Collectibles Craze Boosts Growth in Insurance Industry
As sales of sports memorabilia have risen during the coronavirus pandemic, some insurance companies have seen their own mini-surge.
“Our activity is at a level that I have not seen in the 28 years I’ve been in the insurance industry,” said Thomas S. Finkelmeier Jr., president of the nation’s largest insurer of sports memorabilia for dealers and collectors. His Ohio-based Finkelmeier Insurance Agency also represents auctioneers, shows and investment groups.
“We are conservatively adding three to five new clients a week,” Finkelmeier told Sportico in an interview. “This niche has been very profitable for us.”
And costs are very affordable for the insured. Finkelmeier says that one can insure $75,000 of collectibles for just $150 a year. While some of his clients have collections worth tens of millions of dollars, many seek to protect more modest compilations.
As Finkelmeier sees it, the expansion of collectors reflects several factors. High-end buyers, he said, “are bored, stuck at home and looking for something to do,” while their wealth, especially from passive investment income sources, continues to climb. For others, more time at home meant more time to clean house, leading them to uncover collectibles and add new items to the marketplace.
Finkelmeier also suspects nostalgia has amplified interest in sports memorabilia. “People are looking back to better times,” he said. “In a pandemic, nostalgia is an especially powerful force.” Yet the most influential reason, Finkelmeier surmised, is that “we’re seeing a lot of press coverage about the sale of sports memorabilia for a lot of money. Look at the Michael Jordan memorabilia and record sale values—that was all over the news.”
Finkelmeier, who serves on the board of directors of the Neil Armstrong Air & Space Museum, is also an avid collector sports and other historical memorabilia. While he generally keeps what he obtains, he recently sold a 1952 Topps Micky Mantle card for $80,000—far more than he expected to net.
Collector clients “are the best kind of insurance client,” Finkelmeier contends, since “they love what they collect” and “take [protective] measures” that typical people do not—like avoiding storage of items under a kitchen sink or in a basement.
Loretta Worters, vice president of media relations for the Insurance Information Institute, agrees with Finkelmeier “that more and more people purchasing baseball card collection insurance.” She noted that collectors have several ways to insure, including through homeowners’ policies. Worters said specialty baseball collections insurance is often an attractive option due to “very high” limits and coverage of numerous risks, including for accidental damage, burglaries and theft, fire, floods, natural disasters, mysterious disappearance (i.e., losses that can’t be adequately explained or documented) and loss/damage during shipment.
Worters stressed collectors should ask a professional appraiser for an opinion on the memorabilia’s value and keeping “a detailed accounting” of the items, “with photos and any receipts or certificates of authenticity you might have.” These steps prove “invaluable” in the event of having to document a loss with an insurer.
Documenting—or failing to document—collections sometimes spark legal disputes. In March, U.S. District Judge Madeline Hughes Haikala granted summary judgment to State Farm in a lawsuit against the insurer by baseball card collector Tedd Wilson.
Back in 2018, Wilson says in his lawsuit, he flew from Alabama to Las Vegas with about 40 cards, which he valued at over $150,000, in a zipped canvass bag. After checking into his hotel, he realized his cards were missing and possibly left behind in a taxi. He called the cab company but was told the driver found no bag. Wilson then filed a police report. The cards were never found.
Wilson’s cards were insured by a State Farm personal articles policy, which covered collectibles and provided about $156,000 in coverage. The legal dispute stemmed from whether Wilson complied with the policy’s “post-loss requirements” obligating the policy holder to provide certain categories of documents and materials.
To that end, State Farm informed Wilson it was conducting an investigation into his claim and would exercise its option to examine Wilson under oath under penalty of perjury. State Farm stated that since 1998, Wilson had submitted at least five claims “that are almost identical to the one he submitted” in the case.
State Farm asked Wilson to bring with him information about his purchase of the cards, but Wilson insisted he lacked receipts and said the cards were purchased with cash. As portrayed in Judge Haikala’s order, Wilson also declined to provide notes of his conversation with a police detective, details about his previous employers and full acknowledgment of whether he had made other insurance claims in previous years. Wilson maintained these requests were irrelevant to his claim and tantamount to harassment.
Judge Haikala sided with State Farm, noting that in the mid-2000s, Wilson brought a lawsuit against an insurance company alleging “that he lost approximately 46 baseball cards while in transit from his home in Fort Lauderdale, Florida, to Las Vegas, Nevada.” Several years later, United National Insurance Company sued Wilson over a disputed claim involving a loss of cards. The judge concluded that Wilson failed to satisfy his contractual requirements under the State Farm policy.
For collectors, buying insurance makes sense—but orderly record-keeping and required disclosures are essential ingredients for those policies to work.
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