Are Clients’ Most-Valued Items Falling Into the Gap?

That teenaged friend of yours who treasured his beer can collection may now be a 40-something man with thousands of dollars invested in beer steins. That doting mother of three who watched her youngest child graduate from college is now a devoted collector with two “second homes” (both dollhouses). That kid who loved to go to Disney World is now an avid collector of animated film prints.

People like these value their collectibles for the pleasure the items bring as well as for what the collections may be worth now and in the future. But they typically don’t realize that their collections are not insured.

Where there are gaps in insurance coverage, there is opportunity for knowledgeable insurance professionals. For collectible owners, here’s one such gap: most homeowners insurance policies do not adequately cover collectibles. And policies that do cover collectibles may pay claims based on actual cash value (depreciated value), not agreed value.

Even if collectibles are covered by a homeowners policy, the normal exclusions apply, such as accidental breakage, flood and earthquake. Also, homeowners policies typically will not insure at a collector market value. Further, a deductible of $500 or more applies to an insured loss. And while it is possible to add a collectibles endorsement to most homeowners policies, several exclusions still may apply.

Huge Collectible Market

Why should agents bother with this market? Because it’s a huge market, and it’s wide. Collectors view their often hard-sought pieces to be among their most valued items. If you approach their collectibles as an important insurance consideration, you are more likely to gain all their business, both personal and commercial.

The Collectors.org directory, the official Web site of the Association of Collecting Clubs and the National Association of Collectors, lists more than 2,500 clubs in the United States. Among the most well known are the Toy Train Operating Society, the Barbie Collectors Club, the Christmas Ornaments Collector Club and the Musical Box Collecting Society. In addition, a number of more unusual clubs have formed and drawn enthusiastic memberships, including the American Credit Card Collectors Society, the Antique Snowmobile Club of America, the Central California Avon Bottle and Collectible Club, as well as the 195-member Yahoo Thimble Group.

Do collectors have devotion? The Precious Moments Collector’s Club shows it. They’re flocking to the Precious Moments 30th anniversary party in 2008 at its “Precious Moments Chapel” in Branson, Mo.

Do collectors have passion? Yes, for just about anything. The average person might not think credit card collectors would have much to discuss or share, but that group apparently would disagree. They hold a well-attended three-day meeting every year.

The Association of Collecting Clubs reports that people are now collecting Arizona tea bottles, clothes hangers, company ties, women’s slips and wire spoons.

Some of the popular collections include figurines, dolls, teddy bears, vintage toys, die cast cars, miniatures, collector plates, holiday collectibles, animation art, sports memorabilia, model railroads, vintage advertising, military items and pottery. We recently insured an antique balls and cups collection for a professional magician. Then there are the collections of glass and porcelain telegraph insulators, antique writing instruments and Civil War memorabilia. And vintage Barbie dolls and Star Wars collectibles are among the more common and popular collections.

Not all collections are insurable, or even valuable. But there are millions of people who need to insure their collections of choice.

Some even claim men represent the future of the collecting market. Collectors under 35 years of age typically are men. “Men tend to exhibit a different pattern in their collecting lives,” noted Pam Danziger of research firm Unity Marketing and author of the book “Why People Buy Things They Don’t Need.”

“They [men] carry their collecting passions right from childhood through early adulthood and then on into maturity, while women tend to delay active collecting until they reach 35 years or so, after the children are out of diapers and in school,” Danziger said. “Men also tend to be more motivated by the thrill of the hunt than women. And they also view their collections as more of an investment.”