• Melissa L. Smith

Is your Wine Collection Insured?

“Insurance is designed to protect against random, unpredictable events. Inventory management and understanding insurance are key to implementing effective risk management strategies.”

For the last several years I have been giving a seminar on Wine Collecting and the Valuation of Wine Collections to various Bar Associations, Country Clubs, and now with the esteemed San Francisco Wine School. I’ve seen an increase in wine collections lost to natural disasters that are now becoming commonplace in California. Earthquakes, fires, floods, and now power outages that compromise cellar cooling units are all things that a wine collector needs to take into consideration when creating and protecting their cellar.

Or say you’ve had enough with the natural disasters and the rising costs of doing business in California, and you decide to move, and sell your collection, or make the bold move of moving your collection. Any idea how hard it is to find a moving company that will touch wine? We do. Shipping and transporting wine is not covered unless it is specifically noted.

When I meet guests at the restaurant that bring in bottles from their home collections, I always ask, “How do you keep track of inventory?” Nine times out of ten, they point to their head and say, “It’s all up here.” Well, how is that going to work out in the case of a natural disaster, a personal upheaval, theft, or another unexpected occurrence?

Most people assume their home insurance covers their collection. And you know what they say about assumptions. Insuring wine is like insuring fine art, jewlery, or any other valuable collectible. Valuing wine might be difficult, but replacing it may be impossible. Some insurances will write in a “rider” to cover your wine collection, but most won’t touch it.

All too often, the assumption is that wine is automatically covered by home insurance. And all too often, it is not. Most insurance policies are not designed to accommodate the risks or loss settlement challenges a wine collection presents. In preparation for my seminar on Wine Collecting and the Valuation of Wine Collection, I reached out to all of the top home insurance companies. Most didn’t even realise that wine insurance was a thing. That’s when I found Dan Frankel of Insuremywine.com (an Ellis Insurance Agency partner). Completely straight forward wine coverage, backed by a world renowned insurance company.

In a recent article, Frankel wrote:

“Compared to an unendorsed, basic home insurance policy, coverage for wine should: extend worldwide; have a “newly acquired limit” extending to new purchases automatically; cover temperature extremes and mechanical failure; include earthquakes, floods, and hurricanes as covered causes of loss; and provide “All Risk” terms, ensuring that accidents like dropping(!) and breaking a case are covered.”

The first thing that you need to do is have your wine collection meticulously inventoried, including bottle condition, and any proof of provenance that you may have. A spreadsheet is a great place to start. Do this for all of your properties.

Once that is done, you need a professional valuation assigned to the collection. Be sure to note special bottles with higher than average values (DRC, First Growths, large format, etc), these might need a separate rider in some cases.

Present all of this information to the insurance company, ask about added specifics including wine transportation, regular inventories to account for growth and consumption, and fluctuations in valuations.

Enotrias can help with every step, from organizing to inventorying, to assigning a USPAP compliant valuation for you to submit. Maintenance, brokering, and procuring services are also available to get your collection on track for any of your needs.

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