Are Your Expensive Vices covered?

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While you wouldn't file a homeowners insurance claim if a dinner party guest dropped an $8 bottle of Trader Joes merlot, you certainly would if it were a 1945 Chateau Mouton-Rothschild that cost $47,000.

Or if a fire burned through a humidor of $1,100 Gurkha Black Dragon cigars down in your man-cave.

Or a burglar grabbed your six Master Kush marijuana plants in full flower, worth perhaps $3,000 each.

Can you expect your insurance company to pay for your vices?

The answer is a big, fat maybe.

A typical homeowners policy allows 50 percent of the policy value for contents protection. This means that if your house is insured for $200,000, you have $100,000 to replace all of your belongings, including your wine, cigars or marijuana. But many policies will limit their payout on specialty items -- furs, jewelry and firearms, for example -- to $500 to $2,000.

Those who've invested in fine wines, stogies and dope could easily lose more than that, unless they've made additional arrangements.

Insuring your wine collection

With the dividing line for high-end wines at $20 a bottle and up, according to the Wine Market Council, a small under-counter wine refrigerator could hold hundreds of dollars in relatively modest wines.

But whether or not your wine collection is covered depends on how your booze is destroyed or lost, and its market value.

According to Karl Morgan, a consultant with Insureyourwine.com, "Most homeowner policies do cover vintage wine collections, but only against theft and fire. Damage due to an earthquake, flood, transit issue, or spoilage caused by a mechanical breakdown of refrigeration equipment would not be covered."

These are big exclusions when it comes to wine.

If you want to properly protect your vino, a separate, specialized policy is needed, available from insureyourwine.com and carriers that offer wine-specific policies, such as Fireman's Fund, Chubb and AIG.

Wine-specific policies come in two different vintages. A blanket policy covers your entire collection under one lump value; a stand-alone policy insures each individual bottle. It is also possible to blend policies, a blanket covering your less valuable bottles with a stand-alone policy for the high-end stuff.

Chubb Group spokesperson David Hilgen describes the company's wine coverage: "Our collectible policies offer protection against earthquake and flood damage as well as spoilage due to power failure. In the event you drop a $10,000 bottle, accidental breakage covers your loss."

Costs vary based on the location and the size of the collection, Hilgen says, but expect to pay roughly 42 cents per $100 of coverage.

Insuring your cigar collection

Cigars can affect your insurance in a couple of different ways. It's hard to get that nonsmokers discount on your homeowners when you have $8,000 worth of cigars in a professionally built humidor in the basement.

More importantly, you want to make sure your collection is covered. Unfortunately, cigars are not as easy to insure as wine.

You may be able to claim your collection under the contents portion of your homeowners policy, but just like wine, the value of your collection could end up soaking up the majority of your contents payout.

There can also be exclusions, or coverage limits on cigars and other collectibles, so the only way to be sure that your collection is fully covered is to read your policy and talk to your agent. If you are serious collector, your stogies are probably worth a separate policy.

"In most cases, a cigar collection would be written on a valuable articles personal floater policy," says Mark Carrasquillo, spokesperson for insurance broker E.G. Bowman Co. "You may need to contact higher-end insurers such as AIG or Fireman's Fund for this type of coverage. The cost should be in line with insuring a wine collection."

While these riders will cover the replacement cost of your cigar collection, they may not protect against flood, earthquake and power interruption - just fire and theft. Cigar-specific policies are not nearly as common as wine policies so be sure to read the rider in full.

"Make sure there is specific language included in the rider to ensure these situations are covered," advises columnist David Bakke with the personal finance site Money Crashers.

Insuring your marijuana plants

If you have a significant marijuana-related loss, it's quite possible your claim will be denied -- and if you are paid, there is a good chance you won't be paid in full.

No one sells a marijuana-specific homeowners policy rider.If you are reimbursed, it most likely would fall under the "Trees, Shrubs and Other Plants" section of your homeowners policy, says Carrasquillo. But a standard policy caps the payout at 5 percent of the dwelling limit, and a maximum of $500 for any one plant.

Law enforcement and pot growers value their plants at a much higher amount, usually $3,000 to $4,000 for a mature plant.

So far the courts have sided with the insurers. A case in Hawaii involved 12 legally grown plants that were stolen. The homeowner valued them at $45,600, but the insurance company was willing to pay out just $8,801.90. The homeowner went to court and lost.

The judgment hinged on the fact that while medicinal use is legal in Hawaii and 19 other states -- and recreational use is legal in two states, Washington and Colorado -- marijuana is still illegal at the federal level.

While most policies do not directly exclude marijuana or plants, there is a good chance they will eventually.

"This is a topic that will surely change the industry," says Carrasquillo. "An increase in the theft or destruction of marijuana plants will lead companies to apply a higher deductible for this policy section or simply exclude coverage for the plant. Eventually marijuana will find itself on an exclusion list."

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