Where do I go for an appraisal for insurance reasons? 3 3

[NoMan]

1 hour ago, Upgrayedd2 said:

Yes, hypothetically you can insure Dazzler #9 for a million dollars and proceed to pay the premium. However, when your Dazzler disappears, the insurance company will pay you the replacement cost. 

Done! 👻

[comicwiz]

On 6/14/2021 at 4:09 PM, NoMan said:

Earth to Comicwiz!

Not sure why I wasn't notified as it looks like @Scroogetried to tag me, but PM me if you still need help with this. I just happened to be reading this thread and saw the post now. I'm accredited through the Canadian Personal Property and Appraisers Group (link to my online profile is in my sig), and very likely your insurer will want a report certified by an accredited and impartial third-party. That said, I will need to know more about your appraisal requirements to be able to assist.

Edited June 27, 2021 by comicwiz

[comicwiz]

9 hours ago, Upgrayedd2 said:

Yes, hypothetically you can insure Dazzler #9 for a million dollars and proceed to pay the premium. However, when your Dazzler disappears, the insurance company will pay you the replacement cost. 

I would add that it highly depends on your insurer and what back-up you have to prove ownership, and condition. I know a lot of people have endorsed CIS here, but I'd also caution anyone looking to get proper coverage to acclimatize to bubble valuations, and the real potential for averaging to be factored in from the prior year. Insurers historically are adverse to paying out on items far beyond their perceived value, especially in markets where there is a fact pattern of them typically falling rapidly or dramatically when the bubble bursts.

[Upgrayedd2]

On 6/27/2021 at 1:28 AM, comicwiz said:

I would add that it highly depends on your insurer and what back-up you have to prove ownership, and condition. I know a lot of people have endorsed CIS here, but I'd also caution anyone looking to get proper coverage to acclimatize to bubble valuations, and the real potential for averaging to be factored in from the prior year. Insurers historically are adverse to paying out on items far beyond their perceived value, especially in markets where there is a fact pattern of them typically falling rapidly or dramatically when the bubble bursts.

I hope it was understood the "replacement cost" is how much the insurance company would pay to replace Dazzler #9. For this example, let us assume the insurance company accepted your claim of $1M. If you filed a claim to replace your Dazzler #9, the insurance company determines the replacement costs, not on what you insured if for, but recent sales of the issue - somewhere in the neighborhood of $4.99 (add another $50 if you had it slabbed). So you would receive that amount ($4.99) while you paid out an insurance premium in the neighborhood $4,000/year for a million dollar policy. And let us next assume Dazzler #9 was worth 1.2M at the time of the claim. The insurance would reimburse you only $1M, because that was the maximum you insured it for.

As CWiz points out, if there is significant drop (or increase) in comic book values, you should adjust the insurance amount accordingly.

I've increased my policy amount by 40% since last year to keep up with the crazy prices. When things change, I will adjust my policy to match.

Edited July 9, 2021 by Upgrayedd2
Added Info

[NoMan]

Thanks. I hired a cat to appraise the book since prices are getting all stupid and will adjust the policy as needed. It’s worth way more now. 

[comicwiz]

11 hours ago, Upgrayedd2 said:

I hope it was understood the "replacement cost" is how much the insurance company would pay to replace Dazzler #9. For this example, let us assume the insurance company accepted your claim of $1M. If you filed a claim to replace your Dazzler #9, the insurance company determines the replacement costs, not on what you insured if for, but recent sales of the issue - somewhere in the neighborhood of $4.99 (add another $50 if you had it slabbed). So you would receive that amount ($4.99) while you paid out an insurance premium in the neighborhood $4,000/year for a million dollar policy. And let us next assume Dazzler #9 was worth 1.2M at the time of the claim. The insurance would reimburse you only $1M, because that was the maximum you insured it for.

As CWiz points out, if there is significant drop (or increase) in comic book values, you should adjust the insurance amount accordingly.

Yes, replacement cost coverage is the type most capable of covering a loss at the time it occurs, this is what collectibles should use, particularly because it is factors in the appreciated value at the moment of the loss.

However one thing to point out is that an adjuster can, and will in many cases, choose comparables in self-serving ways. It's important that the insured is made aware of such instances. More to the point of my "bubble valuation" - if you happen to be buying a comic at the peak market, and let's say you paid $55K, and averaging of multiple comparables brings the value to $33K, you have to understand that there is a possibility the adjuster will recognize that $55K as an outlier, and might only cover you on the $33K. Yes, you can call in that specific outlier and ensure your policy properly covers it, but you must also be aware that your premium will likely increase, and if there isn't a strong case to believe that high sale would repeat (or worse, drops thereafter), that you might well find yourself overpaying for coverage on a sale price that really had no business happening except for the fact that the market is so caught up in a hype cycle, that it is no longer capable of discerning between perceived and real value.

One of the biggest blindspots that has caused this shift in perceived value is feeBay hiding the accepted offer amount on a BIN listing. Up until a few months ago, you were able to still look it up in the code, but now there are very few options available to researchers. As an example, I recently purchased a book that sold on feeBay for $750 in April, and the buyer claimed they now had another book in their sights, and was fine taking a loss on it (I bought it for $600 last week). I felt the market was somewhere around that price, but I had to go through hoops to confirm that it actually sold for that much as it was a BIN listing and wanted to make 100% it didn't sell for less through an accepted offer. In a few words, eBay made it next to impossible to determine this because I was trying to research something that happened over 2 months ago.

When you have an online auction that blurs the values in this manner, it sets everyone up for an uneven playing field, and this distortion of market value is referred to as “information asymmetry,” where either a buyer or seller knows something the other does not. The moment anyone in the field of valuations recognizes one or more facts were not available at the time of a sale, it is no longer recognized as "fair market value." A long, dragged out explanation, but this is one of the most important distinctions to understand the way to discern perceived vs real value, and whoever you hire to do your back-up better know how to tell the two apart, especially in the current market.

Edited July 9, 2021 by comicwiz

[Off Panel]

On 6/26/2021 at 9:35 PM, Upgrayedd2 said:

Yes, hypothetically you can insure Dazzler #9 for a million dollars and proceed to pay the premium. However, when your Dazzler disappears, the insurance company will pay you the replacement cost. 

Plot Twist: Disney+ announces a new show called “Dazzler #9.” Your book is now worth a million dollars.