Insuring your collection

A standard home or tenant policy covers personal belongings and a bag is often protected against events such as fire. Theft is where the gaps usually appear: many policies set special limits for valuables, so a stolen bag is rarely paid back at its full value.

How a loss is valued matters just as much. Depending on the policy, it is paid at actual cash value, which deducts for age and wear, or at replacement cost, what a similar piece would cost today. Even when a home policy is adjusted for valuables, it generally pays back the purchase price, not what the piece is worth today, which can be a real difference for a bag whose value has risen. And a base policy often does not cover a piece that simply disappears, with no sign of theft, or covers it only up to a low special limit.

The quickest way to know where you stand is to read the section of your policy on special limits, then ask your insurer or broker how handbags are treated.

• Adjusting your home policy. A rider, also called an endorsement or scheduled coverage, is added to your home policy and lists each piece with its value; a floater does the same as a separate policy. It usually improves coverage for theft and loss, but the listed value is often a ceiling and is commonly based on the purchase price, so ask whether the policy pays that amount or the lesser of it and the cost to replace.
• A specialized policy for valuables. Some insurers focus on collections and high-value homes. Their policies can offer agreed values set on what a piece is worth today, coverage worldwide and a single amount for a whole collection. This is generally where the fullest protection is found.

A broker who works with valuables can arrange a specialized policy and compare it with an adjusted home policy for your situation. What suits one collection of three bags may not suit a collection of twenty.

• Does the policy pay an agreed value, fixed in advance, or an actual cash value that deducts for wear?
• Are loss and theft covered away from home, including when traveling abroad?
• Is a piece covered if it disappears with no clear explanation?
• Is accidental damage covered and would a repair by the maker be paid for?
• What deductible applies and is there a limit per piece?
• If a piece is worth more on the resale market than at retail, is a claim settled at retail value, at resale value or at an agreed value and can the insurer choose to replace the piece instead of paying?
• What proof will be required if you make a claim?

Terms differ from one insurer and one country to the next, so the wording of your policy always has the last word.

To set a value and again at the time of a claim, insurers usually ask for proof of ownership and value:

• the receipt, for a piece bought at the boutique, which some insurers accept on its own while others ask for an appraisal as well;
• clear photos of the piece from several angles;
• a written appraisal from an independent appraiser, usually required for a piece bought on the resale market or whose value has changed and sometimes renewed periodically;
• a simple inventory of the whole collection, with a copy kept away from home.

Our guide to keeping proof of each piece covers what to keep and how.

Coverage is only as good as the values it lists. Tell your insurer about each new piece soon after you bring it home and review the values of the collection regularly, for example once a year. Retail prices change over time and the value of a piece on the resale market can differ from what you paid.

Before a trip, check how your policy treats pieces you carry abroad and whether anything must be declared in advance.

Every policy is different and terms vary from one insurer and one country to the next. Whatever you read here, the only reliable answer about your own coverage comes from your insurer or your broker and from the wording of your policy. Ask them directly what is covered, for which events and at what value.