Properly stored, many wines can age for decades. They increase in complexity and beauty—and, over time, some increase in value. But all wines are relatively fragile, as valuables go. They’re prone to unique risks, against which serious collectors will want to be insured.
Most standard homeowner’s policies are inadequate to cover valuable collections. Even dedicated wine collection policies (relatively new in the world of insurance) need to be carefully vetted to ensure they cover the risks collectors expect them to.
The following are the top five most common sources of harm to wine collections.
1. Water Damage
Wine collections are commonly kept in cellars and lower levels of homes, where water from broken pipes or fixtures is likely to settle. Just as often, though, water from a malfunctioning cooling unit within a wine cellar—meant to keep wines safe from overheating—can be a source of significant excess moisture.
Wine bottle labels damaged by discoloration, mold, or peeling can lose market value of around 25% or more.
2. Disruption of Climate Control
The ideal long-term storage temperature for wines is around 57 degrees. The ideal humidity for corks—to avoid drying, cracking, and premature oxidation of the wine—is about 65%. (To keep corks moist, bottles should not be kept standing for long-term storage.)
Brief, insignificant variance from these standards won’t noticeably harm most bottles, but if a wine is subjected to extreme changes, such as a summertime power outage—the wine may be maderized or “cooked,” resulting in a flat, mono-dimensional stewed fruit character in place of a complex bouquet.
Regardless of whether a collection is damaged, any overheating incident will cast doubt on the collection in the marketplace. A collector seeking to liquidate such a collection will be unable to do so at full value.
3. Fires
While a fire occurring is an ever-present risk for any homeowner, many American wine collectors live in regions prone to wildfires, such as California and Oregon.
Collections damaged by the effects of fire—whether directly from heat, smoke, and structural damage to homes, or from related causes such as power outages and water damage from sprinklers—are quite common.
4. Earthquakes, Tornadoes, Hurricanes and Other Natural Disasters
Most Americans who don’t live in regions prone to wildfires do live in regions at risk of one or more other kinds of natural disasters. Anything that poses a threat to your home is a threat to your wine collection. If your home policy covers disaster-related damages to the contents of your home, it may nonetheless have sub-limits affecting your ability to claim the full value of your collection.
5. Theft and Mysterious Disappearance
Theft is an obvious risk for valuables—but less obvious is the broader category of “mysterious disappearance.” Sometimes valuables disappear without clear evidence of theft. If your policy covers theft, be sure to know whether it also covers mysterious disappearance.
If you’ve made a significant investment in fine wines, you should ensure these and other risks are offset by sufficient insurance. If you aren’t sure that they are, The Horton Group can help. Contact Ken Sidlowski at Horton for an expert review by email or at 708-845-3159.
Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.
