Insuring High-Value Collectibles 

There’s investing in stocks, and there’s investing in collectibles. In the latter case, collectors represent a unique group of investors, and it may be precisely this reason why the world of collectibles is as unpredictable as it is adventurous. Some categories of collectibles represent million-dollar investments. Water damage, theft, and even the occasional “Oops, I dropped it” can be significant risk exposures for your client’s collection. Here’s what insurance agents should know about insuring high-net-worth collections and why a specialized collectibles insurance policy is the ultimate safety net for investors.

The Growth of Wine Collections 

wine collection

Alternative investments are a type of financial asset that doesn’t fall under the traditional category of investments. A common example is stocks. Although using collectibles as an alternative investment vehicle is relatively new, the trend has been gaining popularity. For the wine connoisseurs out there, a burgeoning wine collection combines elements of history, culture, and flavor. Wine is quickly becoming a popular form of alternative investment, but since wines need to age in order to accrue value, it can take years for the investment to appreciate and yield large financial returns. 

Investment platforms tailored to wine collections are making it easier than ever for collectors to jump on the bandwagon and start growing their wine collections. For example, Vinovest offers a simple sign-up process where specific wine vintages can be purchased via the website to bolster a young collection. The added advantage of purchasing wine from a wine-investing platform like Vinovest is that it provides detailed information about the wine, and the site’s proprietary algorithm helps predict the bottle’s financial returns. 

The Lucrative Side of Fine Art 

fine art painting

Collectors of fine art appreciate the beauty of an art piece, feel a connection to its unique history, and understand the story behind the artwork, all while knowing that the fine art world represents a lucrative market for investors. This is one reason why collectors are so drawn to this category of alternative investments. 

The potential for fine art to generate high returns can be astounding. In 2022 alone, sales at Christie’s auction house brought in close to $4 billion for fine art collections. 

When it comes to the evolution of fine art, Jeff Koons has taken the art world by storm. And in turn, the art of collecting — and its financial returns — has reached new heights. Rabbit, a stainless steel sculpture by Koons, is worth $91 million. 

Most Popular Memorabilia Collections

star wars figurines

Out of all the alternative investment categories, memorabilia stands out amongst other collectibles due to the sentimental value that is intrinsically tied to it. Memorabilia elicits a sense of nostalgia and harkens back to childhood memories. Similar to wine, it may take years (or even decades) for items of memorabilia to appreciate in value. Some of the most commonly collected types of memorabilia are:

  • Sports Memorabilia: Sports memorabilia items (other than trading cards) have important ties to a sports hero, team, or event; it’s for this very reason that sports memorabilia can fetch millions of dollars at auction. Holding a piece of sports memorabilia in your hand can feel like owning a piece of sports history. Major League Baseball (MLB) and the National Football League (NFL) attract the largest share of collectors, but there can be value in memorabilia from just about any sports team, league, individual athlete, or event. The most popular items of sports memorabilia for collectors include:

    • Jerseys: Thousands of fans wear team jerseys to a game so that they can showcase their unwavering support for a team. Those eye-catching jerseys certainly stand out from the crowd. But, who knew that sports jerseys can also represent a lucrative investment? Sports jerseys that were once owned by famous athletes, in particular, are often auctioned for millions of dollars. A Michael Jordan jersey sold in 2022 for over $10 million dollars, the highest price ever paid for a game-worn jersey.

    • Baseballs: A bleacher-seat ticket to a baseball game may cost $30, but with just the right amount of luck, a fan could take home a game ball. Home-run baseballs (along with baseballs that have been signed by All-Star athletes) have been auctioned for millions of dollars. Baseballs are quickly gaining momentum as high-priced collectible items.

    • Sports Figurines and Toys: Sports figurines aren’t just your average toy — some come attached with a hefty price. These bobble-heads are worth over $40,000 dollars!
  • Hollywood and Pop Culture Memorabilia: Hollywood and pop culture are so deeply woven into our society that almost everyone has their own list of favorite movies, TV shows, and stars. At auction, pop culture memorabilia can fetch a high price for the most coveted pieces. Here are some of the most collected items:

    • Autographed photos: Whether it’s during a scheduled press event, or during a humble encounter at a coffee shop, many starstruck fans will seek opportunities to obtain autographed photos of their favorite celebrities. Investors and collectors alike are ready to pay thousands of dollars for these autographs.

    • Scripts : Investors search for scripts from box office hits and classic films because they are part of Hollywood history. A script for the 1962 film “To Kill a Mockingbird” recently sold for nearly $85,000.

    • Costumes: Costumes enhance the plot and drive the storyline forward. But what happens to the costumes when the filming ends? Many costumes are sold at auction as rare collectible items. Audrey Hepburn’s iconic sleeveless black dress from the 1961 film “Breakfast at Tiffany’s” sold at auction for over $900,000!

    • Toys: Toys are an excellent example of the crossover between Hollywood and pop culture. Just think about Star Wars. More than a series of movies, the Star Wars universe has created its own pop culture niche, and collectors avidly seek out new and vintage Action Figures and other items. This collection of Star Wars toys sold for nearly $350,000, more than 10 times its pre-auction estimate.

Should Your Client Insure Their Collections? 

sports jerseys

The answer is a resounding yes, and here’s why: The tension between high risk and high return is especially evident in collectibles. On one hand, certain collectibles — such as fine art, memorabilia, and wine collections — have the ability to generate potential profits into the thousands and millions of dollars. On the other hand, many types of collectibles are very susceptible to devaluation due to damage, theft, and loss. 

As an insurance agent, you can help your client protect the full appreciated value of their investment with a specialized collectibles insurance policy. Collectors who aren’t aware of this type of monoline coverage may be defaulting to coverage under a standard homeowner’s policy, which is not designed to protect items that are expected to appreciate in value. High-value collections displayed in a corporate office or other commercial setting also need specific coverage, usually best accessed through a monoline collectibles insurance policy.

Here’s how a collectibles insurance policy can protect your client’s collection:

  • Burglary: Unlike common household items, valuable collectibles may be impossible to replace in the event of a burglary and inadequately covered by homeowner’s or renter’s policies. A monoline collectibles insurance policy should include coverage for the full collectible value of the insured item based on an appraisal.

  • Accidental Damage: Broken or damaged fine art and unique collectibles may be irreplaceable if damaged. Carriers that specialize in covering collectibles may have the expertise and resources to restore a damaged item and retain much of its value. For damaged items that are beyond repair or restoration, collectibles insurance offers coverage for the appreciated value of the item, which can help to compensate the policyholder. 

  • Fire, Wind, and Water Damage: With catastrophic weather events on the rise, coverage for fire, wind, and water damage is critical for collectors of fine art and items in hundreds of other categories. 

MiniCo has your clients covered with our exclusive Collectibles Insurance program. The monoline policy includes all-risk coverage with limits up to $1 million (and up to $4 million with carrier referral). There’s no appointment needed to get a quote and no appraisal required for most collectible items. Plus, we make it easy to get a quote on our online agent portal. Get a quote online or contact an underwriter to learn more.

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