How to Insure Your Whisky Collection

Worried about your burgeoning whisky collection’s security? You can safeguard your coveted investment with specialty insurance. While the average homeowner’s policy will typically cover lower-end bottles of whisky (though you should confirm this with your broker), it won’t cover all circumstances, nor will it handle replacement of high-priced bottles—those valued at more than $500.

Securing a specialty insurer isn’t overly difficult, says Pinchus Chein, proprietor of Brooklyn-based Chein Insurance Agency, who brokers deals on behalf of clients across the nation.

How to Get Started With Insuring Your Whisky

To start a policy, you’ll first need to determine the nature of your collection and how much effort you wish to expend detailing it. For collectors wishing to cover a 100-plus bottle collection—a few of which are worth $600 each, and perhaps a handful are in the thousands of dollars—that’s easy to do with an insurance company like AXA XL, says Chein. “You submit a spreadsheet that details every bottle—including ABV, cask number, date distilled—and your valuation. AXA charges you a percentage of the collection, so if it’s a $100,000 collection, you’ll pay $375 per year.”

Chubb is a marginally pricier insurance alternative—“the Rolls-Royce option because of their superior claims handling,” says Chein. Lastly, for the collection worth over $2 million, Chein recommends Lloyds of London, to cover everything from worldwide shipping from auction houses, multi-country storage, and bottles worth six figures. Myriad factors affect pricing, but one thing is certain: “A policy is very, very expensive,” says Chein.

Be sure to keep all your receipts, because while “insurance companies are happy to sell you a policy,” Chein says, “if there’s a claim and you cannot prove valuation, you won’t be getting paid.” If you received a bottle as a gift, you’d be wise to get it professionally appraised. And any single bottle above certain valuations—these vary by company—will require appraisals and documentation, as would very rare bottlings, vintage expressions, and items without receipts.

To start a policy, you’ll first need to determine the nature of your collection and how much effort you wish to expend detailing it.

That’s also true for bottles that appreciate exponentially. If you bought a bottle of Pappy Van Winkle at a retail outlet at SRP $129, but it’s now worth $2,400. “You can go back to the same store with your receipt and ask them to give you a letter saying it would cost $2,400 to replace it,” Chein recommends. Otherwise, the insurer would only pay the $129. Or, you can hire Christie’s or Sotheby’s for an appraisal.

How Valuations Work

Be forewarned: What you paid and what an auction house will attest a bottle is worth are two different things, and valuations change based on market data. “We look at all the auction data we can scrape,” says Zev Glesta, assistant vice president and whisky specialist for Sotheby’s. ‘We used to value, say, an Old Rip Van Winkle 25 year Decanter between $14,000 and $18,000, but recent hammer prices caused us to adjust to $20,000 and $30,000.”

Appraisal clients give Sotheby’s a receipt and show a photo, and the Sotheby’s team looks at the bottle condition, provenance, brand recognition, the vintage, how long it’s been in your possession, and whether it’s part of a collection or a one-off bottle. “Then we dig into our sales archive to arrive at an estimate range which we feel comfortable that this bottle will sell for, no matter what,” says Glesta.

What’s Covered Under Specialty Whisky Insurance?

“Fires, theft, vandalism, breakage,” says Chein, who notes bottles must be safely stored, “not just on a shelf where your cat can knock it over.” But even “mysterious disappearance” is a valid claim, per Chein, who says clients have simply lost bottles and can’t remember if it was taken to a party or if someone swiped it from their home.

And yes, even if you drop your own bottle, you can get it replaced. “One client, a hedge fund guy who’d gotten a major bonus, went and bought a 1965 The Macallan Fine and Rare,” recalls Chein. “Then it was a $25,000 bottle, and he was so excited that he dropped it leaving the store, shattering it. He put in a claim, the insurer gave him a bit of a hard time, but ultimately they wrote him a check, and he bought another bottle.”

Chein’s advice for getting started with a specialty insurer is simple: “Keep good records, including all receipts. For higher-value bottles, get appraisals from reputable sources. Secure your bottles in safe temperature and moisture-controlled locations—in locked rooms, on stable shelves. And for very big collections, make sure you have a fire and burglary alarm installed.”