Special Insurance for Designer Clothes
Dolce & Gabbana is an Italian fashion house. Oscar de la Renta is a fashion designer. Hermès. Marc Jacobs is a designer. Chanel. If you have this much opulent designer clothing in your closet, you're probably a serious fashionista—and you should call your insurance agent right away.
Why? Because if your house burns down, is swept away by a flood, or is raided by fashion-obsessed robbers, standard homeowners insurance will not cover your high-priced garments and elegant accessories. You'll need specialized designer wardrobe insurance to protect your couture collection.
Who Needs Clothing Insurance?
Unlike other collectibles such as art, jewelry, and antiques, clothing, shoes, and handbags are typically lumped into the household contents category by insurance companies. These items, such as floods, moth damage, and mold, are subject to high deductibles and a slew of limits and exclusions.
Of course, furs can and frequently are itemized on a policy rider or floater. However, if you're a designer-clothing connoisseur, you know that even a simple sundress can cost as much as a fun fur—several thousand dollars. Let's not even get started on the haute couture gown you purchased for last year's charity gala.
In other words, if your closet is overflowing with designer clothes, handbags, shoes, and furs, the contents of that walk-in could easily exceed a million dollars. That is, of course, assuming you only have one designer-adorned closet. With the vacation home and the pied-Ã -terre, you could be looking at $1.5 million.
So, how do you safeguard your extensive and costly wardrobe? Fortunately, there is a product for that.
Avoid a Fashion Wipeout
In September 2015, AIG Private Client Group launched a wearable collections coverage. This specialized insurance solution is intended to protect couture and designer clothing, which, as previously stated, is not covered by most homeowners insurance policies.
"Customers who invest in their wardrobes, like collectors of fine art, vintage cars, or wine, can be quite passionate about their acquisitions," said Ron Fiamma, vice president and global head of private collections for AIG Private Client Group. "Our new couture solution closes the gaps in a traditional homeowners policy and enables us to proactively mitigate risks for these collections to help safeguard these items."
How It Started
AIG collaborated with Garde Robe Online (an apparel storage and preservation service) to identify coverage features and create a comprehensive insurance solution for collectors of designer wardrobes.
Doug Greenberg, the owner of Garde Robe Online, created the product. When he noticed that the majority of his Garde Robe clients turned down the company's offered insurance on clothes stored in its facilities, he approached insurance underwriters and suggested the product.
AIG created the policy after sending underwriters to fashion designers' studios to learn about the materials and craftsmanship involved. It also included interviews with Garde Robe's clients. As a result, a one-of-a-kind insurance solution that recognizes the value placed on the skilled craftsmanship and fine detail of high-end designer fashions and accessories, many of which may be one-of-a-kind or custom-made, was created.
What’s Covered?
Couture (also known as made-to-measure) and ready-to-wear garments are covered by AIG's couture collection insurance, as are:
- Vintage garments
- Shoes
- Handbags
- Other accessories
- Celebrity clothing
Floods, earthquakes, mold, moths, and other vermin, as well as accidents, are all covered under the policy. These are some of the risks that are frequently excluded from standard homeowner policies.
Custom, work-in-progress couture, and shoes are all covered under AIG's couture collection policy. It also reimburses you for expenses incurred if you decide to remove your designer wardrobe from your home prior to a potential threat. And your clothing is protected all over the world—even while in transit. This means you won't have to worry about your couture-filled Louis Vuitton leather suitcase when you check it with a commercial airline.
When possible, the policy also covers garment repair or replacement. There is also a loss-in-value clause, which means that if a client's vintage Chanel suits are damaged in an earthquake, they can be compensated for the reduced value as well as any repairs.
To top it all off, AIG Private Client Group's in-house collection management specialists are on hand year-round to assist customers in preserving the long-term value of collectible garments, shoes, and handbags. The insurance policy covers a variety of services, such as vulnerability assessments, emergency planning, and referrals to wardrobe preservation specialists.
How Much Does It Cost?
If you have a designer wardrobe worth $1 million, the total starting premium for AIG's couture insurance would be approximately $3,000 per year. Of course, this is dependent on the potential risks to the clothes. Premiums vary and may be higher depending on where your clothing collection is located. For example, if your wardrobe is in a flood zone, a hurricane-prone area, or a rarely used vacation home, coverage will most likely be more expensive.
The AIG policy provides incentives to clients who use professional storage services that cover garments in breathable garment bags and store them in climate-controlled spaces. AIG offers couture coverage through its private collections policy, which includes benefits such as agreed-value coverage, no deductibles, and loss-in-value payments.
The Bottom Line
According to AIG, high-net-worth individuals (HWNIs) in the United States pay approximately $5 billion in annual insurance premiums, but only 20% of them are adequately insured. If you have a large collection of couture, you should consider designer wardrobe insurance. Remember that your homeowners' insurance is unlikely to cover your high-value garments. A single burst pipe or hungry moth family could cost you thousands, if not millions, of dollars if you do not have adequate coverage. Not to mention the fact that you have nothing to wear.