Insuring a collection. Why you'll need a specialist insurer

Quality High Net Worth Property Insurance for Distinctive Homes

This article has been reproduced with the kind permission of Michael Hughes, the author and copyright owner, and it appeared in the April 2006 edition of The Armourer Magazine. We are pleased to add that Michael found exactly the insurance cover he desired, at a competitive premium, via Dovetail Insurance Services Ltd.

Is your collection under insured?

When it comes to insurance, I would suspect most collectors will bury their heads in the sand and hope that their standard home contents cover will be adequate. I was one of these people until the Financial Times wanted to write a piece on my collection. Although the national coverage would be good, it can also draw unwanted attention. I therefore got my parents to check their insurance. Needless to say they had not updated it since they moved into their house about twenty years ago and the cover only allowed for £7000 of valuables. I quickly started to panic, especially as the article would soon be out. There was only one thing for it. I phoned up my bank and took the entire lot to their bank vault. They were not sure about insurance, but I decided it was safer there uninsured than in my house uninsured.

You would think that once secure in a bank, insurers would be keen to give me a lower premium. I phoned a few of the companies that advertise on TV. You would have thought I had landed from Mars, trying to explain that I had a collection of Militaria and that it was kept in a bank vault. I went through a ten minute conversation explaining what I needed and thought I was signing up for a policy when the man read it back and it transpired that the collection would only be insured within my home. When I tried to explain, yet again, that it was in a bank vault, he went away to check and said it was up to the bank to insure.

I visited the bank again and explained this to the customer service assistant and they said they could not insure the items. I therefore phoned the insurer again and checked over the cover in more detail. It is just as well I did, as the 'valuables cover' which I thought contained my collection, actually included CD's and other smaller items. It was obvious that I was under insured and this company just had standard policies
that did not meet my needs.

I therefore decided to change tact. I searched on the Internet for specialist insurance brokers that deal with antiques. I thought they might have a better understanding of what I wanted. Sure enough they did.

There were a few problems ringing around, because my collection was not big enough, some require at least £100000 of cover, but this could include buildings, contents and the collection. As I only wanted contents insurance, it was more tricky but I did find one insurance broker (Dovetail Insurance Services Ltd) who managed to get me a policy which suited and would cover the items held in the bank, or at my home or that of my parents.

I know many collectors might not want to be parted from their collection, and it is a personal choice, it was hard for me, but the bank is the safest place for it. I can still go and see it whenever the bank is opened and at least I don't need to worry about it when I am away on holiday. That is not to say insurers won't insure collections held at the home but they might stipulate that you install a safe or other security features.

One important aspect of my new insurance policy is that there is a limit stating that no individual item should be worth more than £1000, unless separately listed and valued, but as I do not have any items that are this much it was not a problem. A similar limit is usually applicable to all insurance policies.

So say for example somebody has just bought a Knight's Cross for £4000, then they really should consult their insurance company, but I would certainly brace yourself for some explaining on your side and lack of understanding on their side.

The story is all too familiar to Geoff Moss from Dovetail Insurance who says:

"It is important not to try to fit a square peg into a round hole, which is what any collection is to the average Home Insurance policy. I am frequently contacted by collectors, of all kinds, to find an insurer that understands their unique circumstances and will provide cover accordingly. Most Home Insurance policies provide good cover for the average home owner. However, collectors are, by definition, not average. Their possessions are unique to them, perhaps even fluid as they buy and sell. Imagine discussing your requirements for a collection of militaria with an overseas call centre, even worse, a claim".

Geoff's comments echo my feelings. I remember having difficulty explaining my Militaria collection in trying to get it insured, so I figured that if it was stolen, I would have an even bigger job in trying to get them to pay out.

Although collectors may have accumulated items over say thirty years and current values might be difficult to establish, there are services available to value collections. Roy Butler from Wallis and Wallis says that they charge 1.5% of the total of a collection, so items worth say £30,000 would cost £450 to be valued. Roy also recommends that in order to avoid constantly having to update insurance policies a collection is insured for fifty percent more than its current value. This should suffice for the next five years. He says insurance companies are not fools though and you could not insure a Waterloo medal that was just bought for £5000 for say £10000. Roy's fifty percent logic certainly makes some sense as an Iron Cross 1939 second class retailed for about £35-40 in 2000 and now sells for about £65-£70.

Although insurance companies might not necessarily stipulate that you keep an individual list of items under a certain value, it is certainly sensible to do this as they will ask for one if the items are stolen. It is also recommended to take detailed photos and describe items which will help the police to recover them. The British Antique Dealers Association has more advice on the valuing, security and insurance of collectibles on their website - www.bada.org/advice_valuing.html

The trouble with under-insurance is that you don't usually find out until something bad has happened. So now is the time. Take a pro-active step and get your policy checked. If it is not adequate or you feel your current insurer doesn't have an understanding of what you want, then it is time to depart but don't worry, there should be something for everybody. You might have to put some work in but surely it is worth it for piece of mind. Your collection has taken many years to form, a day or two should be all it takes to ensure it is fully covered.

Dovetail Insurance Services Ltd
Maple House, Bayshill Road,
Cheltenham, Glos, GL50 3AW. UK