When it comes to wearable collections—haute couture, ready-to-wear, designer shoes and handbags, bespoke suits and other prized accessories—gaps in your homeowners insurance coverage may expose you to financial loss if damage occurs. For example, if a severe storm floods your beach house, you may expect your homeowners policy to cover damage to shoes, clothing and purses. Unfortunately, without a special flood “endorsement,” such items will not be covered. Furthermore, any resulting mold may not be covered, either.
Here are several other factors to consider if you’re relying on a homeowners policy to protect wearable collections:
All dry cleaners are not created equal.
If an item suffers damage due to the wrong cleaning technique, some exclusions in your homeowners policy may apply. A homeowners policy views this type of damage as normal “wear and tear,” and your claim will likely be denied. Second, custom-beaded gowns or other couture may require specialized treatment—an important difference your insurance provider should recognize.
Coverage restrictions may strain your designer relationships.
Designers may have restrictions on their commercial insurance policies, or may not carry any insurance at all on their work. If damage occurs while a gown or other item is being custom-made for you, you may need to endure the claims process on the commercial side before your homeowners policy can respond. This might lead to lengthy delays, financial loss and unwanted stress on your relationship with the designer. Another potential pitfall pertains to items on loan: Many homeowners policies include a “property of others” clause with a maximum payout of $10,000 for damage caused by no fault of your own. This is useful when it comes to a borrowed lawn mower, but not in the case of couture clothing.
Moth damage could put a hole in your wallet.
Moth larvae can leave beloved couture spotted with holes, and your homeowners policy won’t be there to fill them in—or offer reimbursement.
You’re not compensated for any loss in value.
When a highly collectible item is damaged, repairs may need to be made via the original manufacturer. Although the restoration may return the piece to good-as-new condition, it could diminish its original value. With a standard homeowners policy, you likely would receive only the retail replacement value, or worse: just the cost to repair the item.
Filing claims can get tricky.
Your friend asks guests to leave shoes at the door during a charity gala, and your best pair goes missing. Or, you notice that a few ready-to-wear items have mysteriously disappeared from your closet. If your wardrobe pieces aren’t on an itemized private collections policy, you may face an onerous claims process. A homeowners policy would also have a deductible to meet.
Vacation homes may not have the same level of protection.
A homeowners policy further restricts coverage down to 10 percent of the contents limit if damage occurs while couture is stored at a secondary residence insured through a different provider. Your deductible would apply in this scenario as well.
What you can do:
It is possible to obtain distinct protection for your most precious fashion pieces. Consult an independent insurance advisor who focuses on solutions for individuals and families with substantial personal wealth. He or she can help you access worldwide coverage for all types of private collections, typically without a deductible. In addition, look to knowledgeable wardrobe storage and protection vendors, such as Garde Robe LLC, to ensure the best possible preservation over the long term.
American International Group, Inc. (AIG) is a world-leading property-casualty and general insurance organization servicing more than 70 million clients around the world. Through its Private Client Group, a division of the AIG member companies, successful individuals can access innovative protection for homes, excess liability, automobiles, private collections, yachts and more. AIG Private Client Group also offers supplemental services designed to minimize property damages, safeguard fine art and other collectibles and bolster family safety.
