Would you buy a fridge for R1 million? What about a stand mixer for more than R37 000, or perhaps a toaster for over R12 000? Or an everyday shoe for over R7000? You can but remember to insure it.
Mattel and Balmain, Crocs and Balenciaga, Smeg and Dolce & Gabbana… These are just some of the high-end collaborations that are seeing ordinary and everyday fashion and homeware items turned into one-of-a-kind objects of desire, available at a very hefty price tag to South Africans.
“In recent times we have seen toasters, kettles, dolls and shoes sell for astronomical amounts. These are not simply ordinary items, they are white-labelled designer goods, meaning reputable brands collaborate with designers to create unique pieces,” explains Tarina Vlok, MD at Elite Risk. “Love them or hate them, while these pieces create interest because of their exclusivity, they also come with common insurance pitfalls for the buyer, if insurance is not carefully considered,” says Vlok.
Smeg collaborated with Dolce and Gabbana to create the “Sicily is my Love” collection, with the fridge in this range selling for a whopping R1 million in a popular South African homeware store. Mattel collaborated with Balmain to create a Barbie collection, all in pink. Although there are no dolls available yet in South Africa, watch this space and consider the cost of a high-end luxury branded doll – anywhere from R6000 to R22 000. Then Balenciaga collaborated with Crocs to create a shoe collection, with prices well over R5 000 for a pair of high-heeled Crocs. While there are endless lists of high-end designer collaborations, can they be insured, given that they are simply ordinary items wrapped up in exclusivity?
“Yes, absolutely,” says Vlok. “These pieces are expensive because they are rare and unique, and because many of these are bought to be used in homes rather than for investment purposes, they should be protected against sudden and accidental losses.”
She says one issue that many individuals face when buying an item is insuring it at the bought-for value, rather than the replacement value, “and price shifts may mean the difference in the two values could be significant, locking in huge financial losses if putting in a claim.”
She adds that it is important to remember that if a loss does occur with a limited-edition item, it may not be possible to replace it.
“Remember that the insurer will always try to put you in the position you where before a loss occurred, but we may not be able to. In these cases, it is best to accept cash settlement,” says Vlok.
Whether you a fashionista, home décor extraordinaire, or a collector with an eye for unique items, below are Vlok’s top insurance tips to consider:
- Always insure them at their replacement value, which is the price it would cost you to insure with a new similar item.
- For extremely expensive items like the Smeg fridge, it is best to inform your broker that the item is included in your contents sum insured.
- Ensure that you are insured with an insurer who understands your sophisticated insurance needs. Find out about cover for power surge, especially with load shedding being here to stay for the foreseeable future.
- Remember that the insurer will always try to put you in the position you where before a loss occurred, but in the case of these limited-edition items, we may not be able to. In these cases, it is best to accept cash settlement.