Wine insurance: What is it and what does it cover?

Wine insurance - wine rack
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Though most people don’t need this type of coverage, collectors should consider protecting their collections.

Most of us uncork a decent bottle of red or white without any need to consider wine insurance. We spend $10 to $15 on a nice bottle and enjoy our purchase. However, collectors who have accumulated thousands of dollars worth of bottles could benefit from this additional coverage.

Serious collectors could have collections – or even individual bottles – worth thousands.

Storage facilities and logistics companies focused on this industry believe that less than 5 percent of collections are covered by wine insurance, according to Ellis Insurance Agency principal Dan Frankel, who was cited in a Forbes report. Coverage provider Bouchard Insurance, places this estimate closer to 10 percent of serious collectors. That said, regardless of the specific proportion of collectors, those who have skipped purchasing coverage could face substantial risks if anything unexpected should happen. This is especially true because Frankel estimates that the average value of a collection is around $200,000.

Enotrias Elite Sommelier Services founder, Melissa Smith, a certified sommelier, appraises and inventories bottles for coverage purposes. According to Smith, her clients’ collections typically range in value from around $30,000 to several millions. However, she has noticed that over the last ten years, only a very small number were carrying coverage before she started work with them.

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Many collectors don’t recognize the importance of wine insurance until it is recommended to them.

“I think they start collecting and then get overwhelmed with the idea of inventorying and then figuring out its worth, and never get around to buying wine insurance,” said Smith.

Among the primary reasons that collectors don’t realize the importance of specific coverage for their collections is that they assume that homeowners’ insurance will provide them with adequate coverage, said Smith. However, the majority of standard home policies will not cover the types of threats that could affect wines, such as flood damage, power outages that could allow the bottles to spoil, breakage during shipment, or mechanical breakdowns affecting cooling, heating or humidity systems.

If the bottles are stored at a storage facility specifically meant for keeping high value Wine insurance - wine rackcollections, wine insurance is often offered for an additional fee. Purchasing extra coverage will almost always be required if the bottles are stored at home.

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