Roy’s Note: Josh Scribner has put together an interesting article on insuring personal wine collections and provides solid insight into the process and explains how to avoid the pitfalls that some wine collectors fall in to. When Josh first pitched me on this article he mentioned: “Most people are like me; misled by homeowner’s policies to think they are covered, when they are not.” Josh coordinates wine tastings in NY focused on Port & Sake, and is the inventor of the Port Garrote, a modern approach to bottle tongs
If you told me five years ago how much wine I would have today, I would have fainted. There’s a lot of wonderful juice in my collection, most of it Port, and I look forward to drinking every bottle in due time. However, I do not look forward to the possibility that my collection – and the investment that backed it – might be damaged by fire or flood. I have left home too many times worried that I’ll return from a holiday only to find a box truck made off with the lot of it. So I called my insurance company.
When I first purchased homeowner’s insurance, I was repeatedly (verbally) assured that valuables up to about $220K were all covered – including wine. Last month I asked for this to be confirmed, or for a “valuables” or “collectibles” rider to be added, and they called the underwriters to check. As it turns out, my wine has been uninsured for years, qualifying only as a “consumable” for which the maximum coverage is $500.
If you ever worry about what happens to your wine in the event of fire, flood, theft, “unauthorized consumption,” or even a butter-fingered bottle drop, it means you don’t know if you have insurance. Given the state of insuring wine these days, if you haven’t specifically made arrangements, your collection isn’t covered.
How to insure your wine
There are three primary ways that you can insure your wine. The first, and most expensive, is to move it all to offsite storage. Your wine will be maintained at the proper temperature, humidity, etc, and is available to you when you arrange to go fetch it. One of my tasting buddies tells me that he pays about $600 insurance annually for a $13K collection, or about $4.60 per $100 insured, in addition to storage costs. I’ve seen it as low as $1.00 per $100 insured, in addition to storage costs.
The second way to insure your wine is to purchase homeowners insurance from either Chubb or Fireman’s Fund. Chubb has a “Personal Collectors” line called “Valuable Articles Coverage.” Fireman’s Fund has a “Personal” line called “Prestige Collections.” Both will offer riders to your policy to cover your wine, though I do not know the exact cost. I suspect this is the most cost effective option for the wine, but not necessarily your house.
The third way is to insure your wine with a standalone policy. The Chubb line is available on stand-alone basis if your collection is “well over $100K,” which doesn’t help small collectors. This brought me to a product called “InsureYourWine.com” offered by California insurance broker Bliss & Glennon and marketed by Cellar Advisors. For $0.75 per $100 insured (with a minimum policy of $200), plus a $50 annual fee, they would insure my wine.
Naturally suspicious of anything I find on the Web, I contacted Bliss & Glennon to learn more about their insurance offer, which led me to the broker in England that they partnered with, which led me to UK insurance supplier Royal & Sun Alliance’s Marine Insurance Company who actually holds this insurance line. They confirmed that the insurance is legitimate, and their documents name both Bliss & Glennon and InsureYourWine.com.
InsureYourWine.com offered a couple of other nice features. They covered storage offsite (so I could have some of my collection at a facility and use my own insurance), and if I transported my wine (i.e. when I shipped a purchase from Chicago, or if I move), it’s covered in transit.
The one downside is the $200 policy minimum and $50 annual fee; which basically means that – in NY state at least – you are insuring $26K whether you have that much or not. It’s still a reasonable price, and it is the only stand-alone option I could find for collections under $100K.
I am writing this only as a client; I’m not getting a referral fee, discount, or other commission, and I have not yet had need to file a claim. Rather, having done the research to find the insurance options available, I am sharing this knowledge with you. If you are at all concerned about protecting your collection, I would recommend examining the InsureYourWine offering.
Article by Josh Scribner © May 2010