Insuring your OA collection 0

[Sooners151]

Insuring your OA collection

So my newly started OA collection just got a major (for me) piece over the last day or so.  It will be about 60 days before I get it, and excited to post it here and CAF when I do.

I saw a recent topic on insuring your comic collection, but I wanted to know who has insured their OA collection and how was the process in doing so.  OA is so subjective, and relatively niche compared to comics or other collectibles, so appraisal may be difficult.  I live in the heart of Tornado Ally, and try to insure as much stuff of value that I can just in case.  

Any comments are appreciated.  

Edited June 1, 2017 by Sooners151
further clarification

[Mr. Machismo]

Yuuup. Read through a collectibles policy today. Mentioned replacement costs and assessing similar market pieces to determine value, and that the listed coverage value (even if proven with purchase receipt) does not mean that's what the payout will be. Obviously, this is problematic when it comes to one of a kind pieces, especially if you seek the best examples and they find a low-tier one to equate it to. Sigh!

[comicwiz]

On 2017-06-01 at 2:26 PM, Mr. Machismo said:

Obviously, this is problematic when it comes to one of a kind pieces, especially if you seek the best examples and they find a low-tier one to equate it to.

Not if you have an appraisal report from an accredited appraiser. It is the baseline, and even in the case the valuation is severely out of date (say the loss happens 5 or 10 years after you had the appraisal done) you should still notify the original appraiser who produced the report to have them reevaluate. I'm suggesting this because an adjuster will always try to cherry-pick as contextually disimilar a data point to pay out as little as possible, BUT they won't get away with it if you protect yourself as I have advised above.

[Twanj]

1 hour ago, comicwiz said:

Not if you have an appraisal report from an accredited appraiser. It is the baseline, and even in the case the valuation is severely out of date (say the loss happens 5 or 10 years after you had the appraisal done) you should still notify the original appraiser who produced the report to have them reevaluate. I'm suggesting this because an adjuster will always try to cherry-pick as contextually disimilar a data point to pay out as little as possible, BUT they won't get away with it if you protect yourself as I have advised above.

Ok, this is a dumb question since I don't have collectible insurance but isn't the cost of your premium based on what your payout would be if the item was lost/stolen/destroyed?

So if something was appraised at $1,000 you couldn't have it insured at $2,000 to futureproof things? Your payment would be higher but if that's how you wanna spend your $, they wouldn't take it?

These aren't interchangeable commodity cars that can be replaced so easily.

[malvin]

6 minutes ago, Twanj said:

Ok, this is a dumb question since I don't have collectible insurance but isn't the cost of your premium based on what your payout would be if the item was lost/stolen/destroyed?

So if something was appraised at $1,000 you couldn't have it insured at $2,000 to futureproof things? Your payment would be higher but if that's how you wanna spend your $, they wouldn't take it?

These aren't interchangeable commodity cars that can be replaced so easily.

I don't know,  But in general, I would think that allowing someone to insure something for higher than the appraised value because that's the value to them and they are willing to pay the premium will lead to trouble.

Malvin

[Mr. Machismo]

2 hours ago, comicwiz said:

Not if you have an appraisal report from an accredited appraiser. It is the baseline, and even in the case the valuation is severely out of date (say the loss happens 5 or 10 years after you had the appraisal done) you should still notify the original appraiser who produced the report to have them reevaluate. I'm suggesting this because an adjuster will always try to cherry-pick as contextually disimilar a data point to pay out as little as possible, BUT they won't get away with it if you protect yourself as I have advised above.

So, you do that ahead of time?

I spoke to my broker today and she said no one in the area offers collectibles insurance—but, it's already covered under my regular home insurance under X dollars allocated to "contents." She said as long as I have original purchase receipts/invoices, and send a once-a-year inventory to them (I'm thinking it's safer to take a quick timestamped video every month or so and store it on a cloud server) that it's fine. But I was always under the impression home insurance will only cover material cost of the item (paper = pennies.) Confusing!

[SquareChaos]

2 hours ago, Mr. Machismo said:

So, you do that ahead of time?

I spoke to my broker today and she said no one in the area offers collectibles insurance—but, it's already covered under my regular home insurance under X dollars allocated to "contents." She said as long as I have original purchase receipts/invoices, and send a once-a-year inventory to them (I'm thinking it's safer to take a quick timestamped video every month or so and store it on a cloud server) that it's fine. But I was always under the impression home insurance will only cover material cost of the item (paper = pennies.) Confusing!

Full disclosure right up front - I don't know much about this type of insurance, and I don't personally carry anyway. However... I know I've read a number of threads here that suggest you need specialty insurance, regular coverage through normal insurance (home / auto, etc) can often end up being one of those situations where you thought you were much more protected than you actually are. I think a lot of what I've read on the boards over the years was geared toward comic and slab insurance, but I can't help but imagine the same is true for original art.

[comicwiz]

59 minutes ago, SquareChaos said:

I know I've read a number of threads here that suggest you need specialty insurance, regular coverage through normal insurance (home / auto, etc) can often end up being one of those situations where you thought you were much more protected than you actually are.

To clarify, the reason why most are left exposed is because they get sold on a policy/plan and the final number. I'm insured, I know I look for the best deal. I reevaluate every year for my vehicles. One example here in Canada is people seem to have become more accepting of a higher deductible to save on auto insurance. What they don't realize is that the deductable just removes more of the financial hit from the insurer in the case of an accident. But worse is the fear that when people put in a claim, their premiums will increase, so it's a double jeopardy scenario people have accepted, once agreeing on a higher deductable (eliminating the purpose of opening a claim for windshield damage or other minor repairs) and secondly by paying out of pocket in more severe accidents where insurance should be used, but don't because they want to keep their premiums low.

Where actual cash value coverage (which is what is used for most personal property, including vehicles) doesn't make sense is on items that appreciate in value. Replacement cost is they type of coverage required for items such as OA.

If you ask for replacement cost coverage, and you have an impartial appraisal performed on the value of what you own, those peril situations leaving you unprotected are significantly minimized. The only exception which may occur is when an adjusters will try to pay out as little as possible. I had a client with an actual cash value coverage claim who was offered $21K. They contacted me and even though I hadn't looked at their file for over a year, I knew that number didn't sound right. I spent about 10 minutes researching comparables and came up with not only the data point used by the adjuster (which was so disimilar, the case was easier to make for my client), but the actual comparable they should have used as well. I told my client he shouldn't accept less than $26K, and provided not only the information for the comparable, but coached him on the terminology he needed to use in case the adjuster disputed it. The next day, he called the adjuster, advised he spoke with me, and the adjuster apparently agreed and wrote the check without any objections.

Edited June 3, 2017 by comicwiz

[comicwiz]

3 hours ago, Mr. Machismo said:

So, you do that ahead of time?

I spoke to my broker today and she said no one in the area offers collectibles insurance—but, it's already covered under my regular home insurance under X dollars allocated to "contents." She said as long as I have original purchase receipts/invoices, and send a once-a-year inventory to them (I'm thinking it's safer to take a quick timestamped video every month or so and store it on a cloud server) that it's fine. But I was always under the impression home insurance will only cover material cost of the item (paper = pennies.) Confusing!

If the policy isn't written using replacement cost coverage, it isn't going to protect you in the event of a loss. The first red flag is when they ask for reciepts. This is alright for items that don't appreciate over time (and they have handy formulas to factor in depreciation cost on personal property), but what good is a reciept on an OA piece that's doubled or tripled from the time you bought it? Without replacement cost coverage, you'll maybe get the full amount shown on your reciept, but never the current market value of the item at the time the loss occurs.

Edited June 3, 2017 by comicwiz

[comicwiz]

4 hours ago, Twanj said:

Ok, this is a dumb question since I don't have collectible insurance but isn't the cost of your premium based on what your payout would be if the item was lost/stolen/destroyed?

So if something was appraised at $1,000 you couldn't have it insured at $2,000 to futureproof things? Your payment would be higher but if that's how you wanna spend your $, they wouldn't take it?

These aren't interchangeable commodity cars that can be replaced so easily.

When a replacement cost appraisal is performed, it anticipates all associated costs to replace that item in the current market. Some items require specially skilled labour to reproduce. Others require expenses associated to locating, importing, and/or recovering similar objects, so those costs have to be factored in to ensure you have proper coverage. A crude example would be personal property that needs to be purchased where market conditions include high demand (i.e. lots of competition), sold in stronger currency markets, and due to size or weight involves considerable expense to transport or ship. Writing an appraisal on just the fair market value would leave you exposed when the cost of aquisition sometimes exceeds the actual value of the item.

For only example items, your best bet would be to use fair market value and replacement cost in a report, and simply have the report updated every couple of years. However, in the event that update isn't performed and a loss occurs, it is always recommended you contact the person who originally appraised it as that work file they keep when writing up the report could make a world of difference when an adjuster is looking at grainy photos, or a video that is too dark, and is questioning the authenticity, condition and or even doubting you owned the item. A work file (at least one I prepare) has to be the claimants most solid chain of evidence, and leaves no doubt you are in possession, owned it in the condition you did, and are deserving of every cent it's worth at the market value the time the loss occured.

It isn't as much about holding a crystal ball as it is about making sure insurers aren't underpaying because their policy holder simply doesn't know any better.

Edited June 3, 2017 by comicwiz

[Mighty Hal]

Some great information here, comicwiz. Thanks.

[Twanj]

14 hours ago, malvin said:

I don't know,  But in general, I would think that allowing someone to insure something for higher than the appraised value because that's the value to them and they are willing to pay the premium will lead to trouble.

Haha, yeh I figured, I already have too many friends with big life insurance policies on their wives 

[AnkurJ]

I have a policy with collect insure. They require anything valued over $5000 be declared. Regarding proof of ownership, digital receipts, images etc will suffice.

In the event of a loss, they will use current market data to determine how much will be paid. For example if you have a splash you bought in 2010 for $2000 and now it's worth $8000 based on sales and auctions, that's what they will pay in case of a loss.

[comicwiz]

On 2017-06-03 at 0:01 PM, AnkurJ said:

I have a policy with collect insure. They require anything valued over $5000 be declared. Regarding proof of ownership, digital receipts, images etc will suffice.

In the event of a loss, they will use current market data to determine how much will be paid. For example if you have a splash you bought in 2010 for $2000 and now it's worth $8000 based on sales and auctions, that's what they will pay in case of a loss.

I have been contacted over the last year by several people who were unexpectedly dropped by CIS. One had two claims in a year, nothing of high value. The other had two claims over a two year period, nothing of significant value. Both situations, they got their claim payed out, but were given the boot at renewal. What is unknown is if the underwriters are reviewing their book of business and reviewing incidents where claimaints might have been better served using a different policy, but were trying to save some money (i.e. this claimaint sets up at several shows in a year, had one of the books go missing at one; or claimant does regular online sales, has two claims over items lost or stolen during shipping - neither opted for the higher priced "business plan"). It might also just come down to eliminating risk.

Another fellow was getting beaten up pretty badly over the valuation of an item where he didn't do as good a job compiling evidence to demonstrate the article was genuine and in excellent condition. Unfortunately it was too late to do any of that when it mattered, and I tried to help steer the valuation with what we had to work with. I did not charge anything because I wasn't sure if any of it would help, but it turned out it did. He got full value, and then less than a few months later was notified CIS was cancelling his policy.

If an insurer will offer you coverage amount as per your direction of value, you technically wouldn't really need an appraisal.

 

However, the only issue that might arise in the event of a loss claim is that without an impartial third-party appraisal, the adjuster would have no requirement to satisfy your perceived value claim, and opens the door for them to cherry pick a data point with little to no context in an effort to pay out the least possible amount.

 

For declared items over $5000, it would be wise to take good photographs of what you have, to leave no reasonable doubt on condition and/or authenticity. It's also important to frequently monitor the market for any sales, log them, and be sure to note all differences/similarities as this will be your context in the event you need to defend your valuation position. None of this guarantees you won't come up against a situation where an adjuster refuses to budge, but it will strengthen your position to ensure the research they've done has merit and matches your own.

 

Even in the event of a positive outcome of the insurer paying out a loss claim, insurers who don't require an appraisal on items over $5000 demonstrate a higher pattern to suspend or cancel coverage.

Edited June 6, 2017 by comicwiz

[AnkurJ]

From what I've seen, most insurance plans will drop you after a certain number of claims. Collect Insure told me after 3 claims you'll be dropped.

[Mr. Machismo]

Thank you SO much, comicwiz for this great info.
 

Quote

“If the policy isn't written using replacement cost coverage, it isn't going to protect you in the event of a loss.”

Say I paid $5000 for an A-level piece of art and have replacement cost coverage as well as the original receipt. The adjuster finds other C-level pages from that comic that sold at auction for $1500. Will I be paid $5000 or $1500?

Quote

For only example items, your best bet would be to use fair market value and replacement cost in a report, and simply have the report updated every couple of years.

How would you have the report updated every couple of years? Do you mean, keeping records of similar prices sold at auction, etc. in personal files – or sending something to the insurance broker, or...?

 

 

[comicwiz]

3 hours ago, Mr. Machismo said:

Say I paid $5000 for an A-level piece of art and have replacement cost coverage as well as the original receipt. The adjuster finds other C-level pages from that comic that sold at auction for $1500. Will I be paid $5000 or $1500?

The receipt should be a last resort. With OA, some of the aspects that matter are the condition of the page, characters appearing on the page, the artists/writers, significance of the page in the chronology of the title/series, and overall eye appeal.  If a report is drawn up providing a replacement cost coverage, it would be backed-up with comparables research and information pointing to market conditions that would be irrefutable. That is all kept in the appraisers work file, and is used to defend the appraisers direction of value. Now in a hypothetical situation where the replacement cost value assigned by the appraiser is $5000, I can't say an appraiser won't try to cherry-pick the $1500 or choose a comparable on a page which matches the same artist but doesn't show the main character even once on the page, and believes that is the right match for a lost splash page. However if the appraisal was done right, and the work file is rock solid, they're paying the appraisers direction of value.  Most of the out to lunch tactics tried by adjusters could be remedied very easily with a simple phone call to your appraiser explaining the offer you recieved doesn't jive with the appraisal.

[comicwiz]

4 hours ago, Mr. Machismo said:

How would you have the report updated every couple of years? Do you mean, keeping records of similar prices sold at auction, etc. in personal files – or sending something to the insurance broker, or...?

If you have a proper appraisal, I'd say once every 3-5 years would be a good idea as far as updating is concerned. Maybe on the lower range if you notice market conditions where the value of the piece has increased by double-digit percentages. For those who have an appraisal report drawn up (I highly recommend by someone accredited) at the request of their insurer, then you've got your bases covered.

The idea of keeping records of selling activity on similar pieces is always a good one to help pattern market performance and growth, but I am mostly suggesting this approach for people who are with insurers offering them coverage without an appraisal. These are the cases that could benefit most from collecting this information to help defend their valuation opinion against an adjuster with different ideas on what the piece is worth.

Edited June 6, 2017 by comicwiz