Protecting Your Clients’ Wine Collections

Like an increasing number of individuals, some of your clients may be wine collectors. Many wine collections are increasing in value, and collectors may be inadequately insured.

The U.S. Wine Market Is Growing

The U.S. is now the largest wine market in the world in terms of revenue. According to Impact Databank, the estimated retail value of wine shipments is increasing at 5% each year. In 2013, it was a $36 billion market.

Home wine cellars are more popular than ever. Homeowners are increasingly in favor of renovation over moving, and many are increasing their homes’ value with the addition of a wine cellar. Not only does this add a “wow factor,” it has the practical purpose of preserving and collecting quality wine.

Wine Valuations Are Increasing

A wine collection can represent a significant asset, especially as the value of some wines is increasing. Auction prices are hitting new highs in recent years. In fact, three bottles of Château Lafite-Rothschild 1869 vintage sold for $230,000 a bottle in 2010! While the average collector may not own such a coveted piece, it’s likely that their collection is undervalued – and at risk.

The Limits of Homeowner’s Policies

Collectors may be well-versed in the proper care of their wine, but they may not suspect that they have inadequate insurance coverage. Collectors may believe that a standard homeowner’s policy will provide the appropriate coverage in the event of loss, damage or theft. Additionally, they are often unaware that it may be more difficult to have a collection accurately appraised though non-specialized insurance providers.

Insurance Tips for Wine Collectors

There are several simple steps collectors can take to insure that their wines are valued and insured properly:

  • Wines should be reappraised on a regular basis. Doing so helps to ensure that coverage is adequate as market values increase.
  • Good documentation should be maintained. Collection owners should document their wines’ details, beginning at purchase, with a full description and invoice.
  • Finally, it’s vital that collectors consult with a specialized insurance professional. This is an opportunity to make sure that your clients are adequately covered with the proper policy.
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