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Posted on OCT 22, 2018

The Case for Wine Insurance

Do you appreciate a good glass of wine? Whether you're a hobbyist, investor or novice just beginning to build your collection, wine insurance can provide cost-effective peace of mind. Without it, dropping that precious bottle of Screaming Eagle Cabernet or Château Margaux could result in a multi‐thousand dollar puddle at your feet. Even if your tastes run to less astronomical vintages, the value of your cellar could add up quickly.

“Wine is something you can see, taste and appreciate,” says Tim McGuire, Vice President – Personal Insurance Sales Executive, Johnson Financial Group. “If you've spent serious time and money collecting wine, it makes sense to protect your investment just as you would an antique car or art collection.”

Homeowners insurance is not enough

Although your homeowners contract may provide coverage in certain circumstances, it's inadequate when it comes to insuring a wine collection.

“For example, your homeowners policy may cover loss of wine in case of fire, theft or breakage in limited circumstances, but it generally doesn't cover additional perils, such as dropping an individual bottle or spoilage from temperature changes,” McGuire explains.

Wine insurance offers:

  • Affordability. Often just 50 cents per $100 of value. Insuring a $100,000 collection could cost as little as $500 a year.
  • Flexibility. You may choose to protect one or a few investment-grade bottles, only the bottles or cases you expect to appreciate, or an entire collection.
  • No deductible. “If you break a $900 bottle of wine and your homeowners insurance has a $1,000 deductible, you're out of luck,” McGuire explains. “Wine insurance typically covers the full cost.”
  • Full replacement value. The full replacement value of items of “rarity and antiquity” is generally excluded from a standard homeowners policy. “Wine insurance generally covers appreciated bottles and even rare wines at the current market value,” McGuire says.

Caring for your wine collection

Avoid these common hazards:

Breakage. It may sound obvious, but be sure your wine shelves are strong enough to hold your collection. Store wine well away from appliances that generate vibrations, which can also affect how the wine ages.

Spoilage. Store wine on its side in a temperature- and humidity‐controlled cellar or insulated wine cabinet, generally between 45 and 65 degrees Fahrenheit. Humidity should be between 50 and 80 percent to keep corks from drying out (on the low end) or molding (on the high end). Keep wine away from light and heat sources.

Sewer or drain backup. If you store wine in the basement where a sewer or drain backup is possible, storing the wine up and off the floor may help.

Theft. Use common‐sense precautions, such as limiting access to your cellar and not calling attention to the value of your collection.

Natural disasters. These may not be avoidable. If they occur, damage by flooding and earthquakes is generally is covered by wine insurance.

Getting started

You don't need a collection in the tens of thousands to justify wine insurance. If you're concerned about losing what you've accumulated, that's enough to look into coverage. Before talking to an agent:

  • Take inventory. Include the number of bottles and total value of the collection. Generally, an estimate of the wine's value is enough. “However, for extensive collections, an insurer may require an appraisal and an inspection to evaluate storage conditions,” McGuire says.
  • Create an adequate storage environment. If you don't have a suitable area at home, you may want to consider renting a wine storage unit, available through some wine merchants. Be sure your insurer understands that some or all of your collection is stored away from your home or homes.
  • Keep tabs on inventory. Update your records as you add, drink or sell bottles from your collection.

Contact us for more information

Not all insurance companies offer wine insurance, so it's important to speak with someone who can help you explore all of your options. Your advisor can help you learn more about affordable coverage for your wine collection.