Do I need special coverage for my record collection?
When I first saw this question, I thought it would be a straightforward one to answer. But after doing a bit of research, I realized that it's much more nuanced.
In most circumstances, there is no need to get special insurance coverage for your record collection, as long as you own it purely for enjoyment and it's not part of your business as a radio station manager, record store owner, or DJ. Your records will be covered under your home insurance as personal property. As long as you make sure to have a high enough limit to cover both your personal property and your record collection, that should do the trick for most people (but be sure to check out An Intro to Insurance Sublimits to know what to watch out for).
The problem comes when you file a claim and there is a dispute about which category your record collection falls under. We'll go over the three most relevant categories to illustrate the issue: regular personal property, memorabilia, and electronic media.
In the best case scenario, your insurer will deem your record collection to be regular personal property. This will give you full coverage with no special limitations. It will likely be on a replacement cost basis (if possible) and the loss will be treated exactly the same way as damage to your sofa would be.
Unfortunately, this classification is unlikely.
The second best scenario is if the insurance company considers your record collection to be memorabilia or a collection of some kind. In this situation, your payment will be subject to a maximum limit. Since memorabilia is either one-of-a-kind or difficult to replace, the payment will be for actual cash value, rather than replacement cost.
This is the most common classification for record collections. So, if your collection is large and valuable, it would be best to buy a separate policy since the value of each record may exceed the maximum coverage limit provided under your standard home insurance policy (learn more in Personal Property Floaters 101).
When I spoke to some colleagues and underwriters, some of them mentioned cases in which the insurance company would consider a record collection to be electronic media. If this is the case, then you would likely have no coverage whatsoever under your standard home insurance policy.
Worth Looking Into
Since few people build a record collection without at least some financial investment and dogged dedication, being left without adequate coverage is taking quite a risk. Given the uncertain nature of the situation, speak to your broker or agent and let them know about your collection. They will be able to verify your coverage and ensure that you have the coverage you need (see Insurance Agents: What's the Point? to find out how they can help).
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