On August 14, 2014, eBay came alive with a fascinating auction. A pristine copy of Action Comics No.1 - which saw Superman grace pages for the very first time in 1938 – was put up for auction by Darren Adams, the owner of Washington-based comic book shop, Pristine Comics. Bidding started at 99-cents and within two-hours had reached $1.6 million. The comic eventually sold for a record $3,207,852, making it the most expensive comic in history. In this case, the Man of Steel might as well be called the Man of Gold.
This is a prime example of how collectibles - whether we’re talking comic books, sports memorabilia, Star Wars paraphernalia, coins, stamps, fine art, jewelry, you name it – can increase in value over time until they’re worth a substantial amount of money. Let’s not forget that collectibles are also rich in history, memories and nostalgia – all things you can’t put a price tag on.
With such underlying value at stake, collectors of unique items should consider purchasing valuable articles insurance coverage, according to Charlie Graham (pictured), national high net worth business development executive at Orchid Insurance. While typical homeowners’ policies contain some coverage for valuable possessions that may get lost, stolen, or damaged, it’s usually limited and insufficient for insureds’ valuable collections. Valuable articles coverage makes up that shortfall and protects people’s most prized possessions.
“Valuable articles insurance covers most causes of loss at home and across the globe with no deductible,” said Graham. “It’s a flexible coverage option that can meet the unique needs of the individuals. Covered ‘valuable articles’ can really run the gamut from a classic collection of PEZ candy dispensers, to a pair of inherited diamond earrings, to silverware, golf clubs, artwork, and so on. The insured may have one high-valued item, or 500 lower-valued items – it’s an individualized coverage option.
“A typical homeowners’ policy does provide some coverage for valuables, but it’s limited. Things like mysterious disappearance – for instance, a gemstone falls out of a ring and the insured doesn’t know what happened to it – would not be covered under a homeowners’ policy but would be covered by a valuable articles policy.”
One of the key things about unique collections, as seen in the Action Comics No.1 auction, is that they often increase in value over time. Oftentimes, with a valuable articles policy, if the market value of a collection or a prized item exceeds an insured’s coverage limit at the time of a loss, specialized high net worth carriers will pay up to 150% of the insured amount.
“High net worth carriers, like Chubb and AIG, assist insureds by offering them access to appraisal services. They recommend that insureds get regular appraisals on high-value items,” Graham told Insurance Business. “Certain items like gold, larger diamonds, or particular artists’ works are typically escalating in value, so getting a regular appraisal helps insureds to make sure they have enough coverage. The fact that carriers, for example AIG in its private collections policy, can pay up to 150% of the scheduled value of a particular item is also very beneficial.”
Brokers and agents serving clients with high-value possessions need to ensure they’re asking the right questions, according to Graham. She explained: “If they’re in a client’s home talking about their homeowners’ policy and putting together an insurance package, they need to ask the questions: ‘Do you have any unique collections? Do you have valuable artwork or jewelry? What would it mean to you if those items were lost in a fire? What do you think those items are valued at today?’ It’s important that they know their prized possessions can be protected with a valuable articles policy.”