Evaluating A Collection For Insurance Purposes

What is the best way to evaluate a collection for insurance purposes?

For example if one has a mint sheet collection, I would not expect one to get insurance at the catalog value. I was thinking you have two groups: pre-1940 and post 1940 (to pick a year) valuations with exceptions for special cases.

Al

Have you tried calling or E-mailing Hugh Wood? http://hughwood.com or 212-509-3777.

Peter

I don't know if there's a "right" answer, but I have my collection insured at the approximate value I think it would take for me to replace it at average present day retail prices. This is, of course, well below catalog. If figuring replacement value, you'll also want to figure in the cost of albums, binders, mounts, stockbooks, etc. It would probably cost me at least $1500-$2000 just to replace the Lighthouse binders and stockbooks I've bought over the years, for example.

I agree with ArtfulHinger--go with replacement value.

angore - if it is worth a lot you must have it appraised by a certified appraiser. That's if you expect to get insurance - and you expect to get reimbursed if there is a loss. If a smaller value, many house insurance policies can provide a "collectibles rider" - for stamps, coins, art, ephemera, etc - and the cost is minimal.

Yep. That is the reason I suggested to contact Hugh Wood. He could give you better advice as to how to proceed.

Peter

I disagree with CanadaStamp. If you are serious about collecting, your choices are Hugh Wood (APS-RPSC) or Collectibles Insurance Services. Their costs are normally less than adding a rider to your homeowners insurance policy ... and they understand and are prepared to pay off claims in the event of a loss. Appraisals are not normally required. Personally, I do have a collectibles rider on my homeowners policy for the maximum amount the company will write, $5,000. Inadequate for my stamps, so a separate policy is carried with Hugh Wood through the APS.

I have had Amica Homeowners for years. They have
stated that for every collection, no matter what
type of collectible, they want an appraisal to extend
special coverage. Simple coverage is one thing.

Replacement cost could be done all at once or one by one.

For example, for example, many US collectors may have complete mint single collector from say from #528 to date. You see many collections in auctions. This would be less expensive than purchasing them in smaller groups.

I agree that you need to factor in albums, mounts, etc.

I plan to contact Hugh Wood (have insurance with them) and yes most homeowners policies limit coverage collectibles like coins, stamps and expensive items like jewelry.

Al

Insurance through Hugh Wood is very reasonable. Personally, I would estimate replacement cost at the cost to buy them individually or by the set. There's no guarantee you'd be able to find everything you want in one collection, or that the price would be what you were expecting, etc. You'd literally save yourself just a few dollars a year by insuring at a lower amount if you just figure on buying a complete collection. You're better off estimating on the high side. Now, if I had a claim check in my hands, I'd surely try to find some good collections to buy and get the most for my money, but in terms of evaluating a collection for insurance, I wouldn't value it in this manner, personally.

If you go with a specialized collectables policy, you generally don't need an appraisal for anything but the most valuable items. My experience has been that you pick and pay for a level of coverage. Should you suffer a loss, you're insured up to that amount. However, you are only insured for the value of the items lost. At that time, you'll need to document (report) what was taken and their replacement value.

Regardless of any work you may have done up front, the value on the date of the loss is the only relevant number. Receipts, scans, comparables from recent auctions, etc. will be required to file a claim.

Avoid homeowners policies - they are often much more expensive and have more onerous rules, as this type of collectable is outside of their usual comfort zone.

Call Hugh Wood or Collectables Insurance. Both are well thought of among stamp collectors. You'll probably be surprised at how little you'll need to do (fill out a form and write a check) to get insurance for a stamp collection.

C.

I'm probably alone here on this, and maybe I just like things simple.

The level of coverage I picked (as mentioned by Chip), is simply my total buying cost, rather than replacement or catalog value. I'm a general WW collector focusing mostly but not limited to 1840-1940 stamps, so these things will depend a lot on what you collect.

But my reasons are as follows:

-- it's a LOT easier; just keep a running tab (and hide it from your spouse)
-- I don't see this as a house/car (must be replaced), so I only want to get back the money I put into it
-- while I keep track of my collection catalog value, determining replacement value is quite a challenge for WW collectors because market changes up/down in different areas
-- I don't have to worry about separate replacement cost percentages for modern mint stamps, major premium stamps, damaged stamps, common stamps... because that was already factored in when I bought
-- my collection was built up over 40 years, patiently waiting for the twice in a lifetime buying opportunities; my actual 1 year replacement cost would be a lot (~5X) higher (for anecdotal example, I paid 5¢ for two of my 3-margin Penny Blacks)
-- unlike some house/car insurance, philatelic insurance doesn't care what you used to calculate your insurance level when you lose a shipment/items, they basically pay you the replacement or transaction value
-- I value more the sentimental, learning, and "the chase" value, so I would be more than happy to simply get my original money cost back
-- I'm not worried (and unlikely) to lose my entire collection, as it is spread out over 3 different locations; so even insuring at cost has the effect of being 2x-3x

With that last point, the cost of insurance is also a factor in my decision. For me, insuring at anything but cost can increase my insurance premiums several fold, for the additional insurance coverage I really don't need (remember, my collection is spread out over 3 locations). I'd rather spend that extra premium money buying an extra WW collection or a couple of extra premium stamps every year.

My situation likely doesn't apply to others, but these are just my thoughts.

One factor to consider if this applies -- philatelic insurance will cover property in transit or presented at shows. Many house insurance riders only provides coverage when IN the house. Check your policy. My property insurance actually covers property stored OFFSITE in storage units. I didn't know that until my agent told me! Coverage of items in a detached garage I would have guessed, but would never have thought property in my storage unit was covered as well!

KHJ is right on the mark. As a retired insurance broker I have determined that the philatelic coverage in my homeowner policy is minimal. It is crucial to read and understand "Coverage C - Personal Property" because that is the section of your policy that will pay philatelic losses as stamps and other philatelic assets are considered as "contents" usual to the occupancy of your home. There is generally a time limit for property stored in a warehouse or storage unit unless the policy has been endorsed to reflect otherwise. Further in the policy you will find a clause that says something like "SPECIAL LIMITS OF INSURANCE". Remember that the primary purpose of a personal property policy is not to insure collectibles - there is specialized insurance for that.
Members of the Royal Philatelic Society of Canada (resident in Canada) are eligible to participate in the specially rated philatelic insurance policy issued through Hugh Wood in Toronto. I believe that a similar policy with special rating is available to those living in the USA through the American Philatelic Society.
Although I am no longer licenced to give insurance advice, my advice is that serious collectors buy serious insurance for their collections. Talk to your insurance broker for specific advice and don't rely on either gossip or advice from the uninformed on such an important topic.
GJP