Safeguarding Your Collection – Intelligent Collector

2022-08-02 13:58:37 By : Mr. Volin Huang

FROM HOME SAFES AND OFF-SITE STORAGE TO INSURANCE AND SHIPPING, HERE’S WHAT YOU NEED TO KNOW TO PROTECT YOUR COLLECTIBLES

By James Halperin and Greg Rohan

C rimes against property are on the rise, and the reasons that fine art, antiques and collectibles are great investments are the same reasons they’re great targets for thieves. The current arrest and conviction rates are abysmal, and the odds of recovering stolen goods are even lower. With budget constraints forcing law enforcement to deprioritize property crimes, the outlook for a reversal in that trend is not good. The only solution is to do what you can to protect your collection against criminals – and make sure that it is properly insured in the event that you are the victim of a crime (or natural disaster).

Most collectors want their treasures close at hand to study and enjoy – even though that is a suboptimal loss prevention strategy. Your collection is at risk from theft, fire, water damage and other natural disasters. If you are going to have objects of substantial value at your residence, you should consider several proactive measures to protect them:

“SAFES ARE OBVIOUS DETERRENTS AGAINST THEFT AND HAVE ADDITIONAL VALUE IN THE EVENT OF FIRE OR NATURAL DISASTER.”

The primary off-site storage option is a safe deposit box at either a bank or private vault. If you can find a location close to home or work, the inconvenience factor can be minimized. Sites with weekend access offer a major advantage. Remember that while safe deposit boxes offer secure storage, vigilance is still important. Here are a few storage and security guidelines you need to remember and follow:

First and foremost, do not attach anything to the outside of the package that would hint at its contents. When Ty Inc., the company behind Beanie Babies, realized that boxes were being lost during shipping in huge quantities at the height of that mania, it made a simple change by removing its logo from the boxes. Consequently, shrinkage shrank dramatically. If a package contains any identifying words, such as “coins,” in the mailing address or on the outer wrapping, it makes the contents of that package more appealing to thieves.

Pack the items securely so that they do not rattle. Loose spaces (such as in tubes) should be filled. Styrofoam “peanuts” are good for this purpose. Make sure that your shipping box is strong enough for the included weight, then bind it with strapping tape. If you are using Registered Mail (the preferred method for most collectors to ship small packages containing valuable items), the Post Office has a requirement that all access seams be sealed with an approved paper tape.

“NO MATTER HOW MANY SECURITY MEASURES YOU EMPLOY TO PROTECT YOUR COLLECTION, YOU WILL ALSO NEED TO ACQUIRE SUITABLE INSURANCE TO PROTECT YOURSELF.”

Method of shipment involves a decision that weighs value, risk and cost. USPS First Class or Priority Mail with insurance is the most cost-effective method for packages up to $500 in value. The rate of loss has dropped considerably over the last decade, making this a reasonable option for inexpensive items that can be replaced. Above the $500 value, Registered Mail with Postal Insurance is both cost-effective and extremely safe. The one caveat is that the insurance maximum for Registered Mail is $25,000. The Post Office requires you to indicate if the contents exceed that amount, but it will not pay more than $25,000 on a claim. If the value exceeds that amount, you will need to send multiple packages or obtain supplemental private insurance.

FedEx, UPS and other private shippers have become popular in recent years, offering fast, guaranteed delivery with a high success rate. They also offer some insurance options, but rare coins and certain other collectibles are specifically excluded. You will need to obtain private insurance coverage if you use one of these shippers, or you may request that the other party insures the shipment if there is sufficient coverage available and a shipper account.

No matter how many security measures you employ to protect your collection, you will also need to acquire suitable insurance to protect yourself. As a collector, you need to be especially mindful of homeowner’s insurance because you likely will require a policy that differs from a standard one. You need to know exactly what coverage you are – and are not – receiving. That means asking questions and reading every word of every document in every policy you sign. In the case of coins, you need to be particularly certain of what coverage applies when the coins are at home, in a safe deposit box or in transit, as well as any additional security requirements for each circumstance. Some things to keep in mind:

One final note about security: You need to be careful about discussing your collection (and especially where you keep it) with others. Enjoy your collection, but stay vigilant.

This article is excerpted from The Collector’s Handbook: Tax Planning, Strategy and Estate Advice for Collectors and Their Heirs.