Some wine connoisseurs are passionate about collecting wine from a particular region and vintage, some have collections of a few rare bottles, while others have extensive wine cellars filled with investment-grade wine. No matter the size of the collection, wine is a passion collectible. The only thing that equals the excitement of procuring a bottle of a sought-after vintage, is experiencing that first sip. Like any collectible, wine is an investment, and wine collections should be protected by custom wine collection insurance.
Wine Values Increasing
Not only has private wine collecting grown in popularity, but also the global wine market has seen steady growth year after year. Statista dot com reports that the global wine market valued at 354.7 billion in 2018, is projected to grow 21 percent by 2023 to a value over 429 billion. (1) And, according to the International Organisation of Vine and Wine (OIV) the U.S. remains the biggest wine market in the world. (2)
The value of a particular bottle varies widely depending upon factors such as: the wine’s maturity, scarcity, the pedigree of the winery, and the demand for the vintage. Highly sought-after wines may cost as little as $100 per bottle early in their lives… and “can fetch many hundreds or thousands of dollars per bottle as they approach and reach maturity.” (3)
In the last thirty years, wine collecting has become a legitimate investment opportunity for hobbyists looking to turn their passion into profit and also for investors looking for ways to diversify their portfolios. As with any asset, wine collections need to be properly insured and protected.
Going Without Wine Collection Insurance
The increasing popularity of wine collecting for investment purposes, is disproportionate to the number of collectors safeguarding their investment. The amount of un-protected private wine collections is staggering, especially considering the significant risk involved with foregoing insurance.
Certified sommelier and Founder of Enotrias Elite Sommelier Services, Melissa Smith says, “the wine collections owned by her clients generally range from $30,000 to several million dollars in value. However, only a handful of her clients have carried wine collection insurance prior to her working with them. (4) An article posted on Nov 24, 2018 on Forbes.com, echoes Smith’s remarks citing:
“On average, the value of the wine cellars of self-described wine connoisseurs is between $50,000 and $100,000. The total value of collectible wines and spirits in private hands has been estimated to be between $5 and $10 billion. Less than 10% of those collections are insured.”(5)
Is My Wine Collection Protected By My Homeowners’ Insurance?
What is the reason why such a small percentage of wine collectors purchase insurance for their collections? The consensus is that wine connoisseurs mistakenly assume their collections are protected by their home insurance policy. However, most homeowners’ insurance policies have limitations with regard to collections of wine, jewelry, fine art, and other valuable collections. Most homeowners’ policies will not cover the common threats to collections of wine such as:
- power outage resulting in spoilage,
- mechanical breakdown affecting heating, cooling and humidity control,
- flood damage, or
- breakage during shipment.
How Do You Insurance a Wine Collection?
McSweeney & Ricci recommends protecting your wine collection and other valuables with a dedicated valuable collections insurance policy. Your wine collection can be insured along with any other valuable collections of jewelry, artwork, memorabilia or antiques on a customized collections and valuable items policy. Wine collection insurance can be purchased as blanket coverage or per bottle (itemized) coverage.
Blanket coverage is preferred for lower-value collections and offers an overall coverage limit. Blanket coverage is recommended for collectors who plan to drink the wine they’ve purchased. Blanket coverage allows collectors to add or subtract bottles without informing your insurer each time. Your insurer would need to be contacted if the value of a new bottle increases the collection’s value to the extent that it exceeds the coverage limits.
Bottle-By-Bottle or Itemized Coverage is preferred for larger collections of more valuable bottles. With itemized coverage each bottle is listed and individually insured for a specific value. Itemized wine collection insurance is recommended for wine connoisseurs who plan on keeping their bottles for the long-term.
What Risks are Covered By Wine Collection Insurance?
- Burglary or Theft
- Lost or misplaced bottles
- Damage resulting from a flood or a fire
- Accidental breakage that occurs during transport, such as from a winery to your home, or from a winery to a storage facility.
- Spoilage or damage caused by mechanical breakdown or power outage
- Damage resulting from earthquake or hurricane* (a special deductible may need to be added)
- Damage caused by a sewer or drain backup and more!
Is Wine Collection Insurance Expensive?
Protecting your wine collection is easier and more affordable than you may think. In fact, Laura Doyle, vice president at Chubb Insurance says, “a personal wine collection valued at $100,000 would cost $400 to $600 a year to insure.” (4) A McSweeney & Ricci Private Client Group Personal Risk Manager can advise you of the proper amount and type of wine collection insurance suited to your particular collection and will work within your budget.
Why Contact McSweeney & Ricci’s Private Client Group to Protect My Wine Collection?
Our Private Client Group allows access to select insurers Chubb, Pure, Cincinnati and Berkley One, who offer premium wine collection insurance, with flexible, worldwide coverage. Our team will advise you on how to minimize risk of breakage, spoilage, and theft and will help preserve the value of your treasured collection.
Accomplished individuals with a passion for collecting wine need to properly protect their investment with wine collection insurance. McSweeney & Ricci’s Private Client Group specializes in providing successful individuals and families with customized insurance coverage including high value home insurance, auto insurance, watercraft and boat insurance, wine collection and valuable items insurance and much more.
For more information on protecting your wine collection with wine collection insurance through our Private Client Group contact (844) 501-1361 or request a complimentary insurance quote.
The risk professionals in McSweeney & Ricci’s Private Client Group have over fifty years experience providing custom insurance programs to clients from the south shore of Massachusetts, Boston and the New England states, to Florida and across the U.S.. Our team will offer advice and help you select coverage suited to your individual risk profile and lifestyle. Our Private Client Group specializes in providing insurance protection to high net worth individuals and families and will craft a custom insurance program to keep you protected.
Sources:
- Statista.com “Revenue of the Wine Market Worldwide by Country in 2018”
- Wine Institute.org “California Wine Sales Rach $43.6 Billion in U.S. Market in 2019”
- MoneyCrashers.com “Collecting & Investing in Wine-Costs, Risk, How to Buy” by Brian Martucci
- Forbes.com “Uncorking the Basics of Wine Insurance” 11/02/20. by John Egan and Amy Danise
- Forbes.com “Is Your Wine Collection Insured? Probably Not!” 11/24/2018 by Joseph V. Micallef
- Chubb.com “A Guide to Insuring Your Wine Collection”