By Wayne Jordan
Life is risky, and everyone is subject to its vagaries. Accidents happen; that’s why we buy insurance.
But rule No. 1 for protecting your property is to know what you have. Insurance companies aren’t going to write you a check on your say-so. If you own specific, valuable items — like your collections — they need to be documented and separately insured. Your homeowner’s policy won’t cover a loss otherwise. Even if your collection is insured for loss by a rider to your homeowner’s policy, any claim will still be subject to the policy’s coverage limits and deductibles.
It’s not my intent to sell insurance; the world is full of agents who are qualified to do that. What I want to address is how to document your collections so that you can insure them against loss. In the process, your documentation will help to establish provenance and value when the day comes that your collection changes hands. That means a collection inventory.
Of course, when you do buy insurance, the agent’s first question to you will be: “What do you have?” So let’s get right down to the business of identifying and cataloging what you have. Along the way, you may decide to inventory the rest of your household goods, as well. Can’t hurt.
First, make detailed entries for each individual item in your collection inventory, and take photos as you do. Then, upload the photos to your computer. After you enter your inventory data into software of some sort, write a description, provenance and value for each item, then attach photos. There are a variety of software programs available for doing this; some are free.
As you conduct your inventory, create a unique identifier for each item. Some collectors choose to create a numbering system. It’s not necessary to number as long as you can remember what you called each item to allow for a database search). Be sure to give the items specific names. Write down the pertinent specifics of the each item: size, weight, material, manufacturer, pattern, age, condition, provenance, when you bought it and anything else that might be relevant.
Photograph each item as if you intended to sell it on eBay. Shoot from several angles, and be sure to get a shot of any identifying marks. In the case of records, be sure to photograph the front and back cover, the records and the labels, as well as any inserts. As you take photographs, note the photo number on the inventory list so you don’t confuse your photos when you do the data entry.
Next, sit down at your computer and compile the information. You can create your own database from scratch using Excel, Filemaker or a variety of other program. You can also download free home inventory software from many insurance companies’ websites, as well as The Insurance Information Institute at https://www.knowyourstuff.org/iii/login.html.
Or, you can purchase collector-specific software, like CollectorPro (http://collectorpro.com/), Collectify (http://www.collectify.com/) or Liberty Street (http://www.libertystreet.com/), which can run as much as $300.
There are options available to help you inventory your collections. The Know Your Stuff Home Inventory is one of them.
Next, you’ll need to know the value of each individual item in your collection. You probably know what you paid for the items, but what you paid for them may not be today’s market value. You know how it is; what’s hot this week may not be so hot next year.
If you’re unsure of the value or can’t remember what you paid, start doing your research. Goldmine offers record pricing and identification guides, the most current of which are “Standard Catalog of American Records, 8th Edition” and “Goldmine Record Album Price Guide, 7th Edition.
You also can search eBay’s sold listings to get a gauge of prices for comparable items. Take screenshots of the pricing and condition information you find for those comparables, and make them part of your database. You can also seek out knowledgeable dealers or appraisers to get a bead on what your items are worth.
If you’re inventorying for insurance purposes, the value you enter will depend upon the type of policy you’re buying. For antiques and collectibles, the most common policies bought are either an Agreed Value policy, in which you agree with the insurance company beforehand what the loss settlement payment will be; or an Actual Cash Value policy, in which you tell the insurer what your items are worth and you make premium payments based on that amount. If there is a loss, the insurance company will ask for an appraisal based on your records and pay out according to the appraisal. This is why attention to detail is so important as you inventory your collection.
Sure, this is a lot of work. But, you have a lot of time and money invested in your collection.
Consider the case of a shipper whose porcelain collection was destroyed after the van line tractor-trailer transporting it flipped over and rolled down an embankment. Although she had valued her collection in the mid-five figures, her settlement from the van line for the entire collection was a mere $16.74. In an effort to save money on the moving cost, she packed the porcelain herself (which relieved the van line of responsibility for breakage of packed items) and didn’t insure the shipment. The van line was only liable for the “released rate” for interstate shipping: 6 cents per pound. A 3-pound Lladro figure valued at $3,000 was settled for 18 cents. Although it’s heartbreaking to hear, it is completely legal according to shipping statues.
The shipper in my story lost close to $50,000 because she didn’t take the time to protect her investment. Are you willing to risk that kind of loss? GM
Wayne Jordan is a Virginia licensed auctioneer, certified personal property appraiser, and accredited business broker. He specializes in the valuation and liquidation of estate and business assets. Learn more at www.waynejordanauctions.com, 276-730-5197 or firstname.lastname@example.org.