Glass insurance began in the mid 19th century. Standard fire insurance excluded glass coverage. Glass insurance filled a gap in the fire policy. Glass insurance has traditionally excluded fire as a cause of loss because fire is already covered by the standard fire policy.

The high point of glass insurance sales was 1925. Total glass insurance sales has declined since that point in spite of increased use of glass in architecture. Fully 25% of all glass insurance sales traditionally has been in New York City with the balance predominantly sold in other urban areas.

After 1950, most standard comprehensive property coverage has included glass breakage. This has contributed to the decline in glass insurance sales as a monoline product. Today glass insurance is nearly always covered by standard comprehensive property coverage with some restrictions, limitations and exclusions.

The building owner has had the right to select which glasses will be covered and which will not be covered within a monoline glass insurance policy. The glass insurance policy is a schedule of glass plates that are covered with no value limitation indicated on the declarations page. The exception to this rule is stained glass and special glasses, including neon signs, which are listed by location, and assigned value limits for replacement or repair.

An additional competitor to monoline glass insurance for special glasses such as stained glass is inland marine insurance coverage. Inland marine fine art insurance schedules the items covered and has specific limits that are agreed value coverage. The limit is usually based on a recent appraisal of value. The limit may be the same as or less than the appraised value but not more than the appraisal.

Still another form of fine art insurance is written in which the entire set or collection of art glass is insured to a blanket value. This eliminates the mistake of not specifically listing all windows in a schedule and not keeping pace with fluctuating values of individual pieces in a timely fashion. This type of coverage is common in museum coverage.

Standard replacement value or actual cash value coverage is not appropriate for unique art items. Standard comprehensive coverage replaces with or repairs with common readily available materials. The unique art item is one-of-a-kind and therefore not readily available. Substitution of a readily available material for an original unique material produces an indirect loss in fair market value of the artwork. The owner will expect to be compensated for any loss in value along with the cost to repair or replace. Standard replacement value based coverages do not allow for compensation for substitution… they in fact prescribe replacement with currently available parts and materials of a common nature that do not affect valuation.

Commercial comprehensive policies have several limitations to glass coverage. Among the limitations are limits on building value, deductibles, a limit per glass piece, limit per occurrence and limits on causes of loss. They never cover losses for any material or item if caused by earth movement, war, nuclear hazard, flood or wear-and-tear.

Glass insurance policies are on the other hand very simple in nature and fewer limitations. Fire is the normal exclusion of cause of loss in a glass insurance policy. Breakage is defined simply as a crack in the glass that passes from surface to surface no matter how close to a corner it occurs. War and nuclear hazard are the only other exclusions generally.

Even now, as the trend is clear that glass insurance as a monoline product is in decline, there are factors at work in the insurance industry at large that could reverse the trend entirely. All-peril or comprehensive insurance for commercial and residential insurance business is experiencing pressures that require a tighter application of underwriting skill than in the past. Insurers and re-insurers alike are facing lower investment returns to offset underwriting mistakes. Insurers are being asked to carry more of the burden by re-insurers than in the past. Claims losses have been rising in frequency and severity in recent years. All in all, insurance carriers must practice good risk management and underwriting procedures to offset higher operating costs and stabilize premium increases in the face of these severe business pressures of a hard market.

Actions to limit exposure to glass breakage risks include applying higher deductibles for property losses ($1,000, $2,500 or $5,000 per occurrence), wind and hail deductibles (1% to 5%) and experience modification (debits of 20% or more) to customers who file claims. Some insureds find they are being non-renewed for making claims. Higher premiums result from application of debits to experience modifications. Wind and hail restrictions are in the range of 1% to 5% of the total building value. A building with a replacement value of $1,000,000 could have a deductible for any loss caused by wind or hail perils of $10,000 to $50,000 before the insurer pays dollar one of any loss.

Special form coverage can be written as limited glass or full glass coverage. If the insurer provides full glass coverage the limit for glass replacement is the limit of the building itself. If the insurer provides a blanket limit policy the total insurance limit can be the total of all buildings and all contents added together. It is common for a policy to have a very high blanket limit of well over $20,000,000 today in some occupancies. Such policies if not restricted by some means such as a margin stop-loss feature on a per building basis (example: no more than 125% of any scheduled building), could result in excessive payments for glass claims. This is especially the case with special glasses such as stained glass claims.

Insures have ignored the problems for some time inherent in comprehensive coverage of glass within the package policy. Problems have often arisen with claims related to special glasses, unique glasses and art glasses. This is further complicated when a building is part of a historic registry program. The insured is required by contract to replace or repair only in accordance with historic preservation procedures. Furthermore, insurers have failed to track the amount of money directly paid for glass claims separate from other material costs

There are distinct advantages to separate glass coverage from the perspective of the insurer and insured alike. Separate glass insurance eliminates the deductible for glass damage claims. The loss ratio of the larger package policy is not adversely affected when a glass claim is made to the glass insurer. The package insurer can eliminate their exposure to glass claims and eliminate claims service expenses. The glass insurer can better manage glass claims than the commercial package insurer because they have an established network of glass repair shops in waiting. Further, the overall premium the insured pays for comprehensive coverage might be reduced. The extra cost of the glass insurance can be offset by the reduction in the comprehensive package policy premium. The insureds needs are better served overall by glass coverage when a board up service is included. The insured can elect to cover the glasses most exposed and eliminate coverage on less exposed glasses thus reducing the premium cost.

When and if glass insurance recovers market share, it could be a universally applied product added to all policies by the comprehensive package insurer in the manner of systems and equipment breakdown coverage or offered as a value-added product to larger customers with specific adverse exposure conditions. Theses conditions could include large architectural installations of glass, special glass installation needs or location conditions such as ocean front properties, urban locations or locations with adverse exposures to natural weathering and manmade pollution elements that cause losses.

If added as a universal product the package carrier can pay one base rate to the glass insurer, as an underwriting partner, and collect a higher premium from the insured… keeping the difference in premium to offset retention of fire risk and other indirect costs.

If offered as a value-added product, similar to travel insurance or business income coverage, to a select clientele, the package carrier can still offset exposure to adverse risks and eliminate claims for glass.

Still of concern though is the handling of special glasses such as stained glass, art glass, beveled glass and ornamental glasses. These special glasses still must be appraised and insured properly as scheduled and value limited items. Furthermore a new and special network of specialty-glass repair personnel must be developed.

There is a distinct difference in standard glass coverage for breakage from specialty glass damages. Standard glass damage is most often a full or total loss requiring replacement of the glass plate rather than repair of a broken glass plate. Specialty glass, such as stained glass windows, differs because repair is most often the norm rather than replacement, In fact, as the historic value of a piece increases, the imperative is to retain as much original as possible rather than replace. Historic preservation technique requires retention of the original whenever possible. This could mean gluing a broken original piece of glass rather than replacing it with a substitution glass of differing type, quality or kind.

Yet another benefit results in compensating the insured for diminished value because of restoration, repair, substitution or conservation. This is a function of fair market valuation rather than replacement valuation or its derivative, actual cash value.

The art appraisal is always based on what similar articles could be expected to bring in a sale in an open market of willing buyers and sellers. After all, you cannot predict what it would cost to replace an item that is not replaceable in the first place. You can only predict what someone might pay to acquire a similar piece if needed. This is true of any rare item whether we are speaking of stained glass, paintings, antiques or dinosaur bones… any rare item that could be collected or displayed in general within a property.