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Here are a few things that everyone should be aware of regarding collections and claims.

Collections are usually an exception to coverage on household insurance policies. This is throwback to the days of stamp and coin collections because there was seldom any proof of purchase of the individual pieces and the value of lost or destroyed collections in progress was impossible to evaluate.

As in any claim, the burden of proof falls on the claimant. You must have proof of ownership and value to support an insurance claim. The claims processor will be looking for documentation such as photos, receipts, appraisals, etc. to support your claim. Their boss is not going to cut a large cheque because you seem like an honest guy. Don’t blame them, 20 percent of all insurance claims are exaggerated.
Replacement Cost Policies only provide replacement cost if the goods are lost or totally destroyed. You must file a timely and substantiated claim in order to obtain permission from the insurer before replacing them. If you do not replace the goods, you are only entitled to the “market value” of the goods. The claimant usually thinks replacement cost for my priceless treasures; the insurer thinks garage sale value for your old junk.

If the goods are damaged, the insurer has the right to have them repaired. If you do not wish to have them repaired, you are only entitled to a cash appearance allowance which is usually considerably less than the repair cost.

The best thing to do is talk to your insurance agent. Unless you have a very large and expensive collection of trains, an inexpensive rider to your current policy may be all that is required. If documentation is required, they should let you know what would be considered sufficient to substantiate a future claim.

As an example, I had a 13 year old, red Volkswagen Rabbit convertible. If it were stolen, the book value would have been less than the deductible. But it had never been winter driven, was in excellent shape, ran well, had low mileage, and turned heads wherever I went. After speaking to my agent, I had appraised at a Volkswagen dealer for $7500. I then provided my agent with the appraisal and several good colour photographs. Fortunately it was never damaged or stolen, and I sold it when it was 24 years old for $4800.
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