Are you a wine collector, and do you spend a lot of money and time on building a nice collection? Then this blog post is for you. It is without a doubt that the value of fine wine increases with age and is usually passed down from generation to generation. Similarly to art and fine jewelry, fine wine is a significant financial asset that needs safeguarding. This is why you need wine insurance to give you the protection you need. You will also be learning how to insure fine wine, but first, there are other things that you need to know.
What is Wine Insurance?
Wine insurance is comprehensive insurance coverage that will compensate you for losses and damage caused by natural disasters and other unexpected situations that are part of your policy. It also protects policyholders against spoilage, damages, and theft that could lead to financial losses.
Unlike those who just pop open a bottle of wine, pour it into a glass, and drink, some people gather collections of different wines. Those kinds of people are called wine collectors, and they need insurance to protect their collections.
Types of Wine Insurance
There are different insurance policies, and they differ by level of coverage and type. These are the four common types of fine wine insurance:
- Spoilage coverage
- Damage coverage
- Transit coverage
- Theft coverage
These four types of insurance have certain areas that they cover when you get a policy for your wine collection.
What Does Wine Insurance Cover?
Apart from protecting policyholders from unexpected events or situations, there are other coverage options that this insurance offers. Here are some coverages that will and may be part of your quote:
- Misplaced or lost bottles.
- Accidental breakage.
- Burglary or theft.
And damages caused by:
- Drain backup.
- Natural disasters.
- Mechanical breakdown.
Additional coverage options include:
- Cleanup coverage.
- Auction and display coverage.
- Replacement-cost coverage.
- Collectible component coverage.
- Worldwide coverage.
- Agreed-value coverage.
- Appraisal fee coverage.
Therefore, you can choose to add or include any of these coverages in your policy. However, once you cork open the wine and drink it, the coverage is no longer applied.
Do I Need It?
If you run a wine manufacturing business or collect wine, then you definitely need wine insurance. Not only is this policy important, but you also get a sense of protection if anything unexpected happens. However, the average consumer with different bottles in a home cellar does not need insurance. Nevertheless, if you have a fine wine collection worth $85,000 or higher, you should insure your collection to get the utmost protection.
Some of the risks involved include spoilage, damage, and theft, which will cost you more if you do not have an insurance policy. In addition, if you have climate-controlled cellars, you should take protection more seriously. This is because any equipment that gets damaged can cause the whole collection to spoil.
How Much Does Wine Insurance Cost?
The average cost of fine wine insurance is between $1,000 and $2,500. However, this is not the amount that all lenders offer. On the contrary, they offer different prices for the purchase of a wine insurance policy. Accordingly, the premium you pay is based on risk factors and collection value. But these are not all the factors that affect the cost of wine insurance.
Other factors include:
- The location of the bottles.
- How often are the bottles in transit?
- The conditions they are usually stored in.
With these factors combined, the final cost of a policy will be determined.
Factors to Consider When Choosing Fine Wine Insurance
I am sure that you want the best coverage for your wine collection, right? You are in luck because this is something you need to know. There are certain factors that you need to consider when you want to choose fine wine insurance. They include:
- Premium costs.
- Coverage limits.
- Insurance company reputation.
All of these factors vary among lenders, so you will have to compare these elements to find the best policy and coverage plan from any lender.
How to Insure Fine Wine
The first step you need to follow when you want to insure a wine collection is to list and record the collection by wine year, type, storage collection, origin, and values. Although most insurance providers will not ask you to carry out an evaluation or rating, it is a good idea if you do it on your own.
Besides, this will help you know more about your wine collection and discover its replacement and resale value. Additionally, you get to find out how much coverage you need.
Once you have gathered multiple quotes from different wine insurance companies, compare their pricing and coverage terms to choose the best policy. You can also read online reviews from existing and new customers who have used and are using their services to learn more about the insurance company.
If you eventually find a good insurance provider with good coverage terms and pricing, you can apply to purchase a policy. Feel free to check out AIG, Chubb, and Liberty Mutual to buy good wine insurance.
