The importance of wine insurance
Wine enthusiasts know the rewards of owning a collection: nurturing a bottle for years, anticipating its peak and, at last, savoring the fruit of the vine. Unfortunately, some bottles won’t make it that far. Fragile bottles can break. Basement cellars can flood. Refrigeration systems can malfunction. Although it may be easy to overlook, maintaining adequate insurance coverage is a key component to protect your wine collection.
Even the savviest collectors can make mistakes when it comes to insuring their wine. Here are a few common oversights that can be easily avoided:
• Assuming your collection is protected under your homeowners’ policy. In fact, most homeowners policies specifically exclude coverage for perishables and fragile goods, such as wine.
• Storing your collection in the garage. Petrol and exhaust fumes can permeate the cork, causing spoilage.
• Keeping an outdated inventory.Inaccurate inventories can leave your collection open to theft and undervaluation.
• Not connecting the wine cellar to temperature and moisture alarms. Catching dramatic changes to the cellar conditions can avert a major loss.
• Not hiring a skilled electrician.Most electricians handle basic home wiring. However, when it comes to a temperature-controlled wine cellar, a skilled electrician is needed. Improper wiring can lead to short circuits—causing drastic temperature changes inside the cellar.
Despite your best efforts, power cut, breakage during shipping and other unforeseen circumstances still can occur. For example:
• A lorry transporting wine purchased at auction hit a patch of ice and overturned, smashing most of the bottles inside.
Check with your insurance broker to ensure that newly acquired bottles and/or those in transit are covered.
• An avid wine collector was renovating the expansive cellar in his home. During an on-site vulnerability assessment by his insurer, it was discovered that a mechanism hooked up to the central air conditioning unit was being used to regulate the cellar temperature. If this piece broke, a replacement could take weeks to locate and install—a delay that could potentially ruin his collection.
Only a few select insurers have collection management experts who can spot these unique vulnerabilities and deliver meaningful solutions that may prevent loss.
• Multiple pipes froze in an upstairs bathroom. Pressure from water trying to push ice through the pipes caused them to burst, flooding the home—including the wine cellar. A significant portion of the wine collection was lost.
A water shut-off device hooked to a central alarm system could have prevented this loss from occurring. These systems monitor water flow continuously. If leaks occur in water pipes, plumbing fixtures or water-using appliances, they shut off the water supply automatically and activate an alarm.
Advice for collectors
When it comes to wine, the easiest way to insure a collection is via a “blanket” policy with one overall limit. Blanket coverage is the best choice for the vast majority of collectors—especially if you intend to drink what you acquire over time. This option affords the flexibility to add and remove bottles without having to notify your insurance broker or carrier (unless the value of an individual bottle exceeds the limits on your policy).
Alternatively, if you own high-priced bottles and/or intend to hold onto your collection, a scheduled policy is a better option. With this policy, each bottle is itemized and insured individually.
Article by – Katja Zigerlig
Vice President, Art, Wine & Jewelry Insurance – AIG