I spend so much time talking about cards to speculate on, and the latest EDH trends, that I sometimes neglect to mention the importance of applying personal and professional experiences to the game. To try to connect my career and my passion for Magic, I decided to write a two-part series highlighting the importance of insurance and how we can best position ourselves to protect our Magic: the Gathering collections.
I did some research on the topic and quickly realized the MTG community is underutilizing insurance as a means of protecting ourselves. In fact, after reviewing my condo-owners policy, I realized how little my personal collection was covered for. It would likely get excluded from reimbursement in the event of a loss, or at best receive about 10% of the total value after depreciation is factored in.
Upon further examination of a variety of major insurance company policy declaration pages, I realized trading cards in general (Magic, Pokémon, sports cards, etc.) are typically excluded or reimbursed at a significantly deprecated value.
To put my money where my mouth is, I ended up going out and buying a collectibles insurance policy from Collect Insure in response to my findings for these articles. In fact, Collect Insure was kind enough to take an interview with me where we discussed the policy I purchased, the collectibles insurance industry, and the general lack of awareness the average collector has towards protecting their collection.
Before diving into the buying experience and my interview with Collect Insure, I want to focus on the importance of insurance and share a personal experience from my life which shaped my perception towards insurance at an early age.
Disclosure before going any further: I am licensed to sell insurance but I do not sell for any company currently (I work on the corporate side), so please make sure to review your own situation with a licensed insurance agent. We will cover this in more detail, but I highly recommend reviewing insurance options and your current protection for your trading cards if you are in possession of a collection valued at $5,000 or more.
Realizing the Importance of Insurance
My career began in 2006 when I got a job over the summer working for my Mom's insurance agency in the southwest Chicago suburbs. I had my driver's license by this point and I was fortunate enough to have a hand-me-down van from my parents.
About three weeks into my career two life-changing events happened:
- I got my first paycheck
- I got into a car accident
The paycheck meant the world to me. It was the first time I felt independent and it was validation that I could handle the world on my own someday. It also taught me the value of money at a young age and how important a good work ethic is in life. From that moment on, my parents viewed me as part of the working class. They certainly continued to help me out financially through college (thank you, Mom and Dad!) but it was monumental for them as well because it meant I was ready to face the full responsibilities of adulthood in a few short years.
The car accident was a more significant and impactful moment for me. I always found it ironic that I got in a car accident right after starting my career in the auto and home insurance industry (also referred to as Property & Casualty, or P&C). I didn't know much about insurance yet and I hadn't been driving for very long when it happened. To this day, the memory of the accident still plays vividly in my mind.
Safety Belts, Air Bags, and Impact
I can visualize the moment my car connected with the other car like it was yesterday, and I can remember the face of the truck driver who waved me out as clearly as a picture on a high-def TV.
I was pulling out of the office parking lot during my lunch break, trying to turn left at a busy intersection. Weather was clear—sunny in fact—and there weren't any abnormal or dangerous conditions to blame. Traffic in the near lane to me was backed up as far as I could see, and there was a semi truck blocking my vision into the second lane which I needed to cross to complete my turn.
The truck driver signaled for me to pull up so I could see around him, but it was too difficult to do so without the nose of my van pushing into the second lane. I motioned to him that I couldn't see, so he checked his side mirror once... twice... then waved an "okay" as if he were motioning me to come over and greet him. The next thing I remember was tapping my accelerator as I used one hand to signal "thank you" back to the truck driv... BAM...
I had just been hit on my front left driver's side bumper by a car I would later learn was going an estimated 60 miles an hour in a 30 zone.
Am I okay? Are THEY okay?
Survival instincts kicked in immediately. I was a little dazed and confused; maybe even in shock. But the adrenaline rush had me focused pretty quickly and I began assessing the car that hit me. I could see their airbags had gone off and there was no damage to their windshield which told me the passenger(s) hadn't been ejected.
I need to help them.
As I got out of my car, the truck driver and others were already out of their vehicles checking on the other car's passengers... there were two people in the car. I was fine. They were... fine. Unscathed despite their four-door Toyota Camry being totaled.
Safety belts and airbags. They had been wearing their seat belts and their airbags worked perfectly to cushion the impact. Their injuries would end up being relatively minor compared to what could have happened, and it reinforced for me the importance of wearing seat belts while driving.
What am I going to do about my car? Their car? My parents are going to be furious.
"Sir, can I have your license and insurance please?" the first police officer on the scene questioned me.
That incident would be my first experience with car insurance claims, and still represents one of the main catalysts for my passion towards maintaining a career in insurance. I realized after that experience how important protecting and insuring peoples' livelihood truly is. I've stayed with my career in insurance for the better part of 12 years as a result (including time before graduating college, of course).
Connecting Magic and Insurance
When I think back on that accident and what could have happened, one thing is very clear: the financial (and human) impact could have been devastating. By definition, P&C insurance is designed to bring you back to the state you were in financially before a loss occurs. It is not setup such that people can profit from it, although many do try (Google "insurance fraud stories" and you can read about some very interesting criminal cases about how not to treat insurance).
In theory, the purpose of insurance sounds great; the unfortunate challenge faced by society is that not everyone carries enough insurance to cover the maximum probable loss (MPL)—the most money that can be lost in any one given insured loss event. In some cases, people will even drive (illegally) without insurance.
Some of the saddest stories in the insurance industry are those where families either cannot afford insurance and sustain a major loss, or are victims of an irresponsible party operating without insurance. In my story, I was deemed at-fault for the accident (though the car that hit me got a speeding ticket). Had I not been insured, that accident would have cost my family and I roughly $50,000 in out-of-pocket losses. Instead, we paid a $1,000 deductible and the insurance company covered the rest.
Think about all the times we as a community have seen or heard about MTG collections being stolen while at Friday Night Magic, tournaments, or even just a casual date with the playgroup. These are devastating experiences for everyone, and it pains the community because we are generally such a welcoming and trustworthy group of individuals. With insurance, these experiences (despite still terrible) can have a mildly happier outcome where the victim gets to recoup an amount from their insurance company to put towards rebuilding what they have lost.
Deductibles are the amount on an insurance policy that insurance companies will require the insured to pay when a loss occurs. The deductible is one of the most influential parts of an insurance policy (and important as I connect insurance to Magic) because the deductible is the value that insurance companies use to deter the frequency of insurance claims. In other words, deductibles are a driving factor for keeping insurance prices lower than they would be otherwise.
Imagine a scenario where you didn't have any financial responsibility when you experience a covered loss: for example, let's say you left your $500 lawnmower outside and someone stole it. If you didn't have any deductible you could file a claim for this loss with your insurer and they would reimburse you in full for the stolen lawnmower.
In this case, what incentive would there be for you to lock up that lawnmower in the future? Deductibles encourage people to better care for their belongings. In turn, this helps suppress the number of small insurance claims, which can help keep insurance prices lower.
Protecting Valuables from Common Forms of Loss
I mention deductibles because they should be a major factor in insuring your Magic collection. Theft and fire are the most likely causes of loss tied to a Magic: the Gathering collection. On most homeowners policies, both theft and fire are named perils, meaning they are types of losses which would be covered.
On a homeowners policy you can add scheduled personal property (SPP) to give yourself additional declared coverage for valuables or unique personal property which would otherwise be excluded or insured for a depreciated value. For example, if your wedding ring is stolen, you may be compensated for only a fraction of the replacement value, or not at all. Declaring it directly in an SPP ensures you're covered for the full value.
Most SPP policies will require proof of appraisal as part of the scheduling process; this allows the insurance company to confirm the item(s) they are covering actually exist and are of the value the insured is requesting. The most common valuables requiring an SPP policy are wedding and engagement rings, musical instruments, furs, and collectibles (art, watches, guns, coins, etc.).
SPP policies can typically be purchased as an endorsement (think add-on) to your homeowners (or renters or condo) policy; you will usually have to pay an increase in your premium to get this type of coverage. However, in some cases you may have to buy the SPP as a stand-alone policy. A standalone SPP policy is necessary if your primary insurance company will not cover the item(s) you are trying to insure.
We'll discuss this more in the context of insuring Magic collections. As previously mentioned, based on my research the majority of SPP endorsements offered by major insurance companies (Allstate, GEICO, State Farm, etc.) do not insure trading cards of any kind.
In Part 2 of this series, I am going to discuss more about how to acquire collectibles insurance for trading card collections. Without a policy in place, the best thing we can do is try to prevent things like fire and theft from happening. While our community talks about this on occasion, some really simple things often get overlooked.
For example, if you use a fire-proof safe for your most expensive Magic cards, I hope you are keeping the cards themselves out of plastic cases (default to glass or metal if you must use something). Crazy as it might sound, the plastic top-loaders and penny sleeves we are used to using for protecting cards in-transit or at-rest can melt at high heats and ruin the cards without them ever being touched by flame. Be careful about leaving your Magic cards in hot cars while in top-loaders for the same reason.
Another simple loss prevention tool to consider is writing your name on everything except the cards themselves. Certainly the sleeves and cards have to stay unmarked for playing purposes, but you can write your name on everything else. This is helpful for immediate identification of collections should the thief try to resell the cards quickly. Of course, if they dispose of everything but the cards and sleeves, you will be in a tough spot tracking them down, but this can be a good deterrent nonetheless.
Finally, I encourage everyone to put a lock on your backpack when you are transporting pieces of your collection to tournaments or your LGS. It is inevitable that we will all bring our valuable pieces of our collection out once in a while (heck, many EDH, Modern, Legacy, and Vintage decks are a down-payment on a car or house these days). If you are going to transport one or more of these types of valuables without insurance, locking them up and keeping them in your bag at all times other than when they're on your playmat can help you reduce risk.
Unfortunately, like everything in the world, loss prevention guarantees nothing more than your best effort at minimizing your loss exposure. It does not eliminate your risk entirely—thus another reason why I advocate for collectibles insurance, especially for larger collections over $5,000 in value.
For Part 1 of this two-part series, I focused on why insurance is such an important facet of our lives and highlighted some of the connections to Magic: the Gathering. I wanted to draw awareness to the fact that most standard homeowners policies do not provide sufficient coverage (if any) for trading card collections.
If you take nothing else away from this article, please just do me the favor of consulting with your insurance agent about your own trading card collection and what coverage you have in place. I suggest anyone with a collection of trading cards valued at $5,000 or more evaluate their insurance options and consider purchasing a collectibles insurance policy.
I'll be back next week to discuss in greater detail the options available to protect our trading card collections. I'll cover my own experience identifying a gap in my collection's coverage and the process I took to close that gap with a new insurance policy.
If you have any questions or would like more information, feel free to reach out to me. As mentioned in my opening disclosure, I am licensed in insurance but I do not sell on behalf of any companies because of my corporate career. I maintain my license as a means of staying current with the agency side of the industry—not to sell insurance.
I will always suggest reaching out to your own insurance agent with questions about your situation, but I am more than happy to provide advice in the meantime.
Update: Insuring Your Magic Collection: Part 2 is live! Check it out!
You can always reach me on Twitter @ChiStyleGaming or on the QS Discord with questions!