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Insurance policy options abound for coin collectors
By Cindy Brake

Slabs, ledgers and safes provide added security

Insuring a coin collection begins with questions that end with answers resulting in peace of mind, along with a safe and satisfactory plan.

Because every collection is unique, every collector needs to decide what works best for him or her.

Will a homeowner's policy be enough protection? Is a specialized plan necessary? Is a collection protected from loss or damage due to floods, fire and hurricanes (or terrorists; remember 9/11)?

Does insurance pay replacement value or fair market value?

Does a safe-deposit box provide enough protection? What about a personal safe? What kind of safe?

Where does one find answers?

One good place to start in the quest for answers is by calling an agent or broker like Simon Codrington, international director with Hugh Wood Inc. HWI provides special rates to members of the American Numismatic Association.

Coins sealed by grading services like Professional Coin Grading Service, right, and ANACS, above, include a unique number identifying the coin, an added security feature, but sonically sealed grading service slabs are generally not watertight and melt at high temperatures.

Ask a local agent

Another ready resource for information is a local insurance agent like Dave Wilson with State Farm.

Wilson, of Sidney, Ohio, home of Coin World, explains that coin collections, like jewelry, stamp and gun collections, require a separate stand-alone policy from a basic homeowner plan.

A collector generally will be asked to list his or her coins and verify the collection's value by using either the services of an appraiser or obtaining information from a coin catalog or price guide.

Wilson said the agent also needs to see the collection. Premiums are based on the value of the collection, but discounts are offered based on where a collection is kept and the security already in place.

Wilson said it is "very infrequent" for him to be asked about insuring a coin collection. He can write a policy for a collection valued up to $50,000. Policies for higher values coverage are available, but must be reviewed by a district office.

Keeping an accurate inventory is an important step when considering insuring a collection. A ready resource is The Coin World Ledger that allows collectors to keep track of their collection of U.S. coins. It may be carried in a pocket or bag.

Homeowner policies

Codrington points out that most homeowner policies have restrictions or exclusions for coin collections. For example, losses due to flood are not generally covered unless an individual has a separate policy for flooding. And flood insurance can be expensive.

"It varies between carriers," he said.

For coin collectors who wonder how they should insure their valuable coins, the ANA advises that "most homeowner insurance policies specifically exclude coins and other numismatic items from coverage. A rider can be obtained for an additional premium, or a separate policy can be obtained."

The ANA urges its members to "maintain records about your collection and store a copy separately from the coins."

ANA member policies

HWI offers ANA members six options for insurance.

A vault policy covers a collection only when it is in a bank or safe-deposit vault. Coverage is not provided in any other location and the value of the collection cannot exceed $20,000. This is one of the least expensive policies available.

Codrington points out that collectors need to read the small print with their bank because most have limited liability for items stored in the vault.

The bronze policy provides protection only at home. Again, if the coins are ever transported, the policy is not in effect.

A silver policy provides coverage of up to $50,000 at home or in a bank safe-deposit vault and allows the collector to hand carry the collection between the bank and home.

A gold policy extends the silver policy to include mailing by U.S. Postal Service registered or insured mail anywhere within the United States or Canada.

A platinum policy is a custom plan for collections valued at more than $500,000.

All plans provide "all risk coverage," which includes loss due to theft, fire, water and earthquake. Exclusions include loss due to storage issues such as wear, tear, corrosion or intentional acts.

The HWI application asks a collector for the market value of the coins but does not require a list. Documenting a collection for HWI can be done by photographs, receipts or grading submissions.

"We understand most collections are dynamic," Codrington said. He adds, "It is important to be honest about the value of a collection."

Collectors are reminded at www.insurance.com to review their policy periodically to be sure they have the correct amount of coverage. "The value of your collection can change quickly due to market conditions," the site cautions.

These State quarter dollars are identified with a unique bar code and numeric code by Numismatic Guaranty Corporation. The code can be useful in identifying a stolen coin.

Coin dealer Bob Greenstein with Harland J. Berk Ltd. adds that insuring a coin collection may not be cheap, but the peace of mind is worth something.

Slabbed coins graded by the major services offer a level of security of their own: They have unique serial numbers and a bar code that can be used to identify a specific piece – useful information in case of theft.

Collectors should maintain inventories of their coins. Several products are available to help with that inventorying task.

The updated sixth edition of the Coin World Ledger is a handy record-keeping tool that will fit in most safe-deposit boxes. It contains a photograph, listing and mintage information of each U.S. coin (Proof and circulating). All U.S. coins are listed, including major varieties. The ledger features lay-flat binding.

Another inventory record keeper is The Official Red Book Collector's Inventory of United States Coins, published by Whitman Books. The publications contain spaces for recording U.S. circulating coins, classic and modern commemorative coins, Proof and Mint sets, and type coins.

The publication features spiral binding and space to record when and where a coin was purchased, its grade, the price paid, who sold it and other information.

The publication also serves as a numismatic reference with history and specifications about each denomination and coin type, including composition, diameter, weight, Mint mark location and other details.

Just as collectors need to be informed about individual insurance policies, they also need to be informed about the limitations of various safes and safe-deposit boxes.

While common sense dictates putting coins in a safe-deposit box or an explosion-resistant, waterproof safe before a disaster, coin dealer and consumer advocate Scott A. Travers suggests in Protecting Your Coins In a Disaster that if that's not an option, a collector should "take out the coins of the highest value, slip them in your hip pocket and make a run for it and leave the other coins behind. In rising floodwaters, even an additional five or 10 pounds can slow you down significantly, and you could lose your life in trying to save your coins."

According to Travers, Robert F. McLaughlin, a security expert, said that "most insurance underwriters will require a safe that is approved by Underwriters Laboratories Inc. (UL)."

Certified coins are safest in the new generation of safes that guarantee interior temperatures will not rise above 125 degrees Fahrenheit. Travers adds that a lot of coin holders melt at a few hundred degrees.

"If you have a safe that protects up to 500 degrees Fahrenheit and you have a 2000 degree Fahrenheit fire, that safe isn't going to help you much," Travers writes.

A collector also needs to be aware that grading service slabs have their limitations. While slabs are sonically sealed and tamper resistant, most generally are not watertight and the best slabs melt at 480 degrees Fahrenheit, according to Travers.

Another detail to check out if you travel with coins is to find out if an insurance policy covers coins stored in a hotel's safe-deposit box.

"Insurance for such storage isn't particularly expensive, but you need to ask for it," Travers writes.

He also suggests storing proofs of purchase separately from the coins.

One collector, writing online at www.ancients.info/forums/archive/index.php?t-960.html, shares the method of documentation he uses that gives him "the ability to appreciate" his collection "while providing optimal security."

After receiving a coin, it is photographed, weighed and measured, and the results are posted in his gallery as well as a notation to the Ancient Assistant Inventory software (available at the site).

He then prints out the inventory sheet and places it in a clear plastic three-ring binder sheet with associated invoice or other purchase materials, and stores the sheet in a binder. The binder is then placed in a fireproof document safe with other important papers. He also switches the coin flip out for archival Mylar type SAFlips. Finally, the coin is taken to the bank and placed in a safe-deposit box.

The North American Collectibles Association also provides insurance for its members. Barbara Wingo, an NACA spokeswoman, notes that most NACA members are investors, rather than collectors. According to Wingo, collectors tend to prefer to "play" with their collections, while investor collections are stored. With that in mind, NACA offers an affordable online shipping program.

Separate policies are available to dealers. Codrington said a dealer is defined as someone whose primary income is derived from buying and selling coins; an eBay Power Seller; an individual who has a table at any show; or someone who sells coins through a Web site.

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