The last decade has seen a significant global wine boom. In 2019, the United States led the world with more than $49.5 billion of wine revenue generated—well ahead of the second in line, France, with its $28.1 billion in wine revenue generated.
While most of this spending is on wine that will be consumed within a couple of weeks, the boom has pulled many previously casual consumers of wine into a serious interest in the beverage. Many Americans have joined clubs and receive allocations from California wineries, and many have begun collecting from around the world, building cellars worth tens or hundreds of thousands of dollars or more.
These troves of wine don’t only collect dust. Properly stored and cared for, most bottles improve in complexity and beauty with age. For a noble subset, their market values improve, too.
In addition to money spent, procuring wine, maintaining optimal conditions for it, and waiting years or even decades to enjoy it constitutes a significant investment—and collectors should think like investors. Whether you’re hoping to benefit from market price appreciation or you just want to make sure you can have a better experience than what can be bought at a wine store, you’ve tied up resources and gone to considerable effort to gain a long-term reward.
Yet wines are fragile, and risks accrue as they sit in the cellar.
Until recent years, to insure a wine collection was difficult. Most homeowner’s policies were and still are inadequate to protect a valuable collection, and most carriers haven’t offered dedicated policies for wine.
Wines are difficult to insure because they aren’t only subject to the loss, theft, and other harms typical of valuables, they are also prone to unique perils like damage from too much or too little humidity, damage from heat or temperature fluctuation, harm from vibration or sunlight, bottle breakage or leaking. (If these kinds of harm are not named explicitly in your insurance contract, they are unlikely to be covered.)
Today there are better options for insurance. Specialized products can be tailored to any wine collector’s needs. In general, it makes sense to have such a policy if your collection is valued at $85,000 or more.
As an insured investor, if you ever do experience damage or loss, you’ll have a “hedge.” You’ll receive a payout sufficient to recover and rebuild as much of your collection as possible.
If you’d like to learn more about your options and begin to protect your investment, speak with an expert broker at the forefront of wine insurance, Ken Sidlowski of The Horton Group. You can reach Ken by email or at 708-845-3159.
Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.