You insure for a certain amount. If you belong to the APS, check out the contract insurance carrier. Give them a call to discuss your needs. Don't go by what other people may tell you regarding as to what they pay and what their coverage is, except as a very rough estimate. What you would actually pay for a premium and what coverage you get will depend on your circumstances.
I'm not a dealer. I was asked how insurance would work for a dealer whose inventory would change frequently and figured someone here would know. Thanks Michael!
Insurance premiums for dealers is higher than for collectors. Since the insurance policy is for a dealer, I'm sure the changing inventory is considered in the premiums and coverage.
The last time I checked for coverage, one of the first questions I was asked is, "Do you sell stamps?" I answered that I did to sell off duplicates. That put me in the dealer category.
If a stamp dealer files his taxes with an inventory figure rather than carrying a -0- balance and using cash in and cash out then the inventory figure carried on his taxes and his day to day accounting would serve as a "checks and balances" figure. Michael is correct that when you purchase insurance it is for a set amount.Thinking back to when I had dealer insurance I believe that if a dealer were to make a substantial purchase, say a few thousand dollars, a phone call to increase the amount was required. If a loss was incurred you would obviously have to provide back up paperwork for the purchase.
And as Michael said, dealer insurance is a lot more expensive than a rider to your homeowner's policy. If memory serves I think I paid over $200 for 10 or 12 thousand dollars of insurance. Keep in mind that riders to your homeowners policy will probably require proof of value and ownership if you file a claim.
Even if you are not a "dealer" you should be keeping records of your purchases if you plan on selling your collection some day and it has a substantial value. Say you sell your collection at auction for $10,000 - the auction house will issue you a form 1099. A copy of that form goes to the government. They will look for that money to be on your tax form either as a business sale or as a capital gain or loss. If you have no paperwork and it is a capital gain I believe that it is taxed at a higher rate (used to be 28% when the normal rate was 15% - have no clue as to how the regulations may have changed).
A good friend is still paying off his capital gains tax due from many years ago as the result of an unreported Sothebys sale.
Very interesting. Thanks for the information
Do stamp dealers carry insurance on their stamp stock? How is the insurance coverage determined - I would imagine that their stock changes frequently. Do they just carry a certain dollar amount? How do they prove loss in the event they need to file a claim?
Is it easier for larger companies like Mystic who may have staff to document what is in stock and what is sold? How would a regular small time dealer handle it?
re: Insurance for Stamp Dealers
You insure for a certain amount. If you belong to the APS, check out the contract insurance carrier. Give them a call to discuss your needs. Don't go by what other people may tell you regarding as to what they pay and what their coverage is, except as a very rough estimate. What you would actually pay for a premium and what coverage you get will depend on your circumstances.
re: Insurance for Stamp Dealers
I'm not a dealer. I was asked how insurance would work for a dealer whose inventory would change frequently and figured someone here would know. Thanks Michael!
re: Insurance for Stamp Dealers
Insurance premiums for dealers is higher than for collectors. Since the insurance policy is for a dealer, I'm sure the changing inventory is considered in the premiums and coverage.
The last time I checked for coverage, one of the first questions I was asked is, "Do you sell stamps?" I answered that I did to sell off duplicates. That put me in the dealer category.
re: Insurance for Stamp Dealers
If a stamp dealer files his taxes with an inventory figure rather than carrying a -0- balance and using cash in and cash out then the inventory figure carried on his taxes and his day to day accounting would serve as a "checks and balances" figure. Michael is correct that when you purchase insurance it is for a set amount.Thinking back to when I had dealer insurance I believe that if a dealer were to make a substantial purchase, say a few thousand dollars, a phone call to increase the amount was required. If a loss was incurred you would obviously have to provide back up paperwork for the purchase.
And as Michael said, dealer insurance is a lot more expensive than a rider to your homeowner's policy. If memory serves I think I paid over $200 for 10 or 12 thousand dollars of insurance. Keep in mind that riders to your homeowners policy will probably require proof of value and ownership if you file a claim.
Even if you are not a "dealer" you should be keeping records of your purchases if you plan on selling your collection some day and it has a substantial value. Say you sell your collection at auction for $10,000 - the auction house will issue you a form 1099. A copy of that form goes to the government. They will look for that money to be on your tax form either as a business sale or as a capital gain or loss. If you have no paperwork and it is a capital gain I believe that it is taxed at a higher rate (used to be 28% when the normal rate was 15% - have no clue as to how the regulations may have changed).
A good friend is still paying off his capital gains tax due from many years ago as the result of an unreported Sothebys sale.
re: Insurance for Stamp Dealers
Very interesting. Thanks for the information