The important points
- Wine collections are generally insurable, though they may be considered specialty property with a sublimit imposed on coverage.
- You may be able to insure a wine collection with an endorsement on your home insurance policy, or with a standalone policy.
- With Square One, wine collections fall under the fine arts + collectibles category, and can be covered up to the chosen limit.
Wine insurance basics
If you have home insurance, you may have coverage for a loss due to fire or theft, but what if an earthquake smashes your precious bottles? Or, what about a mechanical malfunction or power outage that causes temperature fluctuations, spoiling or freezing your wine collection?
Most home insurance providers will not provide any coverage for loss or damage due to mechanical breakdown. Nor will most cover breakage of fragile items such as bottles of wine. So what can a wine collector do?
You can seek coverage from specialty insurance providers. Some could provide you with a policy that covers spoilage caused by exposure to light, too much or too little humidity, vibration, extremes of temperature and mechanical breakdown. Such policies can be expensive, however, and may be beyond the scope of a home collector.
The good news is that your home insurance policy might cover modest wine collections.
However, if your policy does cover wine, there are certainly limits to that coverage. The wine may fall under your standard personal property (contents) coverage, for example. But, your contents limit of coverage must be adequate to replace all of your furniture, appliances and personal belongings, too. Plus, even if your policy covers certain losses to wine, there is likely a limit on how much will be paid for any one item. If you have dozens or hundreds of valuable bottles, that becomes a problem.
Some policies exclude collectible items of any kind, unless you specifically describe and add those collectibles to your policy. Furthermore, most policies have limitations on coverage for items that are rare or irreplaceable; this means that particularly rare or valuable bottles of particular rarity may be covered for a depreciated value, rather than for their current market value.
To sum up, while some home insurance policies cover wine, they may not adequately cover a full wine collection.
Deductibles
All insurance policies have a standard deductible that will apply to any covered claim that you make.
Earthquake coverage almost always has very high deductible. Even if there is coverage for your smashed bottles after a quake, the deductible may be greater than the overall value of your loss. If you do choose to seek coverage specifically for your wine collection, some insurance providers will let you select a separate deductible for your wine collection.
Blanket or individual coverage
Wine collection insurance covers bottles on either an individual or a blanket basis.
A blanket basis means that you determine the value of your entire collection, and insure it for that amount. This usually works best if none of the bottles are valued at more than $1,000. If any of your wine bottles are more valuable, you may need to list individual bottles with their values, and insure them separately.
Then, you could insure the less expensive bottles on a blanket basis. You may wish to bring in a wine appraiser to help you come up with a proper valuation. Keep in mind that you’ll need to keep your insurance company updated regularly, as the value will change as you add bottles to your collection, or as you consume, sell or trade them.
