Why should I insure my wine collection, and if I do, what coverage is best?

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TEAMMichael Carmody, Managing Director

Penne Crews, Vice President

Katlyn Dennis, Vice President

DeAnna Pledger, Assistant Vice President

Christine Bosland, CISR, CPIA, Assistant Vice President

INSURANCE SERVICES EXPERIENCE50 years (combined)

EMAIL [email protected]

WEBSITEnfp.com

NFP Atlanta, GA Charleston, SCPalm Beach Gardens, FL Charlotte, NC

678.393.6330848.881.7787561.443.2000704.412.8020

L E A D I N G I N S U R A N C E A D V I S O R | S O U T H E A S T

I L L U S T R A T I O N B Y K E V I N S P R O U L S

Left to right: Christine Bosland,

Katlyn Dennis, Michael Carmody,

Penne Crews, DeAnna Pledger

Why should I insure my wine collection, and if I do, what coverage is best?B Y N F P

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ny asset that can be damaged or totally destroyed needs insuring. That includes cars, homes and any rare collectible, including wine, col-lections of which can be worth hun-dreds of thousands of dollars. So, before determining the best cover-age for your collection, you need to calculate its value. Then, once a policy is in place, you need to take steps to physically safeguard your collection as well.

Treating wine as an investment began in the late 19th century, and trading in wines remained basically unchanged until the end of the 20th century. In 1999, the creation of the London Inter-national Vintners Exchange (Liv-ex) made it possible to compare investment-grade wines with other asset classes. Liv-ex also helped define what were “investment-grade” wines and their approximate worth.

Less than 1 percent of the global wine market makes the “investment” grade. And to qualify, your collectibles must meet sev-eral criteria, including: the right pedigree, that is, a chateau or domain producer with prestige; longevity, meaning the ability to age for at least a quarter century; a docu-mented history of price appreciation; avail-ability in sufficient quantities to be traded, that is, liquidity in the investment sense; plus excellent reviews by the world’s major wine critics. So it is important to make a careful inventory of your collection. It is also impor-

tant to know that you can insure any of your wines that are not investment grade.

To track the worth of all the items in your collection, you can use software that also pro-vides other information, such as the most de-sirable “drink-by” date. Once you determine your collection’s value, you are ready to select an insurance policy appropriate to your needs. Since homeowners policies infre-quently provide adequate coverage for the value of a collection, and carry a deductible, we recommend a stand-alone collection pol-icy. In the event of a flood or fire, for example, a stand-alone policy will cover damage or loss to the wine collection apart from a home pol-icy payout and rarely charge any deductible.

Collection insurance is available as blan-ket or scheduled coverage. Blanket coverage ascribes an overall value to the collection with a per-item limit. Scheduled insurance covers items within the collection separately. While we recommend a blanket policy, we suggest scheduled insurance for rare items such as bottles we have seen worth $40,000. But you can also have scheduled coverage for any item you choose.

As with most collectibles, the condition of the items in your wine collection affects their worth. To protect your investment, create a

temperature and humidity-controlled envi-ronment with appropriate lighting. Proper humidity levels not only protect cork quality and, in turn, the wine inside the bottle, they preserve labels, as well. Faded or torn labels may dramatically reduce a bottle’s value. Also make sure the wine is secure against theft.

Finally, if you move part or all of your col-lection even a short distance, hire a reputa-ble firm experienced in wine transport. And make certain that the travel environment du-plicates that of your cellar and that the trip will be nonstop; also determine whether there will be subcontractors. Steering clear of subcontractors avoids situations such as your property being offloaded during a trip and exposed to improper storage and pos-sible theft.

We end with what may be a surprise to you and, we think, a pleasant one. The aver-age cost of coverage for a wine collection is $0.40/$100. Put another way, if your collec-tion, with its often irreplaceable items, is worth $100,000, coverage will cost you just $400 to insure it. Per year. l

Insurance services provided through NFP Property & Casualty Insurance, Inc., a subsidiary of NFP Corp. Doing business in California as NFP Property & Casualty Insurance Services, Inc. (Calif. License # 0F15715).

N F P

NFP IS A LEADING INSURANCE BROKER AND CONSULTANT THAT PROVIDES

EMPLOYEE BENEFITS, PROPERTY AND CASUALTY, RETIREMENT AND

INDIVIDUAL INSURANCE AND WEALTH-MANAGEMENT SOLUTIONS

THROUGH OUR LICENSED SUBSIDIARIES AND AFFILIATES. Our Private Client Group

division specializes in personal insurance, ranging from homeowners and automobile

insurance to specialty lines, such as coverage for yachts, aircraft, fine art and antique

cars. NFP has agency appointments with a number of leading insurance markets,

including AIG, Chubb/ACE and PURE. Michael Carmody, senior vice president, is an expert

in the family office and high net worth arenas. Penne Crews, assistant vice president,

has expertise in family offices and personal insurance coverage for professional

athletes, sports memorabilia collections and equine exposures. Katlyn Dennis, vice

president, has years of experience working in private client services and commercial

lines insurance. DeAnna Pledger, assistant vice president, previously serviced

HNW clients at Marsh & McLennan. Christine Bosland, assistant vice president, is

responsible for business development and managing a customer service team. l

A B O U T U S

AIn the event of a flood or fire, a stand-alone policy will cover damage or loss to the wine collection apart from a home policy payout and rarely charge any deductible.

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NFP is featured in Worth® 2017 Leading Wealth Advisors™, a special section in every edition of Worth® magazine. All persons and firms appearing in this section have completed questionnaires, have been vetted by an advisory group following submission by Worth®, and thereafter paid the standard fees to Worth® to be featured in this section. The information contained herein is for informational purposes, and although the list of advisors presented in this section is drawn from sources believed to be reliable and independently reviewed, the accuracy or completeness of this information is not guaranteed. No person or firm listed in this section should be construed as an endorsement by Worth®, and Worth® will not be responsible for the performance, acts or omissions of any such advisor. It should not be assumed that the past performance of any advisors featured in this special section will equal or be an indicator of future performance. Worth®, a publication of the Worth Group LLC, is a financial publisher and does not recommend or endorse investment, legal or tax advisors, investment strategies or particular investments. Those seeking specific investment advice should consider a qualified and licensed investment professional. Worth® is a registered trademark of the Worth Group LLC.

Michael Carmody Managing Director

Penne Crews Vice President

Katlyn Dennis Vice President

DeAnna Pledger Assistant Vice President

Christine Bosland, CISR, CPIA Assistant Vice President

NFPAtlanta, GA

678.393.6330

Charleston, SC848.881.7787

Palm Beach Gardens, FL561.443.2000

Charlotte, NC704.412.8020

[email protected] www.nfp.com

R E P R I N T E D F R O M

®

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