How High net worth “HNW” insurance can help protect Private Collections -

Top 5 Private Collections and how to tailor cover for them

Private Collections come in all shapes and sizes, but whatever your client collects, it may require additional protection.

Janice Lee, Senior Underwriter at Mansions of Australia, says the most common Private Collections the agency arranges insurance for are:

1. Artworks.
2. Jewellery.
3. Wine.
4. Antiques.
5. Silverware.

But the collections Mansions arranges cover for is wider than those listed above, Janice says.

Some of the more unusual Private Collections Mansions has arranged cover for include porcelain royal family memorabilia, as well as a collection of taxidermied animals. Mansions Executive Insurance also covers collections of furs and musical instruments.

"We have also come across a large gaming memorabilia collection, including figurines and posters stored and displayed in a purpose-built underground room," Janice says.

When Private Collections cover is needed

To determine whether a collection falls within the contents section of a high-net-worth insurance policy or requires additional cover depends on the value of the items involved, Janice says.

Under the Section 5: Private Collections option of the Mansions Executive Insurance PDS, clients can choose a blanket cover for unspecified items, to specify individual items or a combination of both, she adds.

"We recommend brokers review the 'Contents with limits' provision under Section 1: What ‘Home’ and ‘Contents’ mean of the Mansions Executive Insurance PDS with their clients to decide if optional Private Collections cover is needed," she says.

When unspecified cover is selected, a single-item limit of $25,000 applies to jewellery and fine arts, while the single-item limit for a wine collection is $2,000 per bottle.

"If the client has any items over the limits stated above, we recommend that those items be specified and cover for these items will be further considered."

Additional benefits

Janice says that Mansions arranges worldwide cover for Private Collections, with its high-net-worth insurance tailored to help protect valuables against loss, theft, or accidental damage no matter where they are in the world.

For peace of mind, newly acquired collection pieces that may not yet be included on the insured’s policy are automatically protected for up to 90 days from the date they're acquired, with certain sub-limits. Please refer to the Mansions Executive Insurance PDS for full details of the cover. This is provided if the policyholder already has a specified sum insured in the relevant category of Private Collections.

Other benefits of the Mansions Executive Insurance cover include defective title cover if a client is legally required to relinquish possession of an artwork, as well as cover for incomplete fine arts. This applies if, for any reason, an artist cannot complete a commissioned piece, Janice adds.

The details underwriters need

To make the underwriting process as smooth and quick as possible, Janice says it's helpful if brokers provide detailed information.

For new business submissions, Mansions of Australia requires brokers to complete the Private Collections section on its Quotation Request Form.

The section asks for information including the required total sum insured, the number of items and the largest value of an item in each category.

"Whenever possible, if brokers can provide an itemised schedule, this will facilitate the underwriting process, and we can better determine the risk mitigation requirements that may be needed," Janice says.

In the case of a large collection of jewellery or fine arts, she adds that additional information may be required.

"With respect to jewellery, we need to understand the wearing habits, home safe details, travel frequency and purchase habits of the insureds in the last 12-24 months."

"For a fine arts collection, we require information such as whether the artworks are professionally hung or connected to an alarm device and if the client is likely to lend them to an art gallery or museum."

Keeping Private Collections safe 

Janice says there are a number of ways brokers can help their clients keep their Private Collections safe.

Here are some recommendations that can help:

• Professional valuations:
It's helpful to engage a qualified valuer to appraise the value of the Private Collections and ensure the sum insured reflects the current value at least once every three years.

For jewellery items the valuer should be accredited by the Jewellery Association of Australia (JAA) or the National Council of Jewellery Valuers (NCJV).

For fine art the valuer should be accredited by the Auctioneers and Valuers Association of Australia (AVAA) or Australian Antique and Art Dealers Association (AAADA) or Australian Government Cultural Gifts Program – List of Approved Valuers.

• Security measures:
The client should consider installing a monitored burglar alarm system that includes motion sensors, CCTV cameras with backup to a hard drive, biometric locks and a cash-rated home safe for high-value jewellery items.

• Storage conditions:
Clients should store Private Collection items in a secure and optimal environment by considering factors such as temperature, humidity, and light exposure, especially for delicate items such as artwork, antiques or wine.

• Inventory:
Clients should maintain a detailed inventory of their Private Collection, which includes photographs of each item.

For more information

Mansions Executive Insurance protects the assets, lifestyles, and financial wellbeing of individuals and families so they can confidently pursue their passions. For more information about our unique product and service, visit our website, call us on 1300 738 308 or email us at mansions@mansions.com.au.

This document is intended for insurance intermediaries only. The Mansions Executive Insurance Product Disclosure Statement is issued and underwritten by QBE Insurance (Australia) Limited (ABN 78 003 191 035, AFSL 239545) (QBE). SGUAS Pty Ltd t/as Mansions of Australia (ABN 15 096 726 895, AFSL 234437) (Mansions) is authorised to distribute this product on behalf of QBE acting under its own AFSL. Any information contained in this document is general advice only and has been prepared without taking into account your client’s objectives, financial situation or needs. Your client should read the Mansions Executive Insurance Product Disclosure Statement (PDS), Target Market Determination (TMD) and Financial Services Guide (FSG), which can be obtained by contacting Mansions on 1300 738 308 or visiting www.mansions.com.au before deciding to acquire, or to continue to hold this product.