide coverage while items are away from home, so if you take your doll collection to an exhibition, the dolls will be covered during the event.

Policies even offer coverage for items being shipped. If you send in a gun to have a new scope put on it, for instance, the gun will be covered during the shipping process.

5. Weigh the costs

Premiums for a collector’s policy will vary based on the type of collection, the amount of insurance, your location and the method of storage of your items, Fitzpatrick says. Premiums may be adjusted depending on protective devices where the collection is kept, such as an alarm or a safe.

Depending on where you live and the type of coverage you need, premiums for a $100,000 collection could total less than $500 a year.An automatic increase option of 1 percent a month is available to account for appreciation of a collection and addition of items.

You may find reductions in cost for items stored in secured places. "If you keep your jewelry in a bank safety deposit, the premiums go down," says Kamahele, the State Farm agent. "But you're still covered if you take it out for a period of time and go to, say, the Oscars."

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