Got Your Collection Covered?

Lost forever amid the rubble of the recent California earthquake were rare baseball cards, autographs, jerseys, and other treasures collected by sports memorabilia fans. But several who had thought to buy insurance from Cornell & Finkelmeir in Wapakoneta, Ohio, were not totally bereft: They will receive up to $10,000 each in claims from the company that bills itself as the nation's largest insurer of sports memorabilia.

Insuring collectibles can be an expensive proposition. A sports memorabilia policy with a $250 deductible typically costs $1.35 for every $100 worth of coverage, and the minimum premium is $500 a year. But if your hoard of comic books, coffee spoons, or old jelly jars is truly valuable, special insurance might make sense.

FAIR VALUE. Of course, what holds value for one collector could be worthless to another. So the first step is to find an expert who can decide whether you've got something worth insuring--against damage, loss, or theft. "Literally anything can be appraised, though it may have little or no value," says John Lanterman, an appraiser in Bethesda, Md. Collectors clubs can often put you in touch with reliable professionals in your region. The Appraisers Association of America in New York (212 867-9775) and the American Society of Appraisers in Herndon, Va. (800 ASA-VALU), or any of its local chapters will also be able to guide you. The ASA, for example, publishes a free geographic directory of appraisers by specialty.

Appraisals can run into thousands of dollars. You can sometimes cut down the rates by taking your own photographs and compiling your own inventory. (Store these records in a safe place outside the house, in case you later have to submit an insur-ance claim.) It is considered unethical for appraisers to charge a percentage fee.

Moreover, you should quiz appraisers to determine their level of expertise in the types of collectibles you want insured: A Chinese-ceramics expert may know nothing about antique dolls. These days, insurance companies are likely to investigate claims, says Elin Lake Ewald, chief executive officer of O'Toole-Ewald Art Associates in New York, a personal-property and antiques-appraisal firm. Therefore, "if appraisers put $80,000 on something, they better explain the basis for doing so."

Once you are satisfied with an appraisal, present it to your insurance agent. (Depending upon the collectibles, a bill of sale is sometimes also required.) You might already have adequate protection under your existing homeowner's policy, although many insurers slap coverage limits of $1,000 or more on such items as silver and jewelry.

Other companies don't have a cap per se, but may include an ambiguous clause that limits their liability on "items of rarity and antiquity." That means you may have to add a rider to your homeowner's insurance or a separate personal-articles policy. Very scarce pieces can be "scheduled" or insured individually--sometimes at the request of the insurance company. Since the amount scheduled is what you'll get back under a claim, you should update policies on collectibles that appreciate in value. "It's often a good idea to insure only the most expensive items in your collection," says Harry Rinker, editor of Warman's Antiques and Their Prices ($14.95; Wallace-Homestead). For instance, oenophiles might be better off protecting a few rare bottles of their wine against breakage than insuring the entire cellar.

SET AND MATCH. It's crucial to find out how a settlement is made. For example, if you're insuring "pairs" or "sets," your policy may include explicit language on what kind of settlement can be reached if you lose, say, a single volume from a set of rare books. At Chubb & Son Inc., a Warren (N.J.) insurer, a customer has the option of surrendering the rest of the book set in return for the price of the entire collection. Be wary of companies that say they will try to match up and replace your missing item.

It's likely that you'll have to pay a bigger premium if you display your valuables at trade shows or exhibitions. Under some policies, you'll pay more for "mysterious disappearance" coverage, which may cut down on the hassle of explaining how your items were lost or stolen.

Some companies limit reimbursements for damages to your collectibles outside the home. Cornell & Finkelmeir will pay a maximum of $2,500 for items damaged at shows or out on consignment, and 25% of your total limit on theft losses.

Other insurers may issue policy discounts if your collectibles are kept locked in safes or if they are backed by security systems. In some cases, the insurer may specify how your valuables must be protected. For example, on stamp collections with a value of more than $25,000, State Farm requires that at least 75% of the goods must be stored in a fire-resistant receptacle. Luckily, the company doesn't specify how often you may open the box to admire them.