Skip to main content

Check out our 2Q2024 Market Review and Investment Outlook for the remainder of 2024

Close up of businessman throwing dice Gambling concept 1

Insuring Your Valuables Can Be Risky Business

Photo of author, David Wilcox II, CPWA®.
David Wilcox II, CPWA®
Financial Strategist

Whether you consider yourself a collector or not, there are likely things that you own which hold a special place in your heart, items that may also be of considerable monetary value. Is it a special painting handed down through generations of your family history, a classic car with all original parts, or maybe it’s a collection of fine jewels or wine? Whatever the item, one thing is for certain — assuming that your valuables are covered under the terms of a general homeowners insurance policy is risky business.

Here is the dilemma: Most insurance contracts limit or exclude coverage for artwork and collectibles, often placing a $1,000 or lower limit on such valuables. A common practice to add additional coverage is scheduling out specific items that you wish to insure. In most instances, this solves the problem; but let’s consider this example:

You have inherited an antique World War II officer’s pistol from a family member upon their passing. In its current condition, an appraiser values the pistol at $2,000. But after consulting with a military historian, government records prove that the pistol was issued to a decorated war hero who carried the pistol on the beaches of Normandy on D-Day. The historian issues you a letter of his findings and now appraises the pistol at $7,000. The provenance of the item — its historical background — is actually worth more than the item itself!

Now for the $1 million question: If that pistol is lost or stolen, are you (the owner) reimbursed $2,000 for the actual value of the pistol, or $7,000 because of the historical significance of that pistol? It depends!

Generally speaking, if you just have a basic homeowners policy covering that item, you will receive the pistol’s replacement value, or $2,000. However, if you explored the "valuable articles" insurance market and purchased coverage based on the pistol's historical value, you would be reimbursed $7,000.

The key takeaway? In reviewing insurance coverage for your valuables, make sure coverages and policy specifics align with the unique risks that your items face. Consult with a professional insurance agent. As collecting various types of tangible assets has garnered more interest over time, the insurance industry has adapted with tailored solutions for specific types of collectibles. A handful of insurance carriers have begun offering “bespoke coverage” for not only loss and theft, but also asset-specific concerns, such as spoilage of wine and coverage of jewels or artwork that are on loan or lease, just to name a few.

Of course, from a wealth management perspective, valuables and precious items or collections are all important elements of one's portfolio of assets. Although we do not sell insurance, McKinley Carter advisors can help you take the next step if you ever have questions about item valuations and worth.

“If you don’t know, ask. You will be a fool for the moment, but a wise man for the rest of your life.” — Seneca the Younger

Related Insights
NMS Blog Eggs 800px

Large Eggs, Small Eggs: Rising Concentration in Stocks

With all the fun and activity of summer, it can be hard for investors to maintain their concentration. The stock market, though, has been picking up that slack for some time now. Peaking under the hood of the U.S. stock markets, we see them attaining a degree of concentration not seen for many years. This “concentration” refers to the outsized influence that a few stocks have on stock market indices, because of how the indices are put together. Fundamentally, you can think of concentration as the opposite of diversification. While an index may appear diversified on the surface, in reality it may be substantially skewed toward a handful of companies or a particular sector. So how does market concentration work? Learn more.

Read More
Jorge salvador b MV Avgf1 Rd M unsplash DPN blog

Should All-time Highs in the Stock Market Lead You to Diversify into Alternative Investments?

As the U.S. stock market hits new highs in 2024, it begs the question, “Should I diversify some of my stock market risk into non-traditional assets like alternatives?” While the answer varies from person to person, the concept is one worth exploring for many investors.

Alternative investments are financial assets that fall outside the traditional categories of stocks, bonds, and cash. They are often used in investment allocations to diversify portfolios, hedge against risks, and seek higher returns. Learn more about the common types of alternative investments and their characteristics.

Read More
I Stock 1411406485

How to Freeze Your Credit, Benefits of Doing So

Protecting your personal information is more important now than ever before. With the increasing number of data breaches and identity theft cases, it's crucial to take proactive steps to safeguard your credit. One effective way to do this is by freezing your credit. Let's dive deeper into what credit freezing is, how to freeze your credit, and the benefits of taking this precautionary measure.

Read More
Play