Reviewed by Rena Novotny
If you’re a wine lover, you may have started a wine collection in your home. Some serious collectors will even set up a wine cellar, complete with automated climate, humidity and light control. Have you considered what might happen if your expensive wine collection is damaged or outright destroyed by an unexpected event?
If you have home insurance, you may have coverage for a loss due to fire or theft, but what if you experience an earthquake that causes your precious bottles to smash on the floor? You could also suffer a mechanical malfunction, or a power outage that causes temperature fluctuations allowing your wine collection to freeze or spoil.
The majority of home insurance providers will not provide any coverage for loss or damage due to mechanical breakdown. Furthermore, breakage of fragile items such as bottles of wine is often excluded. However, you can seek coverage from specialty insurance providers who may be able to 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.
If you don’t go so far as to seek out specialty coverage, don’t just assume that your wine collection will be fully covered, regardless of how much coverage you have for personal property (contents). Your personal property limit of coverage must be adequate to replace all of your furniture, appliances and personal belongings. Even if your policy covers certain losses to wine, there is likely a limit on how much will be paid for any one item.
Some policies will exclude collectible items of any kind, unless specifically described and added to your policy. Furthermore, most policies include limitations on the basis of payment for items that are rare or irreplaceable; this means that bottles of particular rarity may be significantly depreciated, instead of being covered for their current market value.
All policies have a standard deductible that will apply to any covered claim that you make. Earthquake coverage will almost always have a very high deductible, so even if there is coverage for your smashed bottles after a tremor, the deductible may still be much 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 the deductible you want for your wine collection, within a certain range.
You can sometimes insure your wine collection on a “blanket” basis. That just means that you determine the value of your entire collection, and insure to that amount. This usually works best if none of the bottles are valued at more than $1,000. If any of your wine is very 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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You may be able to add your wine collection as a “rider” to your existing home insurance 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 a very expensive collection, a stand-alone policy is probably the route you want to take.
Don’t forget about insuring the wine cellar itself. If the racking or inventory systems are damaged, a specialty company may be able to provide coverage for this. If the storage area has been designed especially to store wine at a controlled temperature and level of humidity, the cost to rebuild your home may have gone up. 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, you’ll need to make sure you have sufficient coverage under your contents limit. To be properly insured, 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. Some websites provide tips on cleaning bottles after a flood, but there is often no guarantee that the wine will be safe to drink.
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.
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.
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