If you’ve ever tried to insure a rare trading card, a limited-edition sneaker, or a $10,000 designer handbag through a standard homeowners policy, you already know the answer:
It doesn’t work.
Most insurance products were designed for common items with predictable value and straightforward replacements. Collectibles and luxury items are different. Their value is based on scarcity, condition, and market demand, which means buyers and sellers are often left exposed to loss, theft, and damage with little to no protection.
Here’s why traditional insurance fails collectors, and what platforms can do to solve it.
Market Value Is Not the Same as Replacement Cost
Most insurance policies rely on “replacement cost” to determine value. This makes sense for mass-market goods like a TV or smartphone. But collectibles gain and lose value based on factors that don’t apply to retail products.
A traditional policy might pay $2,000 for a graded card purchased at $20,000, because it doesn’t consider its market appreciation. In many cases, the item must be appraised, scheduled, or added as a special rider to even qualify for coverage.
Where Traditional Insurance Options Fall Short
HOMEOWNER’S INSURANCE
Rare items typically aren’t covered.
Unless a high-value item is specifically listed in a policy, it is likely excluded from homeowners or renters insurance. And even when scheduled, many insurers don’t understand how to properly value or underwrite one-of-a-kind goods. That creates risk on all sides:- Buyers think they’re protected when they aren’t
- Sellers have no way to verify the item is insured
- Platforms get pulled into disputes and claims they aren’t equipped to handle
STANDARD SHIPPING INSURANCE
Shipping one-of-a-kind items creates a risk gap.
When a collectible or luxury item is in transit, standard coverage often stops short:
- Most carriers cap their liability at around $500 to $1,000
- Doorstep theft is usually excluded
- Claims processes are slow and favor the carrier
When a $7,000 designer handbag is stolen after delivery, someone takes the loss. Without proper coverage, it’s usually the seller, the buyer, or the platform that absorbs it.
Claims Are Slow and Frustrating
The collectibles and luxury goods market moves quickly. But traditional insurance moves slowly. Filing a claim often requires:- Original receipts and serial numbers
- Proof of depreciation or market value
- Police reports and follow-up documentation
The Better Alternative: Embedded, Specialized Coverage
Embedded collectibles and luxury insurance is offered directly at the point of sale or fulfillment. It gives buyers and sellers real protection in the flow of the transaction, not weeks later.
Plus, with the right partner, offers can be easily added to the checkout flow via API or drop-in UI components. There’s no need to build your own claims, compliance, or billing systems.
What buyers and sellers gain:
- Specialized insurance that reflects the real market value of each item
- Shipping protection that includes in-transit loss and doorstep theft
- Fast, fully digital claims experience
- A simple, white-label experience integrated directly into the checkout process
What platforms, marketplaces, and auction houses gain:
- Increased sales by reducing friction in high-value transactions
- Commission on every policy sold, generating a new high-margin revenue stream
- Reduced overhead by offloading customer support regarding lost, stolen, or damaged items
The Collectibles & Luxury Market Is Changing
This market is no longer a niche. High-value goods are being sold and traded online every day, and users expect modern protections to match. Unfortunately, traditional insurance has not kept up.
If your platform handles collectible or luxury goods, embedded insurance can reduce risk, improve trust, and generate revenue without increasing your fees.