Insuring Hobbies: Coverage for Classic Car Tinkerers, Stamp Collectors and Winemakers

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    Hobbies can be a lot of fun and offer a host of benefits.

    They help relieve stress, encourage people to explore new talents and can boost self-confidence, notes self-improvement writer Steve Scott. And having a hobby is quite common in the US, with the average American spending five to six hours each week on hobbies, according to Statista

    Many are affordable and require little investment. However, some are costly and require thousands of dollars to fund. They are expensive enough that they’re worth insuring as assets. This group presents an opportunity for independent agents, where you can grow your business by covering hobbyists. 

    Here’s what you need to know about insuring hobbies and some specific types of coverage to offer. 

     

    Examples of Expensive Hobbies 

    So what exactly do we mean by high-priced hobbies?

    Woodworking is a prime example. Home-based business resource Assemble and Earn says there are nine main costs involved with setting up a woodshop, including work benches, power tools, dust removal systems and raw materials. 

    Winemaking is another expensive hobby. Wine expert Bob Herold lists a wine press, barrels and capacity tanks as necessities for getting started. The exact cost of these items can vary considerably, but Anna Dement at The Grapevine Magazine points out that a quality wine press alone can cost $1,700.  

    Classic car collecting and tinkering is a hobby which can really add up in a hurry. Many classic cars are priced in the $20,000-$30,000 range, explains Nationwide Insurance. But when you factor in restoration work, maintenance and storage, it can be much more. Classic car collector Mark Purtell says a 1965 Ford Mustang can easily cost $15,000 to restore, while a Corvette from the same era could be as much as $60,000. 

    A couple of other examples of hobbyists who should consider insurance are hardcore gamers with $10,000 gaming setups, golfers with $2,500 drivers and rare coin collectors. Coin collecting resource CoinSite points out that a single rare coin can easily be worth $5,000 with some topping out at around $30,000. 

    The point here is there are many high-priced hobbies where people are investing a lot of money, and there’s a substantial market for insuring these hobbies. As an independent agent, it’s important that you know how to cater to hobbyists.

     
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    How to Initiate This Conversation with a Customer

    The success as an independent agent is heavily reliant on strong customer relationships. Although roughly half of modern insurance shoppers look for quotes online, only 25 percent actually complete their purchase online. A full one-half complete the sale directly through an agent, says Nahu Ghebremichael at NerdWallet. 

    This shows you just how much people still value the one-one-one interaction they get with an independent agent. Having solid relationships with customers is vital for sparking the the topic of hobby insurance. 

    Ideally, you’ll already know a customer on a personal level and have an idea of their basic interests, as this will help you segue into discussing any hobbies they’re into. 

    Say you’ve got a customer who’s been buying homeowners insurance for years. You may get into a conversation about hobbies where they mention they’re an avid coin collector and that it’s something they’re passionate about. This would be the perfect opportunity to mention that a coin collection can be insured, which they may not have known about previously. 

    But what about new customers with whom you’re just beginning to develop rapport?

    In this situation, you’ll want to casually mention hobby insurance at a key moment. When they’re buying homeowners insurance, you might explain that it covers basic personal belongings but won’t usually cover the full value of more expensive possessions. Insurance writer Katelyn Betts says home insurance covers personal items such as furniture, clothes and electronics, but not high priced valuables that a hobbyist might own like silver or jewelry. 

    The bottom line is that it really pays to know your customers and develop relationships that transcend beyond just selling insurance. Not only does this create more meaningful interactions, it often leads to opportunities for suggesting additional coverage they could benefit from. 

     

    How to Get Hobby Insurance on a Customer’s Radar

    Getting hobbyists to think about insurance largely boils down to education. Insurance is a complicated subject with a lot of terms and jargon many people don’t take the time to understand. As a result, customers may not know how insuring hobbies works and the options they have. 

    Your job as an independent agent is to fill them in on the details and present the information in a way that’s easy to understand. You want to play the role of trusted advisor rather than merely a salesman, says the Insurance Office of America

    A consultative sales approach tends to work well for this type of situation. “As the name implies, consultative sales is about playing the role of a consultant — an expert ready to give advice,” writes Troy Wilson, CEO of AgedLeadStore. “With this approach, elevator pitches and stump speeches take a back seat, so that you can use your time with your prospect to ask pointed questions and listen actively to the responses.”

    Wilson also recommends incorporating storytelling where you create a strong narrative. Perhaps you mention how a winemaker would go about protecting their valuable wine press and mention how the comprehensive coverage vastly outweighs the added expenditure. 

    This makes it easier for a prospect to relate to what you’re saying and lets them see how insuring hobbies works in a real life setting. 

    Male golfer and partners happy for successful putt on the green.
     

    What Insurance Products to Offer

    Hobbyists can be broken down into two main categories — collectors and enthusiasts. The category a person falls into will dictate the type of coverage you suggest. 

    “With collectors, the focus should be placed on the nature of the property being acquired,” explains Jennifer Elliott at Smart Insurance. “With enthusiasts, besides attention to the property exposure, there should be equal emphasis on the liability exposure that is inherent in their activity.”

    Traditional homeowners insurance is often insufficient for collectors who need to protect their property because items like rare coins, stamps, art and antiques are usually fragile. Also, the actual value of collectibles stored in one room might be more valuable than the rest of a home’s contents, Elliott adds. 

    While standard home insurance may cover a loss of art and collectibles up to a certain amount of money, it’s limited and is unlikely to be adequate for the needs of serious hobbyists. It simply isn’t meant to cover highly valuable property that can be easily destroyed and is vulnerable to theft. 

    To protect these assets, you’ll want to suggest four particular types of coverage. 

     

    1. An Endorsement

    Also known as a rider, this is an addition to a homeowners policy used to cover items that otherwise wouldn’t be covered for their full value. The purpose is to increase coverage limits, writes insurance broker, Mila Araujo — something that’s perfect for insuring expensive hobbies. 

     

    2. Floater Insurance 

    Floater insurance is coverage that protects property that’s easily movable and goes way beyond what regular policies offer, explains Julia Kagan, personal finance editor at Investopedia. Adding this type of policy insures a hobbyist for the full value of their collection. The caveat, Kagan adds, is that a floater policy typically only covers one individual item, meaning a customer may need to get multiple floaters if they’re looking to insure several items. 

     

    3. Specialty Coverage

    There’s also specialty coverage designed for protecting items that are special or unique, says the team at Ameriprise Insurance. Classic car insurance is a good example of specialty coverage, which is ideal for someone who’s invested a lot of time and money into restoring a classic car. 

    It also applies to valuable collectibles, adds Florida-based insurance company, Dunham Insurance. Everything from vintage guns to antiques can be covered with specialty insurance. 

     

    4. Liability Coverage for Hands-On Hobbies 

    Though not usually necessary for collectors, adding liability coverage can make sense for certain enthusiasts where liability exposure is part of their activity, says Elliott. For instance, if the hobby has potential hazards or involves any equipment that could be dangerous to others, liability coverage should be considered. Hobbyists who travel to meets frequently or give advice online are other examples of customers who should purchase liability coverage. The coverage would protect the hobbyist against lawsuits or claims they may face as the result of an accident and any bodily injury or property damage.

    Lastly, insuring hobbies is both a business opportunity and a chance to get to know your customers. Understanding and protecting their interests is a win for all parties.

     

     
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