Are you an artisan of some sort in your free time? Does your passion lie in creating and selling beautiful craft? Or do you simply love collecting and trading things, for the sake of art or as a passion project? If your answer is yes for one or more of the above projects, then settle in because this blog is for you.
When we think about insurance, our minds automatically jump to the basics – house, auto, and business. But insurance doesn’t end there. There is an array of other situations in which you can find yourself in a jam, and in these times, insurance can come to your rescue.
Especially if your passion project involves expensive tools, raw materials, or goods, or rare collectibles.
Let’s say if you’re known as a connoisseur of wine and manage to get your hands on a bottle of 1999 Maracassin, the prince of Pinot, wouldn’t it be a shame if something were to happen to this rare collectible? Now imagine if you were part of a wine community and had lined up an interesting trade or found someone willing to pay you a premium for the bottle when that happened?
For cases like this, it is very important to insure your passion project, whether it’s your main line of business or not, it needs protection. Here are a few instances wherein your passion project may need insurance, as well as a few points on how to navigate this specific type of insurance.
Your passion project is expensive
Before we get into the details, it’s important to understand that your passion project only needs to be insured if it contributes to your net worth and the elements can be considered an asset. Collectors of wine, watches, fine art, coins all have a lot to gain from insuring their passion projects. Depending on the purpose and nature of your collectibles, you may have to itemize or create an inventory of every item on your policy.
You should also consider cover when you have other valuable items that play a role in your passion project. Say you make artisanal jewelry and have gold and precious stones as a part of your materials inventory. This cover could also consider specific tools that may be super-valuable.
You can also explore the possibility of blanket coverage, which will have all your items with a claim limit on each. This is known as collective coverage. You’ll need a system in place to track and value your valuables in order to maintain your coverage.
Your passion project entails items which can be considered rare or precious
Whether its jewels or wine, you should know the worth of your passion project. Insurance companies have many tools that can be of assistance to a collector. They often use collection management software and detailed inventory lists which have photographs so that everything is documented. This is very handy if you need to make a claim. If needed, this level of detail will also help you in justifying a price you would like to sell at.
Protection against fluctuating markets
There could be the odd rainy day where you may want to sell one of your collectible items. Or by the time you’re done with your tour de force, the trends may have shifted. In such cases, market fluctuations can kill your asking price. Now, if you’re a seasoned player, you may be aware of how market fluctuations often affect the price and value of some types of collectibles and may have built that risk into your financials.
In any case, a certified appraiser should assess the most important items every so often to make sure that you’re plugged in to the most current market valuations. It’s, of course, also important how you maintain your valuables. The condition of your assets is very important, and the way you keep them as well. Given that you’re doing this out of passion, perhaps you don’t need to be told this. But did you know that insurance companies care too? For instance, an insurance company may charge you a lower premium if you keep diamonds in a bank safe deposit, as compared to a safe at home, simply because the risk of damage or theft is reduced.
Passion projects that need preservation
Another important factor is storage and upkeep, some items may need to be preserved to retain value. This includes items such as stamps, artworks, or antiques. Many materials will have specific temperature and humidity requirements for storage. So, make sure that your possessions are preserved well, so if there’s ever a need to make a claim, there’s never a problem with the valuation because of ongoing damage. In fact, how you keep your valuable can determine the value, which will, in turn, affect your premiums, so presentation is everything.
Many people and families spend years creating and curating things out of passion, but often underestimate the value of these things. And even though passion projects are not necessarily fueled by monetary incentive, they are projects that invariably demand a lot of resources in terms of upkeep and curation. This is why it makes sense to have your passion projects insured, you can make a claim to repair a damaged item, or replace an item lost due to theft. That may not make up for the sense of loss you will feel at the damage to something you love. But at least you will be in good shape to start up all over again if you want to.