Caring for and insuring a wine collection
Commodities prices are rising and falling with each day. Cooper is up, gold is sliding, natural gas is falling and corn’s going up. What about wine?
While perhaps not a true commodity, the value of wine is growing. A recent wine auction in Hong Kong saw collectible wines breaking records. According to Fireman’s Fund Insurance Company, a company of Allianz, a 12-bottle set of 1988 DRC Romanée-Conti recently sold for $117,000.
But whether a wine collection is worth six figures or three, Fireman’s Fund says wine needs to be properly protected to retain its investment value and also its quality.
“If you have a wine collection, or are thinking about building one, here’s how to care for your bottles,” says Don Soss, vice president of high new worth insurance at Fireman’s Fund.
- Be aware of climate control. A temperature of 55 degrees F (12.77 degrees C) with relative humidity between 60 to 65% is ideal for long-term wine storage. A cool temperature slows the aging process and the humidity prevents moisture inside the bottle from moving into the cork. The ideal temperature could vary depending on what kind of wine is being stored.
- Limit light exposure. Dark rooms are ideal for storing wine while fluorescent light can be harmful.
- Keep wines in a stable environment. Vibration can disturb the sediment. Wine bottles should be kept in a horizontal position.
- Back up your power supply. A sustained power outage could put your collection at risk. A back-up generator will protect the investments.
- Consider storage space. Professional wine storage facilities are available in many cities and may be an idea for the collector who doesn’t have enough space or optimal conditions at home.
- Insure your collection separately if it’s valuable. “Depending on the wine’s value, your collection should probably be insured separately from your general homeowner’s insurance policy,” said Soss. “If not, you may run the risk that it is under-insured. The average value of a bottle in a wine cellar is often $100 or more; individual bottles can easily reach $700 to $1,000 for top wines. A cellar that contains, say, 500 to 1,000 bottles can be worth between $50,000 and $100,000. Value can easily climb into the millions for larger collections.”
- Choose blanket coverage or itemized coverage, or a combination. With a Fireman’s Fund policy, a blanket coverage ensures the entire collection is covered under one limit, with a single bottle limit of up to $50,000. Soss recommends itemized overage for wines valued at $10,000 or more.
- Make sure your insurance policies cover all risks. Consider not just direct risks to the wine but theft, fire, breakage, and flood.
- Don’t transport your wine without checking with your insurer first.
- Keep it secure. Consider including your valuable wine collection in your home security system plans.
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