I donated a $2,000 Methuselah (6L) of Cabernet to a charity gala. During the setup, a volunteer knocked it off the display table. Smash. The charity organizer looked at me with horror and asked, “Do you have another one?” I wanted to know: Does my insurance pay, or theirs?
Key Takeaways
- Insurable Interest Ends on Delivery: Generally, once you hand the item to the charity, you have “donated” it. You no longer own it. You cannot claim it on your insurance.
- The Charity’s “General Liability”: The charity should have “Special Event Insurance.” This covers damage to property in their care. They are the ones who need to file the claim.
- Tax Deduction Implications: Since the bottle was destroyed before the auction, it was never sold. You might be able to claim the donation value on your taxes (consult a CPA), but you can’t get the cash back.
- Event Cancellations: If the event is cancelled and you get the bottle back broken, then your policy might apply (Transit/Off-Premises coverage).
The “Why” (The Trap)
The trap is “Custody and Ownership.”
Did you sign a “Deed of Gift” form? If yes, the charity owns it. If you were just “loaning” it for the auction, you still own it.
If the charity owns it, their deductible is probably $1,000 or $5,000. For a $2,000 bottle, they won’t file a claim. The bottle is just gone.
The Investigation (I Asked an Event Planner)
- Reality Check: “Most charities rely on waivers. If a volunteer breaks it, they apologize. They rarely pay you back. They assume you donated it, so you’re ‘out’ the money anyway.”
Comparison Table
| Status of Bottle | Who Insures? | Claim Type |
| In your trunk (driving there) | You | Transit / Off-Premises |
| Handed to organizer | Charity | Property of Others / Event Liability |
| Sold at auction (not yet picked up) | Buyer | Buyer’s Property |
Step-by-Step Action Plan
- Determine Ownership: Did you sign the donation form yet? If not, argue that you still owned it and file on your own “Off-Premises” policy.
- Get a Statement from the Charity: “We acknowledge that we broke the bottle while it was in our custody.” This is needed for either your tax deduction (proof of destruction) or your insurance claim.
- [IMAGE: Sample letterhead from a charity acknowledging destruction of donated property]
- Check Your Tax Write-Off: If you can’t get insurance money, ensure you get the tax receipt for the “Fair Market Value” of the donation. (Note: IRS rules on donating “Tangible Personal Property” are complex; usually, you deduct the cost basis, not the market value, unless the charity uses it for their mission).
FAQ
Can I claim the tax deduction AND the insurance money?
Absolutely not. That is fraud. You can’t be compensated twice for the same asset.
What if I broke it while setting up?
Then it’s your fault, and your insurance covers it (if you have breakage coverage).