Coin Insurance

Posted by Anastasia


After a certain period of time, every coin collector begins to realize that as their collection continues to grow, not only in volume but value, the need to consider insurance to protect against its potential loss becomes a necessary and prudent concern. Safeguarding a collection that has taken many years of dedicated work to assemble, along with the significant sums of money spent doing so, is not only part of a good investment strategy, but makes real good sense as well. If you currently own a home, there is a reasonably good chance that your current homeowner’s insurance policy will cover such valuables as banknotes, gold and silver bullion, perhaps platinum, medals and medallions, and other precious metals in your possession. The unfortunate side of this particular type of ‘standard’ coverage provided by most insurance companies is that it is a basic type of policy, which sets a certain limitation on the dollar value allowed for claims on coin collections, and is typically around $200. In addition, this figure happens to represent the entire inventory within the collection, and not for each individual coin.

If you are currently in possession of a much larger or more valuable collection than these limitations cover, then it is very important that you consider getting an extended form of insurance coverage for the complete inventory. While most new collectors may find the $200 cap to be adequate for their current needs, as any collection grows, and it probably will, extending the policy coverage to match the corresponding value is part of the long-range strategy as well.

Increasing The Coverage Limit

Should the standard $200 coverage limitation prove to be less than adequate for your needs, then you need to consider extending this limit to ensure a greater level of protection against any uninsured types of losses. This of course will necessitate having to pay much higher premiums, though there will still be exposure to a certain degree of risk. The degree of this risk is because of specific types of exclusions written into the policy, and is present regardless of the increase in the dollar limit one would expect in the higher premium costs. These exclusions also can mean your claim could be denied if your collection, or any substantial part of it, becomes lost, damaged, or even stolen.

Coverage Exclusions in a Policy

In any type of insurance plan or policy coverage, these exclusions will obviously differ from one policy to the next policy, and will greatly depend on each individual insurer, therefore it very important to evaluate the details of the types of coverage and the exclusion listings before making a decision. Some of the more common types of exclusions include normal wear and tear, degrading or deterioration, extreme weather conditions, any damage caused by purposeful means or intent, any loss occurring during transport or shipment including postal services, or any type of theft of the collection if it was left in an unattended vehicle.

The Value of the Coins or Collection

Beyond the coverage exclusions written into your policy, there is the issue of proving the exact value or worth of your collection, not only for your own interests, but for the insurer as well, in the event that filing a claim becomes necessary. Insuring your coins or entire collection at the current market pricing could be problematic if the insurer decides to reduce the settlement amount well below the actual value. This can occur if the insurer happens to value your collection based on a wholesale pricing structure, or they will use a standardized type of pricing model to set the valuations, even in the case of rare coins. Rare coins are especially problematic simply because insurers lack even a standardized example from which to draw a valuation, and therefore any claim settlement could be reduced accordingly.

Collection Insurance Scheduling

Another option to consider when it comes to this type of contingency is to have your collection scheduled, which encompasses having your collection specifically listed within your current homeowner’s insurance policy coverage. To accomplish this, an appraisal of your collection must be done to determine its authentic value, and this is can be accomplished withThe Official Red Book, A Guide Book of United States Coins or The Official Whitman Blue Book of United States Coinsvaluation references, or the American Numismatic Association Grading Guide. Once you reach an agreement on this appraised valuation, the insurer will then add your collection to your insurance policy for the stated value. The primary benefit in the scheduling process is that by determining the real value of your collection before insuring it, the potential for any claim disputes over the collection’s value will be eliminated.

In addition, this scheduling procedure will protect your collection against practically any type of loss. There are certain exclusions, however, such as losses incurred due to natural disasters like flooding or earthquakes, but for a significant majority of collectors this strategy of scheduled insurance should provide more than enough coverage for your needs. One of the disadvantages of this scheduling method is that there is no type of protection against inflationary factors. Insuring your collection at the present market value will not allow for any increase in value over a certain period of time, which means the coverage will only extend to the value at the time the policy was written. Therefore, it will be necessary to get periodic appraisals done, perhaps at least once every year, to ensure your policy’s valuation coverage is up to date.

The Collection Inventory

After collecting coins for a number of years, any serious collector can amass quite a sizable coin assortment. Keeping track of all the coins, the mintage types, sets, and dates can become a challenging and often inconvenient task. Consequently, it is extremely important that you take the necessary time and effort to inventory your entire collection if you plan to insure them.

A coin inventory is just a listing of all the coins in your collection, including all the pertinent and significant details of each coin, such as type, date, grade, metal type, and weight, along with any unique properties or characteristics relative to particular markings or historic value. Another smart method of keeping track of your inventory is to use coin collection software. Along with this, every coin in your collection should be photographed, and the relevant data pertaining to each coin should be included with its corresponding photo in either in a digital or hard-copy layout. This will provide you the means to substantiatefor your insurer exactly what your collection actually contains. Beyond this, a photographic record of your inventory is a perfect way to present your collection to anyone who might enjoy looking at it. You can also post these photos online on coin websites and forums, or send them to fellow enthusiasts via email.

Furthermore, having digital photographs of your collection can be very worthwhile when attempting to determine how much a particular coin is worth. You can forward those images to coin dealers or appraisers all over the globe to get a multitude of opinions on valuation. This type of feedback can be very beneficial in supporting or refuting any valuation disputes with your insurer.

Coverage Premiums and Deductibles

As most everyone is already aware, an insurance deductible is the amount of money that is paid out by the consumer on any claim. Normally, the higher the deductible is, the lower the insurance premiums will be. As a rule, this exposes you to increased levels of risk because you could be paying out added expenses over the course of your claim history. By contrast, the reverse is also true. Making very few or even no claims on your policy can also mean having a higher deductible will save money on your insurance premiums. You can also consider taking out a no-deductible policy, which will obviously mean paying even higher premiums.

Unless you happen to possess a rather large and very valuable coin collection, keeping your deductible at a modest cost level, or at least what you can reasonably budget, is a more financially sound idea. On the other side of the coin, keeping your collection in a secure location, such as a bank vault or a good home safe, or a location that presents a minimal level of risk, then a higher deductible will lower your premiums. The money you save on insurance premiums can certainly be re-invested by adding to your collection, and adding to your collection is exactly the reason why getting a good insurance policy to protect it was such a great idea in the first place.