Weird insurance

Kiplinger's Personal Finance Magazine, Oct, 1998 by Kimberly Lankford

Ransom Reimbursement

Are you concerned that your family--or boss--won't cough up the ransom if you're kidnapped? You can ease your fears by buying a kidnapping policy.

Multinational corporations have purchased kidnapping insurance for years, in case their executives are abducted by terrorists. But individuals can also buy this coverage if they're about to fly off to a kidnapping hot spot such as Mexico, Colombia, Russia or the Philippines. In the first half of 1998, Lloyd's paid out close to $20 million for kidnapping claims in Mexico, says Thomas Petersen of Petersen International Underwriters (800345-8816), a Valencia, Cal., firm that sells Lloyd's policies.

The price varies depending on who you are, what you do and how you do it, says Petersen. A run-of-the-mill American CEO who occasionally travels abroad would pay about $1,000 to $5,000 for the policy; a high-profile person--such as anyone named Rockefeller--would pay about $2,500 to $10,000. The policy will reimburse up to $1 million in ransom (it's illegal for the insurance company to pay the ransom directly to the kidnappers) and provide a response team of negotiators within hours.

You may also want to consider paying a few hundred dollars more to insure your whole family. "The goal of the kidnappers is to get one family member," says Petersen. "They usually don't care who it is."

Cork Fly in the Cellar

Wine-collection insurance covers not only basic losses, such as breakage and theft, but also unsavory situations, such as cork fly--which happens when bottles spontaneously pop their corks because of a change in temperature. The insurance (cost: 50 cents to $1 per $100 of value) will also pay off if the bottles become worthless because, say, firefighters hose down the wine cellar during a fire and all the labels come off, says Michael Smerkanich, the valuable-articles specialist for Alton Insurance Agency, in Arlington, Va.

If taxidermy's your thing, Fireman's Fund is prepared to cover your collection. The company, which insures lots of odd stuff, learned all about taxidermy risks and values when approached by a hunter who wanted insurance for his stuffed-animal collection. Fireman's has also covered carousel horses, nickelodeons and stuffed-bear collections-items that aren't covered for breakage or their full replacement value under typical homeowners-insurance policies. Artwork and furniture usually cost 15 cents to 20 cents per $100--much less than the $1.40 to $1.75 per $100 for jewelry because it's a lot tougher to sneak away with a Chippendale desk than a diamond brooch. (You'll get a discount if you keep your jewels in a vault.) Chubb and Lloyd's offer similar prices.

Rained Out

For the Las Vegas-style approach to insurance, New York agency Worldwide Weather (www.weatherins.com/vacation/vacation) insures against the elements. You pick the dates, the place and the kind of weather--they'll come up with a price based on historical data from the National Climatic Data Center. For $404, for example, they will pay $3,000 if there is more than 0.01 inch of rainfall between 10 A.M. and 4 P.M. on five or more days between September 1 and September 9 to cover a vacation on the island of St. Maarten/Juliana in the Caribbean.