Collectibles on the move: Risks arise when valuables are in use or in transit

Owning and displaying valuables in one’s own home is just one way collectors—or passion investors—derive enjoyment from their collections. For others, joy comes in putting them to use or sharing cherished items with others, through public museum exhibitions, displays in places of business, or special events. In fact, according to our recent benchmarking study to be released in October 2023, one in five family office clients loan out their collections. One in seven have gifted their collections to a museum or gallery. Collectors need to keep in mind that whenever valuables are on the move, risks follow.

From carrying a designer handbag such as a Chanel Flap, to wearing vintage jewelry at a charity auction, driving an antique automobile in a rally, or playing a rare violin at a benefit concert, valuables can make appearances in a lot of different places. Reasons for moving high-value collectible items vary and can include:

• Relocating items to a yacht, second home or returning them to a principal residence
• Putting items into a storage facility
• Lending items to a museum or a temporary exhibit
• Sending collectibles out for maintenance, conservation, or restoration
• Wearing jewelry or a carrying a high-end bag at a special event
• Evacuating items due to a weather emergency, such as an incoming wildfire or storm

The risks your valuables face

No matter where a valuable item might be moving, every setting poses different risks. Consider these risk scenarios.

Theft 
Physical security of valuable items is a significant concern for collectors. Understanding the security exposures of the location where a high-value item will be displayed or kept, and implementing effective theft prevention measures, are important steps. 

The risk of theft increases for valuable items that are easily concealed, such as jewelry. Personal security is advisable for high-profile individuals wearing or traveling with jewels who can become targets. In the 1960s, Lloyd's syndicates insured a 69-carat diamond ring worn by  Elizabeth Taylor, with the stipulation that she employ guards anytime she wore the ring in public. In November 2021, a dozen people went on trial in France for a 2016 robbery in which thieves broke into a Paris apartment rented by reality TV star Kim Kardashian, tied her up, and stole more than $10 million of jewelry. 

Additional security may have helped avoid the theft of a rare 1963 Chevrolet Corvette in broad daylight during a Michigan car show in October 2022. The coupe, which features a split rear window, is among the most coveted by Corvette enthusiasts. A similar model was auctioned earlier in 2022 for $350,000.

For jewelry or small-to-medium-sized collectibles kept at home, consider upgrading to a theft-deterrent safe. These are becoming more frequently required by insurers in addition to a fire-proof safe. Additionally, keeping pieces of jewelry that are not worn regularly in a bank vault will not only better protect the items, but it may also grant you an insurance premium discount. 

Physical damage 
Traumatic as theft can be for collectors, another upsetting—and more frequent—hazard is physical damage. Breakage and other forms of damage can result in substantive loss of value to collectible items. Many passion investments fluctuate in value over time, but sudden damage will devalue a piece abruptly. 

Valuables in transit are at their most vulnerable. Mishandling and/or improperly packing fine art, for example, can result in breakage or surface damage. This may cause significant depreciation. 

For heavy and/or fragile collectibles, another consideration is the strength and stability of the display location. From a small bronze sculpture to a multi-ton automobile, a pedestal or the flooring beneath the auto may need reinforcing. For these reasons, passion collectors should work with specialists to package, ship, move, or install high-value items.

Sometimes, physical damage occurs when bystanders get too close, or another object falls onto a high-value item. Such was the case for some of the most expensive art accidents. For example, a man who tripped on his shoelace at a museum in the United Kingdom fell into a ceramic vase from the Qing Dynasty, which toppled into two others, shattering all three. The loss was valued at nearly $500,000. 

When loaning a piece for display, ask the museum or gallery what security measures will be in place. For items on display at your home, consider putting up a physical barrier for special works or even dedicated security when having guests over. 

When relocating to a new home, be aware of any common natural disaster or weather risks for the area and implement appropriate safety measures. For example, in the western states, you may be required to install a fireproof safe or an automatic sprinkler system to protect valuables from wildfire damage. With coastal properties, consider making evacuation plans for your largest or most valuable items in the event of an incoming storm.

Environmental hazards 
Temperature, humidity, and ultraviolet light can damage or destroy some collectibles. For example, direct sunlight can degrade painted artwork. Similarly, heat can compromise bottles of fine wine. A wine’s aging process accelerates at temperatures above 70 degrees—higher temperatures can “cook” the contents and irreparably taint the wine’s flavor.  

While collectors may have special technology in place to monitor their home environment for their collections, the same care should be taken when relocating pieces. Ask movers and shippers about what safety measures are taken to ensure the proper conditions are maintained throughout the journey. 

What collectors can do

Collectors who have invested thoughtfully in their pieces can take steps to help properly care for them. 

Place specialized coverage for special valuables.
Traditional insurance such as homeowners policies generally provide limited coverage for collectibles and other high-value items, even when such items are listed on a schedule of insured property. Most standard homeowners policies cap valuables coverage between $2,500 and $10,000. But even more concerning for collectors is the types of loss often excluded in these policies. If your $18,000 Joan Miro lithograph falls off a gallery wall because it was not properly mounted, your homeowners policy may not cover it at all. Valuable pieces pose special risks, and specialized policies exist that can provide much broader and more customizable protection for these items and the unique needs of their owners. 

There is a common misconception that valuables are expensive to insure. While high-end jewelry that is commonly worn takes on more risk, art or collectibles that sit at home have a different propensity for loss. Talk with your personal risk advisor about your collection, how it is used, and what mitigation strategies are in place so they can help you obtain suitable coverage at the most reasonable cost. 

Seek specialist help.
Collectors planning to move high-value items to another location or regularly wearing or using valuable items, regardless of the distance or reason, should consult qualified professionals for advice. Talking with your personal risk advisor is a good place to start. They can help passion investors identify and mitigate different exposures, discuss options for protecting their collections, and refer collectors to other reputable professionals in other fields such as security, movers, and storage facilities. 

Take steps to mitigate risks ahead of a move.
The current personal insurance market is challenging. Some say it’s the hardest market in a generation. Collectors and homeowners who take as many risk mitigation steps as possible will not only be less likely to suffer a loss, but they will be more likely to find and keep good insurance policies. Strategies to avoid damage and loss go a long way in protecting valuables when they are on the move or in use. 

• Employ extra security detail for valuables in use, such as expensive jewelry worn at an event or a car on display, or if you are entertaining at home and guests will be near your collection. 
• Work with specialized firms who understand the nuances of relocating precious items.
• Conduct due diligence and background checks for any person or firm you plan to hire to handle your valuables. 
• If your home will be vacant for an extended period, work with professional property managers to maintain your property and collection while you are away or hire experts to come move and store your valuables elsewhere. 
• When lending artwork for display, engage your insurance advisor ahead of time to help ensure the pieces are properly covered during the loan period and in transit.

How we can help

Marsh McLennan Agency Private Client Services and our insurance carrier partners can design effective risk management programs that provide flexible and specialized coverages for your treasured belongings. Schedule a consultation with one of our Personal Risk Advisors to help make sure your collection is properly insured and learn about your options. To read more tips on protecting your valuable collectibles, download our report, Protecting Passion Investments.