COVERING WINE-FOR COLLECTORS AND VINEYARD OWNERS

Rough Notes, Mar 2007 by Zinkewicz, Phil

Fireman's Fund's specialist approach includes personal and commercial products

In an old Peter Falk "Columbo" episode, actor Donald Pleasence all but chews up the scenery as the snobbish owner of a winery in California. Plot developments have Pleasence kill his half brother in order to save his winery. Naturally, Columbo is assigned to the case and, in a short period of time, must become knowledgeable about fine wines in order to trap Pleasence.

In one unforgettable scene, Pleasence is standing on the edge of a cliff, hurling his entire wine collection into the Pacific Ocean after it had been ruined from exposure to excessive heat. Pleasence is not upset because he is tossing his profits away or even because Columbo has arrived to arrest him for murder. He is crestfallen because his precious wine collection, the only thing he ever lived for, is going to be wasted.

Many people feel that way, albeitwe hope-not to a murderous extent, about their collections. Whether it is baseball cards, fine art, exotic jewelry, or even shrunken heads, people tend to become passionate about the things they've amassed.

Ask Chris Heidrick, vice president of personal lines insurance for Fireman's Fund Insurance Companies. "We are recognized as an industry leader in insurance collectibles and large art collections," says Heidrick. "Over the years, Fireman's Fund has insured such diverse high-value collectibles as Abraham Lincoln's stovepipe hat, Fabergé eggs, a Betsy Ross-made American flag, dinosaur skeletons, antique carousel horses, sports memorabilia, Academy Awards and Emmys and, yes, even those shrunken heads."

Heidrick explains that each type of collectible can be underwritten with an agreed-upon value, establishing a value up front that is not affected by downward changes in the market value. "And to help assure adequate coverage in an escalating market, we pay up to 150% of the agreed value. So, the invested value stays intact, with no deductible," says Heidrick.

Fireman's Fund also offers "blanket" coverage on large collections, provides a $50,000 per item limit and also allows the customer to tailor higher per-item limits appropriate to their particular collection. "The blanket coverage is especially valued by collectors who regularly buy and sell pieces of art from a total portfolio worth millions of dollars," says Heidrick. "And if loss befalls a piece of art, Fireman's Fund adjusters have extensive experience in dealing with restoration experts and avenues for recovery of stolen art."

Continues Heidrick: "Customers frequently have more opportunity to shop or scour galleries when on vacation away from the demands of daily life. When customers purchase new art, jewelry or collectibles, they have automatic coverage of up to 100% of the limit in their policy for objects in the same category, as opposed to the industry norm of 25%. That means there's coverage while the item or items are being shipped home. This applies worldwide and, for convenience's sake, we extend this automatic coverage of new purchases for 90 days, giving customers ample time to notify their agent to add them to the policy."

Fireman's Fund's policy also addresses policyholders' emotional attachment to their collections," says Heidrick. "A Tiffany lamp might have illuminated a mother's childhood home and [thus] carry special sentimental value. A bracelet might evoke a special memory of youth. In either case, Fireman's Fund sees the emotional meaning behind the obvious market value and can advise on the care of the treasured object.

"If an insured item is lost or stolen, we partner with a combination of private investigative firms and public law enforcement to recover the artwork undamaged," Heidrick continues. "If recovery is not possible, we will assist in locating a similar replacement item or, in restoration, with compensation for any difference in value due to the damage. When replacement or repair isn't possible, our top priority is a fast and fair settlement."

But, back to wines. Heidrick says that, in addition to the insurance coverages already mentioned for collectibles overall, Fireman's Fund also makes risk management and loss control expertise available to wine collectors. "There are specific issues that must be addressed in wine collecting," he says. For one thing, the wine must be properly stored, with back-up power generators in order to keep the wine at just the right temperature."

Also, there is a good deal more activity with wine collections as opposed to other collectibles, Heidrick explains. "The portfolio is always changing. At times, owners will drink some of their wines, give some away or buy some more. That's what makes the blanket coverage ideal. Sometimes," he continues, "geography comes into play. We might advise a wine collector who lives in earthquake-prone California or hurricane-prone Florida to store the wine away from the home. Also, wine collectors need to be specific about wine labels. A scratched or marred label could seriously reduce the value of the wine."