Precious Cargo

Skimping on wine insurance is a bad bet.



Wine is endlessly fascinating. Insurance policies are nonstop boring. Until, that is, your wine collection goes up in smoke—or earthquake or flood—rendering the fine print of your coverage quite compelling.

For serious wine collectors, insurance comes with the territory. After spending large amounts of money on wine and storage facilities, skimping on insurance is a bad bet. Ask Ric Hopper of Hopper's Wines & Spirits in New Orleans, who has been working overtime since Hurricane Katrina doing damage estimates for both collectors and insurers, and he'll tell you horror stories about flood insurance that didn't cover the replacement costs of the house, let alone the wine, and about disputes over whether the refrigeration went out because of damage to the property or because of a citywide power outage that wasn't covered. He'll also tell you about top-tier insurers who really did do a stellar job for their clients.

Small collections can often be handled through standard homeowners policies. For larger and more valuable collections, several insurers offer a choice of blanket coverage—up to a total value, with a specified per-bottle limit—and itemized, bottle-by-bottle coverage for your well-aged Petruses and Le Pins. Basic blanket coverage costs somewhere between 40 and 50 cents per $100; insuring a $100,000 collection runs about $450 a year.

Unlike art, jewelry and most other valuable collectibles, wine is highly perishable. A temperature spike won't damage your diamond ring, but it could cook your Diamond Mountain. Fireman's Fund is one of the insurers that offers risk assessment consulting as a customer service, advising clients on temperature control, humidity, rack stability and other vulnerabilities. And even with blanket coverage, inventory management and documentation is essential. "You need to know what you have up front," says Fireman's Fund personal insurance VP Chris Heidrick; "Figuring out value after the loss is usually a bad thing for the customer." For more information, go to www.firemansfund.com.

Read about how to insure your wine.

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