Reviewed by Rena Novotny
Updated September 2, 2022
Wine collections can be immensely valuable. For any wine lover that’s serious about building a collection, it’s a serious investment. And like any investment, it’s important to insure it. Have you considered what might happen if your expensive wine collection is damaged or outright destroyed by an unexpected event?
In this article, we’ll explain how to insure wine collections and the different coverages available.
If you have home insurance, you may have coverage for a loss due to fire or theft, but what if an earthquake smashes your precious bottles? Or, what about a mechanical malfunction or power outage that causes temperature fluctuations, spoiling or freezing your wine collection?
Most home insurance providers will not provide any coverage for loss or damage due to mechanical breakdown. Nor will most cover breakage of fragile items such as bottles of wine. So what can a wine collector do?
You can seek coverage from specialty insurance providers. Some could provide you with a policy that covers spoilage caused by exposure to light, too much or too little humidity, vibration, extremes of temperature and mechanical breakdown. Such policies can be expensive, however, and may be beyond the scope of a home collector.
The good news is that your home insurance policy might cover modest wine collections.
However, if your policy does cover wine, there are certainly limits to that coverage. The wine may fall under your standard personal property (contents) coverage, for example. But, your contents limit of coverage must be adequate to replace all of your furniture, appliances and personal belongings, too. Plus, even if your policy covers certain losses to wine, there is likely a limit on how much will be paid for any one item. If you have dozens or hundreds of valuable bottles, that becomes a problem.
Some policies exclude collectible items of any kind, unless you specifically describe and add those collectibles to your policy. Furthermore, most policies have limitations on coverage for items that are rare or irreplaceable; this means that particularly rare or valuable bottles of particular rarity may be covered for a depreciated value, rather than for their current market value.
To sum up, while some home insurance policies cover wine, they may not adequately cover a full wine collection.
All insurance policies have a standard deductible that will apply to any covered claim that you make.
Earthquake coverage almost always has very high deductible. Even if there is coverage for your smashed bottles after a quake, the deductible may be greater than the overall value of your loss. If you do choose to seek coverage specifically for your wine collection, some insurance providers will let you select a separate deductible for your wine collection.
Wine collection insurance covers bottles on either an individual or a blanket basis.
A blanket basis means that you determine the value of your entire collection, and insure it for that amount. This usually works best if none of the bottles are valued at more than $1,000. If any of your wine bottles are more valuable, you may need to list individual bottles with their values, and insure them separately.
Then, you could insure the less expensive bottles on a blanket basis. You may wish to bring in a wine appraiser to help you come up with a proper valuation. Keep in mind that you’ll need to keep your insurance company updated regularly, as the value will change as you add bottles to your collection, or as you consume, sell or trade them.
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Depending on how your home insurer treats wine collections, you may be able to add your collection as a rider to your policy. Or, you may want to find a specialty company that can issue a separate policy for you, covering just the wine. If you have an extremely expensive collection, a stand-alone policy is probably the route you want to take.
It’s certainly worth exploring the wine collection coverage your home insurance provider can offer, however.
Don’t forget about insuring the wine cellar itself.
If the storage area has been designed especially to store wine at a controlled temperature and level of humidity, it would certainly impact the cost to rebuild your home—as would any major renovation. Your insurer will need to increase the limit on your homeowner’s policy in order to provide the right amount of coverage to rebuild this portion of your home in the event of a loss. If you have a free-standing wine cabinet, it would fall under your contents limit instead.
To be certain you have adequate coverage, make sure to discuss any specialty storage area with your insurance provider.
If you store wine in a basement wine cellar, keep it high enough off the ground to avoid damage should water enter your basement. When wine bottles are submerged in flood water, they often need to be disposed of due to the extremely high risk of contamination. To avoid this heartbreak, keep your wine up off the ground.
As with any personal property, make sure you keep an up-to-date inventory of your wine collection. This will be of great help to your insurer in the event of a claim. It will also help you to know if you have the right amount of coverage at any given time.
Square One is one home insurance provider that can offer coverage for your wine collection.
Wine collections fall under the Fine arts and collectibles category of specialty property. This is an optional coverage that you can add to your policy. When you do, all you need to do is choose a coverage limit high enough to cover your wine collection (plus any other fine arts or collectibles you own). However, any individual items valued over $3,000 will need to be listed on the policy along with an appraisal.
A wine collection can be a valuable investment giving you a great deal of enjoyment, and knowing your investment is properly protected will let you rest easy.
Want to learn more? Visit our Home Insurance Basics resource centre for dozens of helpful articles to guide you through the ins and outs of home insurance. Or, get an online quote in under 5 minutes and find out how affordable personalized home insurance can be.
About the expert: Rena Novotny
Rena's 23-year career started as an independent adjuster where she specialized in complex property, liability and special risk loss. As a branch manager, Rena hired, trained, mentored and coached several adjusters. She continues part-time post-graduate studies in neuro-psychology and traumatization, learning how both may impact the insured's engagement on catastrophic claims. Rena has a MA (Conflict Analysis and Management), CRM, CIP, and holds a level 3 adjusting license.
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