Building a collection is not just a passionate pastime; it also can be a savvy financial move. The value of fine art, jewelry and wine continues to appreciate, but that means that you also need to think about protecting those assets from mishaps.
For instance, once you purchase a piece of fine art, it’s a good idea to immediately plan your protection strategy. At the time of purchase, inquire as to any special requirements that might be needed for protection. Ask the gallery or dealer for any advice they might have and inquire as to the care and handling instructions. Then speak with your insurance agent about proper coverage in case of damage or theft.
“There is growing evidence that people are viewing the purchase of art or collectibles as an investment,” says Martin Hartley, chief operating officer of Privilege Underwriters Inc. (PURE Insurance) “It’s a great deal of diversification from the stock market and bonds — and it’s fun, too.”
Investment-grade wines—including high-end Bordeaux, Burgundies and cult California Cabs—have consistently held their value. Since most of these types of wines get better with age, it gives you time to decide whether you want to drink or sell select bottles. Either way, you can take steps to preserve both the taste and value.
When it comes to wine collections, you need to know the threats. Most claims result from five areas: temperature control malfunctions; theft or disappearance; power outages; water damage from flooding; and bottle breakage.
Unfortunately, the majority of wine collectors do not have adequate insurance. They accumulate wealth in their cellars, but few think about the perils facing their “liquid” investments and most homeowners policies specifically exclude coverage for perishables, such as wine.
Through their network of insurance agencies, high end insurers like PURE, team up with family offices and wealth managers to provide consulting regarding coverage on higher-end property for clients with significant collections.
The world of property coverage for the wealthy can be rife with misunderstanding. As there are typically estate-planning and insurance implications for inherited works of art or other collections, having professionals to help navigate is beneficial. While not everyone owns a Picasso or a Petrus from France, you should make sure your prized collections have its own policy.
Content provided by Rogers & Gray Insurance Agency. Visit RogersGray.com for more information!
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