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Whiskey Collection Insurance

In the last couple of years, prices of rare whiskey have skyrocketed. Prices can range between six and seven digits, making it a very valuable asset. If you are a collector or a whiskey hobbyist, insuring your whiskey is recommended.

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About Whiskey Collection Insurance

To protect your whiskey collection, you should consider purchasing whiskey collection insurance, especially if you store your collection in your cellar.

If you own a large, valuable array of whiskey or other spirits, it is wise to insure your collection on a stand-alone valuable articles policy.

You may wish to insure each bottle separately if your collection contains individual high-value whiskey bottles (traditionally called “scheduling”). Scheduling is the more traditional approach to insuring valuable collections, especially when insuring whiskey collections.

Blanket insurance coverage is more of a modern and “catch-all” approach. With it, you have an aggregate amount of coverage, and it is associated with a per-item limit, or in this case, a per bottle limit. Once your aggregate is met, coverage ends. Blanket insurance can be more attractive for consumable whiskies because you don’t necessarily have to notify your broker every time you buy, sell, or enjoy a bottle. As long as you stay within your aggregate and per-item limit, this coverage strategy works.

 

Policy Inclusions

Whiskey insurance policies may include the following:

  • Protection against damages due to fire, theft, accidental breakage, water, climate/temperature, and while in transit.
  • Protection against mechanical breakdowns in the climate control unit that damages whiskey.
  • Protection against label damage in a fire, flood, or other natural disasters. (For many rare, vintage bottles, the label increases the value of the whiskey.)

Storage Recommendations

Whether you house a collection in your home or in a storage facility, consider the following recommendations to reduce damage to your whiskey:

  • Do not store chemicals, paint, or odor-producing materials near your collection. These items can permeate through the cork and spoil the whiskey.
  • Do not store whiskey near heaters or sunlight, or in areas that are susceptible to floods, such as beneath a bathroom or laundry room. Also, avoid placing whiskey in areas of the home that are beneath or next to a home theater, which causes excess vibrations.
  • Whiskey is powerful enough to degrade the cork, so store your bottles right side up.
  • Store wine at 15-20º C. The humidity in whiskey storage should also be about 50 percent to keep the cork in good shape. Anything above or below that amount can damage the label or cork.
  • Install an alarm that warns against theft, temperature changes, and moisture. When selecting an alarm, purchase one that sends a message directly to your mobile device.

Frequently Asked Questions

Does my homeowner’s insurance cover my collection?

No. Most standard homeowner’s contracts do not have special sub limits of coverage for wine or fine spirits.

If I live in a catastrophe prone area, such as Florida or California, am I covered for earthquakes, hurricanes or wildfires?

Each risk is underwritten on an individual basis. Living in a catastrophe-prone area of the country (or world) doesn’t automatically preclude your collection from coverage. However, a special deductible (usually a percentage of the total coverage amount) may apply to special perils of coverage, such as earthquake or “wind” (i.e. hurricane). Regardless, have an evacuation plan in place for your collection before the disaster occurs.

Am I covered for open bottles?

No. Once you open and begin to enjoy a bottle, coverage no longer applies.

Do I need central burglar, fire, and temperature alarms?

Depending upon the size and location of your collection, a centrally monitored burglar/fire/temperature alarm system may be required. Just like any other asset, we recommend you take extra precautions to protect it from loss.

Do I need an appraisal?

Professional appraisals are not always necessary. A detailed itemized list can sometimes suffice. Usually, the larger and more complex the collection, and higher per bottle amounts, periodic appraisals are a good idea to benchmark value and adjust coverage, if necessary.

What if I experience an extended power outage?

We always recommend you have a backup plan in place for a disaster or power outage. Have a generator that can keep climate control in place for several days or weeks. Even if the majority of your collection will be stored at home, consider opening an account with a climate-controlled and secure storage facility. Store a small number of your bottles there with the option to include more if necessary.

How else can the Horton Private Client Group help me?

The Horton Private Client Group is a trusted advisor to successful individuals and families. We analyze risk and recommend personal insurance programs to mitigate the potential of financial loss. We achieve this through discussion, education, and goals-driven risk management solutions with our carrier partners.

Although we certainly can place stand-alone coverage for your wine or fine spirits collection, we also work with sophisticated insurance carriers, such as Chubb, AIG, PURE, Nationwide Private Client, The Cincinnati Insurance Company, and Berkley One to provide tailored solutions for all lines of coverage. This includes, but is not limited to: Homeowners, Condo-owners, Automobile, Excess Liability/Umbrella, Watercraft, Cyber, and many more…

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Jason Haas, Taft-Hartley Expert