The technical term for the study and appreciation of coins, currency, medals and similar property; is called numismatics; but let's use coin collecting instead. Collecting coins is one of our country's oldest hobbies and it is still quite popular. Coin collecting is particularly interesting because it can involve a hobbyist in geography, culture, history, precious metals, economics, monetary laws, politics and customs on either a national or international basis. It also touches upon the arts and sciences as it involves engraving, designing and even metallurgy.
This hobby has a big impact on insurance coverage,
regardless whether the collector is a tenant or a homeowner. Homeowner
policies typically provide extremely limited coverage for property
which can be used as a medium of exchange. This is especially
true of collectible coins and currency which has a special value
that, typically, far exceeds its face value.
One homeowners program, which represents an industry-wide standard
for homeowners insurance coverage, contains a severe restriction
on the limits available for money. In fact, regardless of the
insurance limit that appears on the policy, the maximum amount
of coverage is limited to less than $300 for any loss which involves
money, including currency and collectible coins.
It would be a losing proposition for insurers
to offer liberal coverage for coin collections and similar property.
Why? Because such property is:
Standard policies recognize the above attributes and are designed
to limit their exposure.
In the case of coin collecting, enthusiasts
are encouraged to seek special protection for their valuable property.
A collector has the option of adding a special endorsement to
their basic homeowner protection or buying a separate policy.
While arranging for coverage, a coin collector must meet three
critical objectives. First, the collector must be able to prove
their possession of the property. Second, the collector must find
a reliable method to carefully document the current value of their
property. Keeping careful and current records is essential to
making sure that a loss is properly covered. A collector should
maintain current inventories of their collection. A written inventory
is good, but it could be backed up by photos or even video documentation.
The collector should also keep independent verification of coin
values such as guides and, when warranted, professional appraisals.
Finally, the collector must be clear about their coverage:
This may seem obvious, but it is very important
to keep your insurer informed about any changes involving your
coin collection. Keep your insurer posted about pieces you no
longer own, new pieces you have acquired and any changes in values.
If values have changed, make sure that you tell your insurer to
adjust your coverage. You can even ask your agent or insurer to
keep current copies of collection values and inventories in their
files.
Collecting coins is a great recreation and it's worth a collector's
time to make sure that their investment in it is properly protected.
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