Asset Insurance: Heirlooms to NFTs

Imagine inheriting your grandmother’s rare stamp collection or buying your first NFT – how do you protect them? If you’re acting under the assumption that your precious items are covered by your homeowners insurance policy (they might be) or your umbrella policy (they’re not), you’d be wise to dig a bit deeper to verify coverage. 

In this article, we’ll talk about asset insurance for the unusual, intangible, and extraordinary! Let’s jump in by defining “asset” and unpacking what we mean by “unconventional.”

What is an Asset in Insurance?

In the context of insurance, an asset is any item of value that you or your business owns that you want to protect against loss, damage, or liability. Assets can be tangible (physical things like buildings, vehicles, or equipment) or intangible (like intellectual property or digital assets).

Insurers define an asset as something that can be assigned a value and potentially replaced, repaired, or reimbursed if covered under a policy. The purpose of insurance to protect assets is to transfer the financial risk of loss or damage to the insurance provider.

What does asset protection insurance cover? Well, asset protection insurance isn’t a single policy, but rather a strategy using multiple types of coverage to protect what you own from lawsuits, accidents, and unexpected losses. So, asset protection is a factor in homeowners, auto, business, landlord and rental property insurance policies. 

What Is an Unconventional (or Unusual) Asset in Insurance?

From an insurance perspective, an unconventional or unusual asset refers to any item that falls outside the scope of standard coverage due to its unique nature, difficulty to appraise, or lack of traditional insurability. These assets typically require specialized underwriting, custom policies, or endorsements, as they pose higher risks or valuation challenges.

Examples of Unconventional Assets:

• Fine Art, Antiques, Rare Collectibles – Require expert appraisal and custom policies due to their uniqueness and value.

• Cryptocurrency – Highly volatile and subject to cyber theft; often excluded from traditional property policies.

• Non-Fungible Tokens (NFTs) – Digital collectibles stored on the blockchain with no physical form, making them hard to insure due to valuation complexity and evolving regulations.

• Intellectual Property – Includes patents, trademarks, and copyrights, which are typically covered under IP-specific insurance products.

• Exotic Animals or Livestock – May be excluded from standard homeowners or farm policies due to liability and replacement costs.

• Celebrity Body Parts or Voice – For example, a famous singer insuring their vocal cords or a model insuring their legs.

• High-Value Memorabilia – Such as signed sports gear, rare movie props, or one-of-a-kind heirlooms.

• Space Assets or Satellites – Insured under aerospace-specific policies with complex risk modeling.

These assets are considered unconventional because they are, of course:

• Difficult to appraise or replace
• High market volatility or niche demand
• Emerging asset class (like NFTs or crypto)
• Limited historical data for underwriting
• Often excluded from standard policies

How Homeowners Insurance Handles Unique Valuables

Homeowners insurance typically covers unique valuables like jewelry, fine art, or collectibles under the personal property section – but only up to certain sub-limits, often $1,000 to $2,500 per item. Because these items are high in value or hard to replace, standard coverage usually isn’t enough. 

So, what insurance protects your assets of higher value? For these you need scheduled personal property endorsements, also known as floaters. We’ll cover more on this later. First, let’s cover why umbrella insurance doesn’t provide this type of coverage.

Why an Umbrella Policy Won’t Cover Unique Valuables

An umbrella policy doesn’t cover the types of valuables we’re discussing here because it’s designed to provide excess liability protection, not property protection. 

Umbrella coverage kicks in when you’re held legally responsible for injury or damage to others, and the costs exceed the limits of your primary policies – like homeowners or auto insurance. It does not cover the loss, damage, or theft of your own belongings, including high-value items like jewelry, artwork, or collectibles. That’s because valuables are considered property, not a liability risk. 

Umbrella insurance is structured to protect your personal assets – such as savings or investments – from being wiped out in a major lawsuit, but it won’t pay to repair or replace the things you own. 

What Does Scheduled Personal Property Coverage Include?

Scheduled personal property coverage, sometimes referred to as heirloom insurance, is an add-on (also known as a rider) to your homeowners policy that provides expanded protection for high-value items that exceed standard coverage limits. To ensure your valuable items are fully protected, you must keep appraisals current and understand what’s excluded to avoid surprises.

Commonly Scheduled Items:

• Jewelry and engagement rings
• Fine art and antiques
• Family heirlooms
• Collectibles (coins, stamps, sports memorabilia)
• Firearms
• Musical instruments
• Designer handbags
• Rare wine collections

What’s Covered:

• Appraised value of each listed item
• Accidental damage (e.g., dropping a diamond ring)
• Theft or mysterious disappearance
• Fire, vandalism, and other standard perils
• Worldwide protection (items are covered even while traveling)
• No deductible in most cases

What’s Not Covered:

• Wear and tear or gradual deterioration
• Damage from pests (e.g., moths in a fur coat)
• Manufacturing defects
• Unscheduled or unlisted items
• Losses exceeding the appraised value

Types of Asset Insurance for Unconventional Items 

So how do you go about managing insurance for assets that are uncustomary, avant-garde, or digital? Can you insure an NFT, for example? What about IP, or crypto currency? 

Some items require bespoke insurance issued by specialty insurers, high-net-worth insurance providers, or companies that are equipped to underwrite non-standard or high-risk policies with customized terms. For less extreme examples, there are some more standard policies, such as: 

Cyber Liability & Digital Asset Insurance

Cyber liability insurance and digital asset insurance are related but distinct types of coverage that often complement each other. 

Cyber liability insurance protects against the financial fallout of cyber incidents – like data breaches, ransomware, or unauthorized access – by covering legal fees, recovery costs, and reputational damage. While it may indirectly involve digital assets like NFTs, it does not cover the value of the assets themselves. 

That’s where digital asset insurance (including NFT insurance) comes in. This coverage is designed to protect the actual value of digital holdings – such as crypto or NFTs – against risks like theft, hacking, or platform failures. 

In short, cyber liability covers cyberattacks and response costs; digital asset/NFT insurance covers the value of digital property. They address different risks but work well together for full digital protection.

Specialized IP or Professional Coverage 

If you rely on intellectual property (IP) like patents, trademarks, or copyrighted content for income, IP insurance can protect against infringement claims, legal disputes, or loss of value.

Similarly, celebrity body part or professional risk insurance falls under specialty coverage. These policies are customized to protect against loss of income or career disruption if the covered feature or skill is lost or impaired.

How to Insure Unconventional Valuables & Heirlooms

1. Take Inventory
   List all high-value, unique, or sentimental items (e.g., antiques, art, collectibles, heirloom jewelry). Include descriptions, acquisition dates, estimated values, and photos.

2. Get Professional Appraisals
   Have each item evaluated by a qualified appraiser to establish accurate replacement value. Keep appraisal documents for your records and insurance use.

3. Review Your Existing Coverage
   Look over your homeowners or renters insurance policy for coverage limits and exclusions. Note any sub-limits for categories like jewelry, artwork, or collectibles.

4. Talk with Your Insurance Provider
   Share your inventory and appraisals with your agent or provider. Ask whether you need to schedule items, add a rider, or consider specialty coverage for full protection.

5. Make Coverage Adjustments Based
   Work with your provider to customize your policy for adequate protection. This may include policy endorsements, increased limits, or connecting with a specialty insurer.

6. Keep Records Updated
   Reappraise items periodically and update your inventory as you acquire, sell, or pass down valuables. Keep your insurer informed of any changes to ensure ongoing coverage.

Make sure your valuables are adequately insured! Contact us to speak with a member of our team about your unconventional assets and heirlooms. We are here to help.