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. 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.
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. 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.
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.
- 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!