Appraisals for Insurance Purposes

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Hi,

I am really enjoying reading items in this forum. It's giving me new perspectives on a lot of issues. I hope you guys don't mind me posting too many questions.


I have been meaning to add insurance for my collection onto my house insurance policy for a few years now. The last time I looked into it, my agent told me to get an appraisal from a reputable dealer and submit it to the insurance company. I was living in Hamilton at the time and enquired at a dealer and was quoted $5.00 a note for the appraisal. I have many notes( maybe it's not many compared to the collections of people on this forum), but I have some specimens and other nice notes and also many lower grade notes. At 5 bucks a note times approx. 75 notes, it would cost me nearly $400.00 for a collection that I believe would appraise for just a few thousand at most.  I asked if I could get a discount since I had quite a few notes ( and also since more than a few were purchased from him) but he explained that he would have to grade and catalogue each note and prepare an appraisal document and that this would take quite a bit of time.

I guess I don’t blame him, after all, if a plumber could drop a bill on you for hundreds of dollars for unclogging your sewer, why can’t a reputable coin dealer ask to be paid for what is essentially an expert report on your collection.

Anyway, I didn’t bite the bullet and so my collection sits insured for the maximum $500.00 coverage by my regular house insurance.

My questions are;  Is $5.00 a note a fair price for an appraisal?. Has anyone else insured their collection using a different practice?, Can anyone recommend a dealer or other appraiser in the Windsor/London area?

Thanks.

I already have a top notch alarm system in my home that is monitored and tested, for real the cops were here in less than 10 mins. Get a 200 pound safe and bolt it too the floor and hide it. If anyone breaks in and they can get a 200 pound hunk of metal unbolted from the floor and out of the house swiftly they are pretty dammed talented. I hope they bring some tools. Not too mention 1 person ain't picking up this safe alone, It would take 2 people. The safe is also great for passports, birth certificates, putting stuff in on vacation. You can get an alarm for free if you don't mind paying for monitoring and the safe will cost you about $ 500 bucks

$5 a note for appraisal is much too much, in my opinion - unless your notes are worth $1000s each. Then I guess its alright.

One caution on safes.  If you plan to put it in your cement basement floor, put a piece of plywood or wood blocks under it.  I have a safe once which had no legs, wheels etc and I had it directly on the floor.  Over time I had noticed that it was getting harder and harder to open.  Then it got to the point that it wouldn't open.  I had thought that it wasn't working and the only thing I could do is get a safe cracker in.  When we finally got it opened, it had swelled enough that just the pressure was enough so it wouldn't open.  The cracker said that it had drawn moisture up through the floor and was absorbed by the fire resistant cement of the safe hence swelled.  Ruined the safe and cost $120 to get it opened.

As far as insurance goes, it isn’t worth it.  Over time you will pay for your collection with the premiums.  Save the money and get a good safe, not a disposable one, for your notes at home and spend the money on safety deposit boxes.  Check with your bank and ask for the larger ones and see if you can get a couple, trust me you will need them.  I have one extra box that I pay for just for the future and to assure me one.  Compare the cost of the boxes to what you would pay in premiums, the box is the best and the most secure.


Tom

An insurance company will not cover near the value unless you want to pay a very excessive annual premium (likely defeats the purpose of your investment in the collection).

Tom advocates using Bank safety deposit boxes ( and I support that opinion) but you should be aware that no Bank accepts other than basic security responsibility and will not and do not have insurance on the contents of your safety deposit box. This forms part of your contract with the Bank when renting an SDB. It's up to you to insure the contents.

Do you want to keep the notes at home? (You take your chances and pay BIG insurance premiums to cover your investment).

Put the notes in a Safety Deposit Box? (No assurance  offered by the Bank other than issues related to negligence regarding safekeeping...read the rental agreement).

Safe at home versus LARGE IMMOVABLE VAULT.......hmmmmmm

 :)eastguy

And the cost of a safe deposit box(es) is tax deductible

Contact the Canadian Numismatic Association for details about affordable insurance through a company arranged by the CNA (I believe it's $10 per $1,000 of value of a collection per year). I can't remember the exact details of the insurance but at one time it was blanket coverage, without appraisal required and only items over a specific value required to be documented (although having proof of one's belongings always makes things much easier.) I know a couple folks who were victims of household breakins and they were quite happy they had coverage and everything was smooth when it came to the claim. If I'm not mistaken, the policy covered items stored in one's home, and also during times the items were outside the home, such as during transport to shows for displays, etc....

The safest place for valuable notes is in the bank vault. Fair and reasonable prices.

Home safes are easily cracked. Home alarm systems are only fair, they make noise and then you wait for indifferent police assistance. Safes must be protected from moisture and properly bolted to the concrete floor.

Appraisals of collections a very time consuming, and will take several hours to complete. A fee charged includes a description of every single item, with the replacement value added, and the the whole thing dated and signed. $5 per item is high. Hourly rate of doing it averages $100 per hour. It must be upgraded yearly to add and subtract new items. The only company that insures collections is Hugh Wood, of Toronto. The CNA offers discounted insurance through this company. Become a member to get this coverage.

Rick

Comox mentioned that Safe Deposit Boxes are tax deductible; Can you tell me where?

I've tried to figure it out and nobody seems to be able to give me an answer.

Thanks in advance!

Kelly

I believe across the country. Just claim them when you do your income taxes.

Comox mentioned that Safe Deposit Boxes are tax deductible; Can you tell me where?

I've tried to figure it out and nobody seems to be able to give me an answer.

Thanks in advance!

Kelly

You would claim your SDB on line 221 of your tax return ("carrying charges").  Not sure if you can claim the whole amount including GST or only the pre-tax amount.

See the following link to the Canada Revenue Agency site:

http://www.cra-arc.gc.ca/tax/individuals/topics/income-tax/return/completing/deductions/lines206-236/221/menu-e.html

After decades in the insurance business and an equal number of decades in the coin/banknote business I would HIGHLY recommend the CNA plan through Hugh Wood Canada.  Ihad two large commercial claims, well handled.

Safe deposit box is great but if you like to look at and work with your collection a good home safe is smart and be sure it meets your policy requirements.

Tom made an excellent and often overlooked point - metal attracts and migrates moisture to the safe contents so the safe is BAD unless you have a wood buffer and change that wood every 5 years or so, depending on conditions.

Last insurance broker/dealer/collector thought - unless the values are $5000 or more, take your chances, which are minimal anyway.

OleDon

RE: Kelly B

SDB is deductible if you show investment income (the government still assumes you have bonds or share certificates......) Claim interest or dividend income means you can claim SDB cost as a deduction. I'll leave the rest to those that want to yada yada

eastguy

A NOTE about SAFES

I think its important that you keep a dessicating jar (with beads) in your safe to draw any moisture away from your notes. You can get them (DRY-AID) at hearing aid centres (cost around $8.00 I believe).

They're better than the pouches because the pouches can become saturated without your knowledge: and your safe can become humid (NOT good for high end notes!)-- unless you plan to replace your pouches regularly.  Dry-aid jars can be re-charged so that they absorb moisture by either placing the beads in the oven or microwave.  The blue beads will turn white when the jar is no longer effective.

Think about it if:  you have a safe, your enviroment is subject to temperature or humidity changes, your collection is top notch stuff

And the cost of a safe deposit box(es) is tax deductible

And you do not need a reciept for your annual taxes. Just fill in the amount.

By far the best way to do it in my opinion. As long as you can get in and out easily and often.