Barbies, Apes, Model Trains Galore; Don’t Forget Those Collectibles

Let’s say you’re sitting in a client’s living room, putting the finishing touches on a homeowners policy renewal. Everything is going as planned. That is, of course, until you see it. Perched on the mantel across the room is a miniature, plastic ape-like creature adorned in robes. Upon further inquiry, you realize that your client has a fancy for anything related to “The Planet of the Apes,” and that the figurine presiding over his den is indeed a 1974 Dr. Zauis doll, by Mego. And he has 15 more in the basement!

If you begin to edge towards the door without asking if the collection is insured, you’re making a huge mistake: your client represents one of the millions of people involved in a $30 billion collectibles market.

Yes, independent agents need to ask customers if they have a collection of any type and then consider whether specialty collectibles coverage is appropriate.

Collectibles insurance is designed to protect the treasures that people collect and store in their home or on their property—items usually not completely covered by homeowners insurance.

Figurines, dolls, teddy bears, vintage toys, model cars, miniatures, collector plates, ornaments, animation art, Disneyana, model railroads and carousel animals are considered insurable collectibles. (Typically, “paper” collectibles such as stamps, cards and documents are not insurable as collectibles, and neither are record albums, video cassettes, china and flatware, watches and jewelry, coins, firearms, furniture or fine art.)

Today’s most popular collectible items run from classic toy trains, model cars and trucks, and vintage toys of all kinds to antique and contemporary doll collections, figurines by Lladro, Hummel, and Swarovski, and rare and antique teddy bears.

Features common to a collectible policy include:
• Specific coverage for the collection, providing coverages against perils such as accidental breakage, theft, fire, wind storm, flood, water damage and earthquake.
• Additions to the collection automaticaly covered for 30 days.
• Agreed-value coverage.
• More than one collection insured by the same policy.
• Knowledge-specific claim settlement.

A collectors policy does not cover loss caused by normal wear and tear; gradual deterioration; inherent vice; insects or vermin; repairing, restoration or retouching; being handled or worked on; theft from any unattended auto; and mysterious disappearance.

Don’t allow clients to rely on homeowners coverage to protect collectibles—it’s not sufficient or reliable since it’s designed to protect the home and its contents, and may not contain any language for collectibles. Collectibles could get labeled as personal property should a claim arise. The typical homeowners policy only covers named perils—and these may be more limited than what is covered by a collectibles policy. It may not be your fancy, but your client probably doesn’t want his elaborate “Battle Star Galactica” thermos collection to be at risk.

So it’s up to you to guide your homeowners clients into considering and purchasing a collectible policy.

First, you’ll find that a collectibles policy is a simple sell and an easy way to please your client. The policy serves as a real door-widener to the customer, because you’re talking to people about something that means a lot to them. You’re seriously discussing a collection that has both monetary and sentimental value.

Second, as their agent, you should explain the limitations of a homeowners policy and how those gaps can be filled by a policy that’s specifically tailored to the needs of collectors.

The saying “Don’t let a gap in coverage be filled by your errors and omissions policy” applies to the collectibles insurance business. By linking your client with a collectibles policy, you’re avoiding E&O problems while cementing the relationship with your client. The client is being served by people who understand what he or she is collecting; are valuing it appropriately; and are providing comprehensive, affordable coverage with reliable, knowledgeable agreed-value claims service.

Third, agents who ask about collections can discover hidden sales opportunities. You might be sitting in a customer’s dining room reviewing a homeowners policy and notice a curio cabinet filled with Lladro porcelain figurines. You ask her about the collection, and she says that the collection grows every year. She adds: “You know, I have no idea what it’s worth.”

This is a typical pattern with collectors: friends and relatives of collectors often add to the collection with birthday and Christmas gifts. So the collection grows over the years and the customer may not be aware of its value. When you suggest that it’s worth their time to determine the collection’s replacement value, the customer may come back to you later and say, “Would you believe this is a $30,000 collection? I really want to talk to you about that collectibles policy.” That happens a lot. Sometimes you’ll talk to an avid collector who knows exactly what the collection is worth, but many people are under the erroneous assumption that a homeowners policy will cover collectibles in the event of a loss.

You, the agent, have the responsibility and the opportunity to discuss collectibles and the risks that the client faces if they are not insured. It’ll please your collector client, cement your business relationship, and be a recurring add-on sale for your agency.

Jill Bookman (jill.b@americancollectors.com) is CEO of American Collectors Insurance Inc., which is a managing general underwriter specializing in collectibles insurance and collector vehicles insurance, Cherry Hill, N.J. For further information: www.AmericanCollectors.com. Shown: Vintage Barbie Doll. Photo provided through the courtesy of Murat Caviale Inc., publishers of the Barbie Bazaar and Haute Doll magazines.

Topics Homeowners