Katie Small, board director at insurance broker R K Harrison, on whether you should make inurance arrangements for clothes
Fashion’s rarely about playing it safe. Think mini-skirts and bikinis in the sixties, going out without a coat in January, six-inch heels, flappers showing off their knees… Even lounge suits were scandalous when they first appeared on the scene.
Risk is cool in fashion circles, which is maybe why so many people don’t think to make special insurance arrangements for their clothes, despite some quick fashion maths showing why they should. Even a fairly standard wardrobe can tot up to many thousands of pounds, but with one Savile Row suit costing upwards of £4,000 and a couture dress starting at £10,000, the totals quickly sky rocket. Assuming people have more than one of everything and you also include handbags and shoes, a wardrobe could easily add up to £250,000 or more.
Clothes are classed as personal effects and are usually covered under the general contents part of your policy. Fashionistas should check their policies though, as some have a limit of £2,500 for any one item, which isn’t going to be much good if you shop on Savile Row or at Chanel. What is important is that the limit on your policy is high enough to cover the lot – most high net worth policies will offer you new-for-old, so make sure that you’ve got enough cover to replace your wardrobe properly after a loss. You certainly don’t want to be visiting the high street to replace Hermes.
What insurance doesn’t cover is wear and tear – things like straps breaking, shoes needing re-heeling or fading from light exposure. Cashmere-munching moths, along with other vermin, are also usually excluded, though we have some high-end fashion designer clients who have proved to us that their clothes storage is so secure that they can get cover in this area. They really aren’t your standard wardrobes though.
The really big risks are when clothes leave the cupboards and venture out to be seen. Coats are a problem area; they are a wardrobe’s big ticket item, but they’re also the thing that you’re most likely to take off and leave somewhere. Even if that’s in a manned cloakroom it’s not 100% safe – you could easily end up with a ticket mix-up or an unscrupulous person in charge of the ticketing and security.
We regularly see examples of this with clients’ fur coats, which regularly cost £25,000 but can be as much as £50,000, and it’s a particular problem in ski resorts as hotel cloakrooms tend to be unmanned. A fur coat can be swiped and within fifteen minutes will be unidentifiable – criminals remove the sleeves and the lining, and send them off to be re-fashioned into different garments. They are impossible to trace once dismantled, and there is a lot of demand for the pelts as re-fashioned furs are very fashionable.
Fur’s high value mean the coats have to be specified individually under the valuables section of a policy, so if you do inherit one then make sure you tell your broker. If you have a large collection it can be cheaper to insure them separately. In those circumstances, often you’ll have a floating limit, which specifies how many can be taken out of storage at any one time. If you have a really large collection of handbags or vintage clothes, it can be worth looking at this approach for them too.
Like coats, handbags are another tricky item– they are often set down and people don’t watch them closely. Thieves will swap an expensive bag for a fake so the owner doesn’t notice until it’s too late. And while fashions have changed radically, certain styles of handbags (like Kelly bags and Chanel) are always in style and so there’s always a market for them.
It’s ironic really that insurance, an industry associated with grey suits and the risk averse, is an important building block for high-end wardrobes of avant-garde styles. It goes to show that maximum coverage doesn’t always mean maxi skirts, and that minimal cover can have more implications than chilly legs (sorry).
Happy Fashion Week everyone.
Katie Small is Head of Private Wealth for R K Harrison Insurance Services
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