06 August 2024
Elite Risk Acceptances
As Team South Africa’s athletes perform to secure at least four medals at the 2024 Paris Olympic Games, reports indicate that this year’s gold medals are likely to be the highest value of any gold medal in the history of the modern games, because of record high prices for the precious metal, surpassing the $708 (+- R13 000) record for the 2012 London Olympics medals.
“While the value of the medals is partially determined by the price of gold, the inclusion of Eiffel Tower pieces to this year’s medals may add significant collectible value to them in the future, which would make them coveted assets,” says Tarina Vlok, MD of Elite Risk Acceptances, a high-net-worth insurer and subsidiary of Old Mutual Insure.
In addition, she adds that the rising cost of gold will influence future values. According to reports, the gold price has risen by 23.43% in the past year, and historical graphs indicate that this trend is set to continue.
For collectors of unique and one-of-a-kind sports memorabilia, or even for star athletes wanting to look after their medals, especially those with historical significance and material uniqueness, what should they know?
“Unique items, with high sentimental value, and which cannot be replaced, should be insured on an agreed value basis. This value is often influenced by the rarity and significance of the item, meaning that it fluctuates. This is why it is important for owners or winners to have these items appraised regularly by a professional valuer with expertise in the specific class of collectibles, and who does not have a vested interest in purchasing the item,” says Vlok.
She adds that it is advisable to avoid valuers who charge a fee based on the value of the item.
Volk explains that there are typically two types of valuations: Fair market value, which is based on what a willing buyer would pay a willing seller, and retail replacement value, which is the highest amount required to replace the item with another of similar age, quality, and condition.
“Remember that when insuring the item, many general insurance policies will likely provide limited covers for valuables and collectables. It is therefore a good idea to seek cover with a specialist insurer who understands the intrinsic, historical, and sentimental value associated with the item.”
Vlok explains that the agreed value or sum insured of the collectible will also influence the terms and conditions required, such as safekeeping or exhibition of the item.
“Depending on the type of item, the storage of the item is also of importance. In the case of an Olympic medal, the winner may decide to frame it, or keep it in a locked safe for safekeeping. Whatever the storage method, the risk of theft, accidental or water damage must be considered, and all efforts made to avoid loss or damage,” says Vlok. “If the medal is to be worn in public, for example as part of a victory parade, the winner must ensure that the item is appropriately covered on an All-Risks basis. Excited fans can easily damage or even take such an important piece of memorabilia.”
She adds that items can, by their nature, be risky, for example, some tennis trophies that are made of crystal. “If they fell, the loss would be total.”
If you are a collector of valuable sports memorabilia or a winning athlete with a precious and rare medal collection, below Vlok recommends protections and measures to safeguard these items:
• If the item is displayed, an alarm is an added benefit to protect it against theft and likely to be a requirement of the insurer.
• If a fragile item is on display, secure it safely and protect it against the risk of accidental damage or breakage.
• When a medal is worn during a parade, never remove it from your neck or hand over to a fan to admire.