Wine Collector? Protect Your Investment

If you purchase fine wine as an investment, here is a red alert – your homeowners’ policy probably does not cover your wine collection. In fact, the vast majority of homeowners’ policies exclude coverage for perishable goods like wine.

Ensuring you have adequate insurance coverage on your wine collection is absolutely critical. Some individuals have spent thousands of dollars to accrue an impressive wine collection or wine cellar.

Getting the Right Insurance Policy for Your Collection

When shopping for an insurance policy to protect your investment, consider an agreed upon insurance value and to keep records of the collection purchases, sales, and consumption to avoid insurance disputes in the event of a loss.

Setting a reasonable deductible with your insurance agent is a good way to manage the cost of insurance keeping it reasonable and coordinated with your risk aversion.

Getting a quality insurance policy should not be terrible difficult since the value of wine is fairly transparent. Web sites like and enable wine collectors to check and verify the retail value of their wine collection. In addition, major wine auction houses such as Zachy’s, Acker Merrall & Condit and Hart Davis Hart release their results. Access to this information makes it much easier for wine collectors to know and track the value of their investments.

Should My Wine Collection Be Owned and Managed by an LLC?

Probably not, but it depends on your circumstances and what exactly you collection is used for. Typically, most investors are simply wine connoisseurs and develop their collection for personal enjoyment and use. In that case, there probably isn’t a need to set up a wine-specific LLC. However, if your ownership and sale is solely for investment purposes and the wine is not used for personal enjoyment, having the collection managed by an entity like an LLC may be worth considering, especially for tax purposes. It is best to sit down with an experienced attorney to discuss these important issues.

Wine Collection and Your Estate Plan

If your wine collection has become a substantial asset, treat it like one. Be sure your collection is properly mentioned in your estate plan. This is important because numerous questions and issues arise with an asset like a wine collection when someone passes on. For example, do you want your wine collection to be sold? If so, who should your representative consult to complete the sale and to whom would the proceeds go to? If your wine collection is being divided among multiple beneficiaries, are the recipients able to afford to properly store and deal with the collection? You do not want to leave these issues unaddressed and subject to the whims of your executor, or a beneficiary.

In addition to a wine collection, you need to be sure all of your valuable assets and investments are properly managed in your estate plan. To accomplish this, you should sit down and speak with an experienced estate planning attorney in your area.