I have a personal collection of unique works of art, sculptures and rare collections that I want to insure against any loss or damage. Is a standard contents insurance policy adequate or should I be getting some other type of insurance?
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Answer by Neha Sharma, Hillsdale 2036 NSW
- It is advisable to take out additional insurance cover for rare and expensive items such as your collections as a basic home contents insurance policy does not adequately cover the cost of such items.
- In the event of damage or loss an insurance company will not be in a position to replace ‘new for old’ for rare collections and unique works of art.
- Insurance companies therefore pay the policy holder a lump sum amount relative to the loss and the insurance cover.
- Depending on the cover the insurance company will pay you what it would have cost you to buy the item immediately before the loss or damage occurred.
- For example if your rare collection is insured for $30,000 and you only lose 1/10 of your collection in a house fire, your insurance company will only pay 10% of your insured amount to cover the loss ($3,000).