Is My $2.3 Million Tom Brady Rookie Covered by My Homeowners Insurance Policy?
When the news of Tom Brady’s retirement spread in late January, eBay reported that its site saw a 198% increase in Tom Brady collectible sales. User searches for Brady rookie cards increased 273% as sports fans and collectors sought to get their hands on a “piece” of Brady as investments or collectibles.
Topping it off was a single sale of his 2000 Contenders Rookie Championship Ticket for $2.3 million. This card was limited to 100 copies, and its condition was independently graded 8.5 out of a 10. But would your homeowners insurance company replace the card or pay you its value in cash if it was somehow damaged or lost in transit? Would your insurer replace the card if it was destroyed or lost in water, fire, or theft claim? The answer to these questions is likely “No.”
Most homeowners or renter policies provide policy limits for damage to your Personal Property in the event of a covered loss. This coverage provides for actual or replacement value of many items in your home, like clothing, accessories, and other household items. The coverage amounts can range wildly depending on how much coverage you’ve selected. For example, if your $2.3 million Tom Brady rookie was destroyed in a covered loss, it’s possible your policy would cover a portion of the card, but the portion could be far lower than the value of the card.
For example, you may have $2 million in Personal Property coverage under a policy, and you would assume that your carrier would pay you $2 million if your Brady rookie was destroyed in a covered loss. But likely hidden within your policy is a sublimit (also referred to as “Special Limits of Liability”) for certain types of personal property – like sports cards. These limits do not increase the coverage for Personal Property but instead are used as a sword by insurance companies to cut the amount it will pay for specific items, including sports cards. Under a standard policy issued by State Farm – the USA’s largest homeowners insurance provider – the special limit for stamps, trading cards, and comic books is $2.5 million. This means the most State Farm will pay for a Brady rookie would be $2,500, or 0.001% of its fair market value.
A buyer of a $2.3 million sports card should certainly have their collection insured with a separate policy (also known by many insurers as a “Personal Articles Policy” or a rider) with their homeowners carrier or through a specialty insurance line. These policies provide coverage for specific items or a group of items like a collection. If you have made sports card buying and selling into a business, you should also make sure you have the appropriate amount of coverage for business personal property and specifically request that your broker find you a policy that insures your valuable rookie cards and collectibles in the event of a loss.
