The indexed value of collectible wine has more than doubled in the period from 2005 to 2013, and many shrewd collectors are seeing a good return on their investment. Like any collectible item, it's crucial to make sure that you adequately insure your wine collection, and it's particularly important to closely check the terms and conditions. Make sure you're meeting the terms of your collectible wine insurance, and check the following fine print details.

Storage requirements

Insurers will expect you to store fine wines in the right environment. An expensive bottle of wine could lose most of its value if you allow it to get too warm or too cold. Some insurers will simply add a clause that says you must store the wine 'appropriately', while others will describe exact storage conditions.

The right conditions for storing fine wine include:

  • An average room temperature of around 55 degrees, but no more than 70 degrees and no less than 45 degrees
  • Humidity of less than 80 percent and no lower than 60 percent
  • Low light conditions or darkness

You'll also need to make sure that you keep your collection somewhere that doesn't suffer from excess vibrations or strong smells.

Diminution of value

It's important to note that the value of a fine wine collection depends on both the vintage and the condition of the bottle. For example, if you accidentally damage the label on a bottle, the value may decrease by 10 percent. It's important to check if your policy allows you to claim for this partial loss in value, or whether the policy only offers insurance for complete loss.

Current market value

It isn't always easy to accurately assess the value of your collection. Insurers will normally ask you to send them a complete inventory of the bottles you own, but they may also impose rules about how both parties agree the value of each vintage. You may need to contact a certified wine appraiser for more help, and in some cases, the insurer may insist that you use an appraiser of their choice.

Where you store your wine

Insurers aren't just keen to know how you store your wine – they also want to know where you keep the bottles. A wine insurance policy may only cover one building location, so if your collection is in two or more homes, you may need several policies. Insurers may also exclude cover if you store wine in a professional wine warehouse. In these cases, the wine storage company must have its own insurance.

Extent of protection

It's important to make sure that your insurance gives you the most complete coverage possible, but some insurers will still apply exclusions. For example, all insurance plans will cover you against theft, but your coverage may not extend to damage from a flood or other extreme weather event.

Wine storage systems often rely on a power source, so you may need insurance to protect your collection against an outage. Look for details of the plan's coverage for accidental damage by a third-party, too. For example, will your insurer pay out if a tradesman accidentally knocks over your storage unit?

A good vintage wine collection can quickly become a valuable asset, so it's important to make sure you have the right insurance form a company like Nauroth & Associates Insurance Brokers Ltd. Check the fine print of your policy, and avoid a nasty surprise if you ever need to claim.