Are wine cellars grapely underinsured?
10 June 2008
You may have noticed that your local wine bar has recently been putting its prices up but are you willing to keep on paying extra for your favourite glass of Sauvignon Blanc?
Well, whether you are or not, the wine industry is witnessing a huge increase in sales as a result of soaring global demand.
According to The London International Vintners Exchanges’ Liv-ex 100 Index, prices of the 100 most sought-after wines have risen an incredible 164% since January 2005.
Taking this into consideration, would this mean that wine cellars are underinsured?
James Miles, Founding Director Liv-ex, said: “Taking six typical collectors’ wine over the last two years, prices have leapt by up to 213%.
“We have opened up our merchants’ electronic trading system to help wine collectors track the latest market prices for fine wine. Our Cellar Watch service allows wine lovers to track the current value of their portfolio. As such, there is really no excuse for any collector to be underinsured.”
Specialist extensions to household and fine art insurance policies can include wine collections, but cover is normally on an ‘all risks’ basis, which will include perils such as accidental damage.
Charles Hamilton Stubber, Director for Lloyd’s broker Aon Private Risk Management, warns: “You should check that in the event of a loss such as fire the claim would be settled on the basis of market value at the date of the incident – in other words, that the wine merchant or storage facility regularly reviews the worth of your asset and updates as necessary. If you’re laying down bottles for your kids or godchildren over a long period of time, the wine may have significantly accumulated in value.”
“We tend to see few wine claims from private collectors as individuals usually store their cases in specialist storage facilities,” adds Hamilton Stubber. “But when collections are kept at home, claims are often as a result of accidental damage or flood.”
To avoid becoming underinsured, private wine collectors must regularly update their broker on their wine collection.
“Due to the increased popularity of collecting wines, particularly en primeur (wines sold before bottling), we have seen values rising in correlation. Keep an eye on the market and the shifting value of your collection,” Hamilton Stubber said. “Also, if you’re growing your collection, inform your broker as this could affect the premium and cover. You must regularly re-value your collection to be certain you have sufficient cover in case you do have to make a claim.”
Last updated on 10 Jun 2008
