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Even if you aren’t storing a bottle of ultra high-dollar Chateau Lafite 1869 or Cheval Blanc 1947 in your wine cellar, you likely own some valuable vino that should not only be protected from spoilage but also protected from disasters.
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However, experts estimate that fewer than 5% of wine collections are properly insured. In other words, your wine—and your investment in it—could go down the drain if the bottles accidentally break or somebody steals them during a break-in. The price of leaving your wine collection uninsured could be steep, as one wine industry professional estimates the value of the typical wine collection at $200,000.
Unfortunately, a typical homeowners insurance policy often falls well short of covering a $200,000 wine collection. Why? Because most homeowners insurance policies don’t take into account typical threats to wine bottles, such as destruction caused by floodwaters, power outages that could ruin wine, and breakage that happens when wine is being transported.
Furthermore, the personal property coverage within a standard homeowners insurance policy will likely be inadequate for fully covering an extensive wine collection plus all of your other belongings.
How to Get Wine Insurance
For wine stored at home, you may be able to purchase extra coverage through homeowners insurance. And if you keep your wine at a specialized storage facility, you also might be able to buy separate coverage from the facility.
If you keep your wine at home, consider adding a personal articles floater. This is a way to provide adequate protection for your collection. Insurance experts recommend insuring a collection on a bottle-by-bottle basis through a floater if the wine is worth at least $500 per bottle. You also can purchase a floater that provides overall coverage for a collection with a dollar limit of, say, $25,000.
For more valuable wine collections, investigate speciality wine insurance. You can purchase bottle-by-bottle coverage or blanket coverage. Insurance professionals recommend bottle-by-bottle wine coverage for higher-dollar wine and blanket wine coverage for lower-value wine.
Note an important difference between coverage of wine under a homeowners policy vs. a wine insurance policy: The homeowners policy comes with a deductible if you make a claim, while a wine policy does not.
Once you obtain wine coverage, a policy normally pays claims for incidents like:
Burglary or theft
Misplaced or lost bottles
Accidental breakage, such as when a bottle is being shipped from the seller to your home
Power outage affecting climate-controlled wine storage
Drain or sewer backup
Earthquake or hurricane. In these situations, a special deductible may apply.
Many wine insurers cover your wine when it’s stored in your home, when it’s kept at an off-site storage facility or while it’s being shipped. Insurers refer to this as worldwide all-risk coverage, which takes into account any loss that isn’t listed as being excluded. For instance, all-risk coverage might cover bottles of wine that were broken during an earthquake (unless that’s excluded) or that have somehow disappeared.
Wine insurance isn’t all-encompassing, however.
“You can’t insure against gradual deterioration or damage caused by poor storage conditions. For example, if a bottle of wine is left in the trunk of your car and spoils, there is no coverage. Fading, scratching or tearing of a label also would typically be excluded,” says Laura Doyle, vice president at Chubb, which sells wine insurance.
Keep in mind that if you uncork a bottle of wine and sample even a few sips, coverage is no longer in effect.
Estimating Your Wine Insurance Need
To figure out how much coverage you should buy for your wine collection, you’ll need to get it appraised by a professional appraiser. For insurance purposes, you’ll also need to track how much wine you’ve got on hand by maintaining an up-to-date inventory.
Annual premiums for specialty wine coverage generally range from 40 cents to 80 cents for each $100 worth of wine. So, if you own a wine collection valued at $200,000, your annual premium would be $1,200 if the cost is 60 cents for each $100 worth of wine.
The cost of wine insurance is determined by factors such as:
Size of wine collection.
Location of wine collection.
Exposure to dangers like earthquakes and wildfires.
Management of wine collection, such as safety precautions in place to protect the bottles.
“Wine collectors should seek counsel from a knowledgeable insurance agent or broker who can help them determine the right coverage to meet their unique needs,” Doyle says.
John Egan is a freelance writer, editor and content marketing strategist in Austin, Texas. His work has been published by Experian, Bankrate, National Real Estate Investor, U.S. News & World Report, Urban Land magazine and other outlets.