Why You Need To Insure Wine And Store Wine Properly
Imagine waking up in the middle of the night during an earthquake to find that your entire wine cellar was destroyed. Natural disasters are rare but they do happen, and they’re nearly impossible to predict.
Or maybe something more common occurs like a pipe burst because of freezing. If you don't have your pipes protected from cold weather by a company like the one in this website here, you are putting your valuable wine collection at risk.
You pay top dollar for your wine, so you should be just as particular about protecting it. Whether you have a few fine vintages or a stockpile of the world’s best wines you should think about insurance. The number one reason to consider insurance is if you keep a wine cellar at home, but there are other reasons, too. Here’s a quick guide to finding insurance and storing wines so that they are as protected as possible.
How Do You Insure Wine
Purchasing insurance for your wine can be tricky because there are several ways you can do it. Choosing the wine insurance policy that best matches your personal collection is a crucial decision. It can be daunting, as well. Should you choose a homeowner’s rider or a blanket policy? How much should you insure your collection for? These are the critical questions you’ll need to answer before making a final decision. Here is an overview of your top options and some links to additional information.
Homeowner’s Insurance Riders
One common type of insurance you can purchase for your wine collection is a homeowner’s insurance rider. They’re designed to cover a small wine collection against loss. There are a few downsides to these wine insurance policies.
- You typically end up with a high deductible amount. Often, your rider will include a deductible amount of $1,000 or more. That is $1k out of your pocket before the insurance coverage kicks in. Is your wine collection worth $1,000 or less? Make sure you negotiate for an appropriate deductible based on the total value of the wine you own.
- These policies will often exclude certain types of losses. These could be due to earthquakes, heat damage, etc. Make sure you thoroughly review the "exclusions" before you sign up.
If your collection is worth substantially more than the deductible, it’s usually well worth paying more every month on your homeowner’s policy. Then, in the event that your entire collection is destroyed in a natural disaster or similar incident, your wine collection is covered.
For instance, if your collection is worth $5,000 and you lose every bottle you own in a massive flood, it's possible that your insurance could pay around $4,000 in damages and all you would lose is your $1,000 deductible.
As with all insurance, you should work with a licensed agent or broker to make sure you have the correct coverage. They can point out where the gaps in your wine insurance are and suggest the best solutions.
Blanket Wine Insurance Policies
Another solution is to buy a blanket wine insurance policy. If your wine collection is worth $10,000 or less, but you want more coverage than a home owner's policy rider can offer, a blanket policy is the best way to go.
If you decide to go this route, the insurance company will arrange to have an insurance appraiser visit your home to determine the true market value of your collection. Then, an actuary will tell you how much your policy will cover. The next step is crucial to make sure you have the proper wine insurance. You must negotiate the scenarios under which you want to have coverage. When all of that is done, you’ll settle on a flat monthly fee.
If anything happens to any bottle in your collection (so long as the loss type is covered), your blanket policy will cover the damage up to the maximum specified amount.
Need to move your wine collection? Make sure you contact your insurance agent and discuss what is covered. They make have specific requirements for the moving company. Make sure you vet the movers and see if they have experience handling high-end wine. A company with a national scope like Bekins (learn more) may be the best place to start.
Bottle-by-Bottle Wine Insurance
Many insurance companies who will only cover your wine collection up to a specified dollar amount. This can become complicated for wine lovers with collections that can run into the hundreds of thousands.
These types of collections usually feature some extremely rare and valuable bottles. In this scenario, it is essential to explicitly cover your most valuable wines. We want to make sure our magnum of Screaming Eagle is covered. It's best to have that clearly spelled out in the policy!
So why not insure the whole wine collection? Because it can make more fiscal sense to spend money insuring your 100 most valuable vintages than it does to spend exponentially more covering your entire 10,000 bottle collection.
Additionally, you can customize bottle-by-bottle coverage to a much higher level than coverage that protects an entire collection. Why? Because you’re taking the basic market worth of your wine into consideration, but you’re factoring in the projected loss that you’d experience should you lose that bottle.
Is There A Standard Rate For Wine Insurance
Wine insurance isn't that expensive. You will typically receive a quote around .50/100 of insurance. This means insurance for a collection of $100,000 will cost you $500 per year. That's a small price to pay for the peace of mind you get having proper coverage.
When you make the decision to purchase wine insurance, make sure you get at least three quotes. You can often save money on your policy by creating a little competition. Make sure the agent is aware you are shopping for the best rate, but you are not looking for watered down coverage terms!
Make Sure These Insurance Protections Are Included
You want your wine insurance policy to be comprehensive. Some policies exclude coverages that are vital to complete coverage. I learned from a local business owner near me about the risks of not understanding the exclusions in an insurance policy. Ask the agent to list out any exclusions to coverage. Request that they explain any exclusions you are unclear about. Ideally, your coverage will include damages due to extremes of temperature, vehicle or mechanical breakdown.
Also, consider transportation when purchasing coverage for your wine. Damage can occur between storage facilities, wineries, and your home.
Information You Will Need For A Wine Insurance Quote
After researching your options you will request a wine insurance quote. You should be prepared to answer these question about your collection and the place where it is stored:
- Total value of your wine collection
- Number of bottles in your collection
- Is your wine stored in a residence or commercial building?
- Does the storage facility or home have a backup generator?
- Is a temperature monitoring system used?
- Does your storage location have a centrally monitored burglar and fire alarms?
- Is the wine storage location within 5 miles of a fire station?
- Have you had any wine-related insurance claims in the last 5 years?
Have this information handy. It will make the quote process much faster.
Wine Insurance Q & A With Wine Insurance Broker
Is my wine covered by my homeowner's insurance?
A typical homeowner’s policy will offer little or no coverage for what is considered “consumable goods” leaving wine collection assets at risk. There are no standard homeowner’s policies, which is why it’s important to consult your insurance agent to learn about the different types of coverages to adequately protect the full value of your investment.
Asking the right questions is extremely important to determine if a certain program or coverage aligns with your needs. What is important to you? Breakage, shipping, catastrophe loss? Be sure to ask about protection for shipping, breakage, extreme temperature or storage for multiple locations. You invested energy, financial resources, and passion building a flavorful collection, now it’s time to protect it.
If not, how do I get it added?
Protection for your wine collection should be insured similarly as fine art, jewelry or classic car collection, with a personal articles floater or specialty stand-alone policy. You’ll want to consult your insurance agent as to what programs are available and align with your specific needs. Typically, you’ll need to know the full value of your collection to determine how much coverage is necessary, manage an up-to-date inventory list and review specialized wine cooling units to keep your collection at proper temperatures and humidity levels.
When I order wine from a winery or online wine club, is my wine insured?
Generally, this type of coverage is not a part of a homeowner’s policy, but you’ll want to consult your insurance agent to double-check. There are several benefits of a specialty program, and I’ll use Bluewater as an example. Our program specifically protects cases or individual bottles during shipping from wineries, online wine clubs and auctions. These activities are very common among the wine collector community.
How can I protect my wine collection against damage/losses?
This is a common question, especially after the 2014 Napa earthquakes. We express the importance of three precautions when mitigating risk for wine collection assets. 1. Maintain a detailed inventory list of your collection. 2. Secure your current racks to the wall and position the bottles with the punt facing inward on a downward slant. If you’re designing your wine cellar, ask and install angled wine racks. For extra precaution, install rubber pads on the rack to minimize vibrations, add doors, cages or mesh lining on the front of the racks and use O-rings that slip around the neck of the bottle. For cases, stack no more than two high and six inches off the ground. 3. Install a dedicated specialized wine cooling unit separate from your air conditioning system.
Are there specific policies that cover wine collections? What are a few of the advantages of these policies?
Yes, there are specialty programs designed for the wine collector. The main advantage of a specialty program is protection for the full value of your wine collection assets, which include individual bottles and entire collections. Other advantages include shipping, extreme temperature, breakage, and multiple location protection.
What makes one wine insurance policy better than another?
There are multiple factors of what makes one wine insurance policy better than another. First, you’ll want to make sure coverages align with your specific needs as a collector. Second, understand the company offering the wine insurance policy. Look for core values of experience, expertise, and passion when it comes to your collecting journey.
How To Store Your Wine
There’s nothing you can do about a natural disaster, but there are things you can do that can help ensure the longevity of your wine collection. Make sure you incorporate these important guidelines when you are deciding how to store your wine.
- Never put your wine cellar by walls that are adjacent to laundry rooms, boiler rooms, bathrooms, or any other room that contains water pipes. AIG recently reported that 26% of all wine loss happened because of water damage, so keep your wine away from water as much as possible.
- Don’t store wine where there is a heat sources or sunlight.
- If you live in an area prone to earthquakes make sure your cellar is seismically retrofitted, your racks are secured properly, and you keep a minimum storage height.
- Store all of your bottles at a minimum of eight inches from the ground. This can help you avoid loss due to flooding. Find sturdy wood wine racks that are designed for stability.
- Never keep chemicals, paint, odorous materials, or hazardous substances near your collection.
- If your cellar has any glass walls, windows, or doors they should be airtight and double-paned.
- In order to control humidity, your cellar should include a vapor barrier.
- Don’t cheap out on your cellar cooling system. Invest in a proper cooling system so your wine stays in the best possible condition.
Storing your wine properly is the first key to preventing loss to your wine collection, but even with proper storage, insurance is a must for any serious collector. While losing your prized vintages would be a painful experience no matter what, it would be infinitely worse if you didn’t have wine insurance to make you whole. Make sure you have peace of mind with the right combination of wine storage and wine insurance!