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Article: Why purchase wine insurance coverage for your wine collection?

If you are a wine collector, you likely know that drinking a wine the same night you purchase it sacrifices a great deal of the pleasure in wine. There are a number of reasons for planning your wine purchases, besides having stock on hand. Wine enthusiasts know the rewards of owning a collection: nurturing a bottle for years, anticipating its peak, and, at last, savoring the fruit of the vine. Properly aged vintages can be hard to find, thus the reason why so many collectors prefer to buy younger wines, and keep it until the wine is at its peak.

Most fine wine collectors tend to be immensely proud of their liquid assets. If you are a serious collector, you may see wine as an investment that can be sold at an appreciated value in the future. Or you may see the value in having a far better wine to drink. Either way, you’ve likely spent years, if not decades, building a cellar and searching the world’s wineries for the finest vintages.

When you consider the value contained within the walls of your cellar, surely you’ve wondered, “Should I insure my wine collection? Do I have any coverage under my current homeowner’s policy?”

These are some good questions to consider. Think about it this way: Suppose you are decanting a bottle of Château Lafite-Rothschild, 1982, and your hand slips sending the bottle and its contents, crashing to the floor. Or perhaps you return from vacation to find your state-of-the-art, custom built vault has flooded, destroying several cases or perhaps you notice your cellar has been broken into and several cases are missing.

A homeowner’s policy protects your home and its contents. You may be thinking “wine is content; it should be covered by my homeowner’s policy”.

An average wine drinker’s small wine “stash” may be covered under a homeowner’s policy if they have a claim BUT an avid collector, whose cellar may contain $25,000 to $25 million worth of wine, will not have coverage under their homeowner’s policy. Even specialty markets for high value homes limit wine coverage to $2,500, often times with a deductible and exclusions for flood, windstorm, earthquake, breakage, spoilage and electrical malfunction (i.e. power outages or malfunctioning heating/cooling systems) as well as per bottle dollar limits.

What types of claims could befall a collection? The Chartis Private Client Group compiled data for the cost of wine/cellar related claims. Mechanical breakdown (temperature control) and water damage were the most frequent and costly claims seen, but theft/disappearance and bottle breakage also landed in the top 5. If these types of claims are excluded by your current homeowner’s policy, can you afford to replace all the wines in your collection should they be damaged tomorrow?

If the answer to that question is NO, you should seriously consider purchasing wine coverage, which can be packaged with your existing homeowner’s policy. This coverage can be packaged onto your existing homeowner’s policy in a couple ways: by adding a blanket limit or by itemizing each bottle.

  • If you have a large number of bottles valued under $1000 each, these bottles would be best covered under a blanket limit. This type of coverage insures your collection for a lump-sum value.
  • If your collection includes bottles valued over $1000 each, these bottles would be insured by listing them individually with their values.
  • Most wine collections include bottles with a wide range of values, which would require a specially tailored combination of both coverage’s.

It is also recommended to keep a current inventory of your collection and the original purchase amount of the insured bottles.

Insuring your wine collection will protect your wine, regardless of location, in the event of damage due to fire, theft, earthquake, flood, breakage and spoilage due to mechanical breakdown. If you ever have a claim, some insurance companies will pay up to 150% of the original purchase amount. New acquisitions are immediately covered from the time of purchase and for 90 days, giving you time to add them to your policy. Bottles are also covered while in transit. Companies that insure wine collections even offer a team of collection management professionals, who can help coordinate appraisals and inventories, facilitate packing and transportation and conduct vulnerability assessments on your home.

KRG Insurance Brokers brings expertise and unparalleled service to our high net worth clients, and have been insuring fine homes and their belongings for over 30 years. At KRG we can customize any insurance package for your home, auto, wine or fine art collection. If you would like to learn more about insuring your valuables, call us today and ask to speak with Jennifer James, 416-636- 4544 or 1-888-888-6667.

For more information on Wine Insurance, visit the Wine Insurance Product Page.