"Fair Market Value" For Insurance Application

Hugh Wood seems to be the name that keeps popping up but after doing some research I was surprised to find at least three other companies that have a long history of providing stamp collection insurance. It may pay to look into each of them although Wood seems to have a good reputation. I have started reaching out to those companies and will share my findings for those that are interested.

rogdcam,

I am interested in learning more...please PM or email your findings. Thanks!


Scott

To "piggyback" on Walkman82's question about "how can the FMV or replacement value be determined......." for items bought in the distant past? As an example, I've been working on the Italian part of my slowly downsizing world wide collections. I have short sets of all the Italian Aegean Islands sets from the 1920s that were part of a worldwide collection that I bought in 1982. A receipt for that collection; assuming that I had one, which I don't; wouldn't help.

In terms of replacement costs, except for really unique stuff like discussed by Walkman82, it may not be as pricy as one might think. The current issue of Dr. Bob Friedman's sales flyer, that I received on Sept. 10, has US collections for sale at 17% of catalog, with all items described as being sound stamps. One is: "Mint 1851-1940 (US) collection with a catalog value of $84,000." Asking price is $13,995. Also advertised is "$48,000 catalog value of sound used 1847-1940 stamps with no duplication." The ask is $7,995.

I'll note that I've insured my collections; the ones now gone, to be gone, and to be retained; with Wood for years.

So... I utilized the contact email provided on Hugh Wood Inc.'s website on Sep 14. No response. Called them today; they could not track down the email. No worries; the same phone call became the medium for inquiry. My take-away:

- Purchase receipts are an acceptable basis for valuation
- My $4,000 collection imputes to a $25/year premium
- For perspective, a $100,000 collection requires a $290 premium.

They're sending me an electronic application template, and off we go.

I just went with Wood myself. The others were not very responsive. I spoke with Courtney and it was easy and pleasant.

I am insured through Collectibles Insurance, a competitor to HW.

When I first asked about insurance, they asked how much I wanted to insure the collection for. When I said I wasn't certain, the agent asked how much the collection was valued at. I made a wild guess and said $20,000. That was what I started with for insurance.

The agent next suggested I start a detailed inventory of the collection because after describing it to her, she felt I might be underinsured. So, I started a spreadsheet, entering each stamp and then scanning an image of it, along with any documentation or certificates I might have. I've been steadily working at this inventory now for a decade. I'm probably about 70% through the collection.

I highly recommend doing this for your collection. First, it forces you to look at every stamp, cover, piece or artifact in your collection again. You'll have to determine the value of it, so you'll be researching the catalogs as well. Secondly, most collectors really don't know how much their collections are worth. I didn't I valued the collection for insurance at about 1/25th of what it was actually worth. For now, this has been straight catalog value. I'll have to go back and adjust it for SMQ where the stamps are graded when I'm done with the basic inventory.

Keep records of where you purchased your stamps (i.e., receipts, invoices, etc.) so you can establish the price paid. My understanding is that claims on stamps will be paid for Fair Market Value of what you can PROVE you have. A highly detailed inventory such as mine is going to make any claim for loss rather easy.

Is it time consuming? Yes, it is. Is it worth the effort? I really think it is. You will have to make the decision yourselves, as everyone's situation is different.

For anyone just starting out or just returning after a long hiatus, start keeping records now as you build your collection. Per stamp, entering it into your database, scanning and putting it into the collection is a matter of a couple minutes per stamp. If you keep it up as you go, you've got the collection documented.

A collateral benefit of this type of inventory is that when I consider a purchase, I can go right to the images of the stamps I have and determine whether I needs a particular issue, whether the stamp I'm looking at is an upgrade or whether it already resides in the collection in comparable condition.

Also, while it's probably obvious, given our older demographic this probably bears repeating: make sure that your documentation is stored in the cloud, not just on physical paper or files on your home computer. If your house burns down and that's where your receipts and documentation were stored, that's really not going to help you with your insurance claim.

Paper, thumb drive and cloud.

so then, My $5,000.00 collection should cost $26.00/year?

The rate also depends on if you have a monitored alarm. You do not need to catalog modern some modern material carefully. For example, if you have a US mint collection post 1930 the value or just take face multiple by 2 to get catalog value.

I'd caution against just a face X 2 on modern US material. If you go through the U.S Specialized, you'll find many modern issues which are beginning to appreciate at a rather significant rate. For instance, the Jazz Singer/Blues Singers 29 cent issue for a pane of 35 has a face value of $10.15 but a catalog value of $55.00.

For anything after the 10 cent era which is priced in the catalog at double face, you're correct. You'll be surprised how many issues are above that, though.

Take the time to figure out which issues have appreciated before just assigning a double face value to the collection's valuation.

I have done essentially the same thing, and have it insured with Hugh Wood too. Hope I never have to make a claim, but if I ever do, I'm hoping everything goes smoothly

Matt

I was going to go with HW but the process of cataloging my collection is simply not possible due to the vastness and also the significant time it would take to research and evaluate some of the Imperial Russian stamps and first flight/autographed/historical covers. I agreed to pay the premium they quoted based on a very very conservative estimate of value but it was quite apparent that without a comprehensive list, it was somewhat of a waste of time. House insurance covers only $6000 as a lump sum for "collectibles", which might cover one early Canada album, at best.

One thing I wondered in all of that was how they would know what you had if you made a "catalog" of it? I can't see stamps faring well in most disasters - wind, water, and fire are not paper-friendly. Short of having documentation of certificates in a bank vault, I assume not much would survive in most cases so what's the point of the cataloging? How do they know I don't have 15 MNH Zeppelin sets? I'm aware this is fraud and in no way condoning it!! My point is that their basis seemed silly to me as I'm not interested in spending 4000 hours cataloging something I do leisurely only to sit there - not to mention I'm sure they'd raise eyebrows at some of the claims. I love buying massive collections and slowly going through, only spending any significant time on my areas of interest. The rest I just keep stocked until needed for trading or someone is looking for something specific - so it sits uncatalogued until the moment I need to know. I would rather pay a set premium, give them what I think is a fair estimate, maybe take 20-30 photos to show some examples, and so-be-it. But it sounded like without (arbitrary) proof, I'd be donating a premium that would not pay the insured dividend in the event of misfortune. Maybe I'm wrong.

Anyone have any similar experiences either way? I would love to insure my collection as it is my passion and I have invested considerably in it and don't mind several hundred in premiums for piece of mind. If there was a more effective and meaningful way.

I do recall one way they mentioned was having an appraisal done. I also questioned that on two basis - to appraise a collection of any magnitude would cost thousands and would remove the fun for me in going through my own stuff. Additionally, I would argue I know the value of my own collection better than a general appraiser - I would say most of you could say the same. That also seemed silly.

My documentation consists of receipts, certs and an excel spreadsheet. Everything is scanned into electronic format. Hard copies are in binders, electronic copies are on a computer, a USB stick and a Cloud. Only items that are not of low catalog value are documented like this for obvious reasons. I doubt that the insurer really cares much about thousands of stamps that are really worth pennies or a few dollars for that matter and so for those items I have a catalog number in the excel sheet and for my own use it has condition etc..