Specialty insurance: 3 important points to remember

Collectors have existed for centuries. Throughout, one of their main wishes has remained consistent: protecting the value of their investments.

Art. Jewelry. Exotic cars. Watches. The collectibles business is booming. And while it’s delightful to see market prices rise, the surge is also a reminder that the value of your collection is at risk if you don’t hold enough insurance to cover its loss.

“Values are market-driven,” says Jerry Elliott, vice president and national private client sales director for McGriff, a subsidiary of Truist Insurance Holdings, Inc. “That means people should be valuing their collections on a regular basis with an accredited appraisal source, because you’d hate to be underinsured at a time of loss.”

In the area of specialty insurance, appraisals are one of many important considerations. Elliott works with Truist clients on these types of policies. Here, he advises you on what not to overlook for each area of specialty risk protection.

For collections coverage, don’t overlook when your collection is on the move

When you own fine art, the top risk isn’t theft—it’s what happens when your collection moves from one location to another. Let’s say you want to display a piece at a gallery or at your summer vacation home. You hire a standard moving company to transport the art, but it’s damaged in transit. You may not be covered because your insurance policy requires you to use a professional art mover. The same premise is true for classic cars and other collectibles.

“We worry about things like who’s transporting your artwork,” Elliott says. “You’ve just handed the piece to somebody and it’s in their care, custody, and control. You may or may not be covered, depending on your policy. We would typically want to know that the transport company has been vetted.” That means verifying the mover has insurance and clarifying their limits and conditions.

For personal cyber insurance, don’t overlook prevention

Specialized insurance can help you recover from cybercrimes, but it doesn’t cover every digital breach in your home. That’s why Elliott focuses the cyber insurance conversation on prevention and not just protection.

“We spend more time educating clients on their need to think of their home in the way that they think of their business,” he says. Many business owners employ IT specialists who establish security protocols, install servers, safeguard passwords, ensure effective redundancies, and more. “When they go home, they don’t think the same way.”

Those business owners also have policies for how their employees use company tech. Similarly, a family should understand the do’s and don’ts of online protection at home.

“We have children in the home with friends coming over. Are we giving away our passwords to our friends because they want to get on our Wi-Fi network?” Elliott asks. “Has someone educated us about how we should operate as a family, like the way we operate as a business? In most cases, that answer is no.”

“Cyber thieves have figured out that they can probably breach a personal system easier than they can a corporate system.”

For personal umbrella insurance, don’t overlook the growth of your wealth

An umbrella policy protects you when injury or property damage exceeds the liability limits on your home or auto insurance. If a guest gets hurt at your home’s swimming pool, or if you’re at fault in a car crash with serious injuries, then an umbrella policy may help protect assets that could be targeted in a liability lawsuit. Umbrella insurance can also cover damages that aren’t covered by underlying policies, such as accusations of libel and slander.

But like any insurance policy, its value needs to keep pace with the value and lifestyle of what it’s protecting. The $5 million in protection you purchased in your 30s may need to be more like $50 million in your 50s.

“I can put a number on your house, but I can’t put a number on the lawsuit that a jury might award because of some negligence on your part,” Elliott says. “There’s a social inflation factor that keeps driving up awards from lawsuits, and it has become very significant. So our goal is to work with you to protect your asset base at a level that’s adequate.”