Insuring Your CC Collection in the US

[MrBirdman]

On Zoom the question was raised about whether a US resident could get their homeowners insurance to cover Cuban cigars. I am aware of people insuring their NC collection, which typically requires a rider. As for whether Cubans would be covered, the most obvious answer would appear to be no, probably not in light of the embargo. But on the other hand there was a few year period after the Obama administration's rule changes where Cuban cigars could legally be brought into the country. 

Interested to hear whether any members have tried to insure their collection (and perhaps even succeeded) - what was the response from insurers?

[NSXCIGAR]

I should insure mine--they always seem to catch on fire. 

[Edicion]

46 minutes ago, NSXCIGAR said:

I should insure mine--they always seem to catch on fire. 

Has happened before

 

[Tdm_86]

It’s very difficult to insure consumables when you’re the consumer and not the producer/wholesaler/retailer. The same goes for liquor, expensive tea etc etc. How is an insurance company going to adjust for that. Did the consumer simply consume, or did something actually happen?

One of my buddies who resides in the U.S. has a quite extensive whisky collection (mostly very expensive bourbon) that he wanted to insure. His insurance rep all but laughed at him. 

[MrBirdman]

1 hour ago, Tdm_86 said:

It’s very difficult to insure consumables when you’re the consumer and not the producer/wholesaler/retailer. The same goes for liquor, expensive tea etc etc. How is an insurance company going to adjust for that. Did the consumer simply consume, or did something actually happen?

One of my buddies who resides in the U.S. has a quite extensive whisky collection (mostly very expensive bourbon) that he wanted to insure. His insurance rep all but laughed at him. 

Hmmm, interesting. My understanding is that most homeowners’ insurers will cover a wine cellar with a rider, which is obviously a consumable as well. 

[Tdm_86]

It probably depends on the insurance company and the total value (argument with buddy’s bourbon collection was: once you open that bottle that’s $1500 on the secondary market, it’s now a $0 bottle). This might be different with cigars. Though it’s always hard to prove when something happens with consumables that they weren’t just consumed. As far as Cuban cigars go, I have always understood that it is perfectly legal to own and smoke them in the U.S. so speak to your insurance company and see what they say. Maybe an agreed value that you readjust every 6 months as stuff comes and goes. 

[TobaccoRoad]

I tried to add my modest collection onto a rider for other valuables I was insuring. Agent said no dice.

[Monterey]

Thought about this since the zoom chat.  I think the challenging part is "Replacement Costs".  What is the replacement cost for a box of Cubans for someone living in the states?  I bought hundreds of boxes  in Cuba and it was all on the up and up.  But how do I or an insurance company replace them given I can't go back to Cuba and replace them?

[BrightonCorgi]

Agreed value is the way I'd like to go on a policy.  Just like when you have a collector car with 30K with blue book value of 2K. 

[Bigkahuna]

Absolutely anything is possible. AIG has a PCG (private client group) division that underwrites things for agreed value. For example, cars that are one of 15 built globally and have no real market value determination can be insured for whatever amount the owner would like. Of course that affects the premiums. This is very popular with the car collectors with more than say 10 or 12 valuable cars that cannot be replaced. They will insure almost anything with a photo proof and perhaps an adjuster to visit in person. Trust me insuring cigars can be done if your collection is valuable enough. 

[Hammer Smokin']

[almost] anything can be insured. 

 

Lloyds of London will insure anything. 

 

Deductibles are high for these types of goods. Often $10K or so. But if you have $100K+ valued collection (cars, cigars, etc), a $10K deductible may not mean much. 

[MrBirdman]

On 8/11/2022 at 5:47 AM, Tdm_86 said:

I have always understood that it is perfectly legal to own and smoke them in the U.S. so speak to your insurance company and see what they say. Maybe an agreed value that you readjust every 6 months as stuff comes and goes. 

This is my understanding as well, since the 2014 changes it is no longer illegal to simply possess or smoke Cuban cigars - it's the importation or sale that remains illegal. I'll reach out to my agent and see what's what. 

Thanks for the replies everyone.

[Tstew75]

1 hour ago, MrBirdman said:

This is my understanding as well, since the 2014 changes it is no longer illegal to simply possess or smoke Cuban cigars - it's the importation or sale that remains illegal. I'll reach out to my agent and see what's what. 

Thanks for the replies everyone.

Def let us know...I really need my insured if possible

[BrightonCorgi]

I am working on a policy quote right now from Powers Insurance  Found them online.  I have no affiliation to them at all.

[SCgarman]

This may open up a can of worms that you won't be able to put the lid back on. Especially in the US. Besides, cigars are consumable items and since personal inventory is fluid, how do you insure? I would think most home-owner insurance agents would not take you seriously. 

[BrightonCorgi]

12 minutes ago, SCgarman said:

This may open up a can of worms that you won't be able to put the lid back on. Especially in the US. Besides, cigars are consumable items and since personal inventory is fluid, how do you insure? I would think most home-owner insurance agents would not take you seriously. 

I want to get an agreed value or blanket policy based on today's box count.  If the inventory goes up/down enough for me to want a new policy; I'll deal with it then.  I don't think my box count will go up or down much at this point.  I buy about as many boxes as I smoke so the total box count does swing much.

To keep it simple, 100 boxes at $300 a box value.  30K blanket policy for instance.

[Yardley]

Work in insurance. Anything can be insured, you might not like the price though. 

Step one is find a good high net worth insurance agent. GEICO isn’t covering this. Unless you’re bringing a $1M+ home to the table for a homeowners policy, you’re probably not getting a call back from one of these shops. Insuring a collection of any sorts is a high touch complicated risk to get priced; art, antiques, etc. It’s a pain in the ass for the carrier and the agent, neither really want this business, but they’ll do it as an accommodation. They’ve gotten very good at insuring wine easily since it’s pretty common among the affluent, if anyones insured a massive cigar collection it’s a good HNW agent.

Next step is being VERY pedantic about what is and isn’t covered and how a loss event is defined. Power goes out and humidifier stops working and you’re away for a month in the middle of summer… is that covered?? Paying the premium to find out a loss isn’t covered would put me through the roof.

Then you have to agree on replacement cost. Auction houses are great, but you’ll need an expert appraisal that the carrier will agree to accept. @Fuzz might not cut it for AIG, though I would be fine with his appraisals. Not sure how you’d figure that out, but anything’s possible. 

This is a rich person’s problem here to the insurance world. If that is you, congrats, do you need another friend? Realistically it’s just not worth the hassle for anyone in the chain. From binding the policy to figuring out of a claim is legit and paying it… high cost/low benefit. Unless you give them you’re house in Naples and yacht to insure. 

[Hammer Smokin']

it would be a named perils fire policy only. paying out only on a total loss. and paying out on an agreed basis. 

what the purchaser is paying for is the "relief" that they are insured. That "relief" is what is costing money. Cause in the event of a claim, that "relief" will be going right out the window. 

If anyone is really considering insuring their cigars my advise is as follows:

- use a broker. do NOT use a direct writer.

- ask the broker specific questions around SPECIFIC loss scenarios. 

- get the answers from the broker in WRITING. That way if they 'misadvise' at least you'll be covered (potentially) by their E&O. 

- be very clear around the understanding of valuations. Agreed value is really the only way this could get done without a TON of pain. 

 

I can't be clear enough about asking the broker many (many) questions, and getting answers in writing. Keep those emails!

[Hammer Smokin']

40 minutes ago, Yardley said:

Work in insurance. Anything can be insured, you might not like the price though. 

Step one is find a good high net worth insurance agent. GEICO isn’t covering this. Unless you’re bringing a $1M+ home to the table for a homeowners policy, you’re probably not getting a call back from one of these shops. Insuring a collection of any sorts is a high touch complicated risk to get priced; art, antiques, etc. It’s a pain in the ass for the carrier and the agent, neither really want this business, but they’ll do it as an accommodation. They’ve gotten very good at insuring wine easily since it’s pretty common among the affluent, if anyones insured a massive cigar collection it’s a good HNW agent.

Next step is being VERY pedantic about what is and isn’t covered and how a loss event is defined. Power goes out and humidifier stops working and you’re away for a month in the middle of summer… is that covered?? Paying the premium to find out a loss isn’t covered would put me through the roof.

Then you have to agree on replacement cost. Auction houses are great, but you’ll need an expert appraisal that the carrier will agree to accept. @Fuzz might not cut it for AIG, though I would be fine with his appraisals. Not sure how you’d figure that out, but anything’s possible. 

This is a rich person’s problem here to the insurance world. If that is you, congrats, do you need another friend? Realistically it’s just not worth the hassle for anyone in the chain. From binding the policy to figuring out of a claim is legit and paying it… high cost/low benefit. Unless you give them you’re house in Naples and yacht to insure. 

by the way, this is a very accurate post, especially the last paragraph. 

if you have enough money to have a cigar collection worth insuring, you likely have a large insurance program already paying a broker lots of dollars of commission. If not, you'll only be seen as a headache. 

Chubb has a VIP insurance product in North America that would likely provide an extension for coverage. But again, you'd need to have your portfolio of insurance needs already with them (auto, home (multiple), cottage, vehicles (fleet likely), art, boat, toys, etc). 

[El Presidente]

Ken won a serious insurance claim where his cigars were water damaged. 

It took some time and an appeal to the ombudsman but a big check came his way. 

It was all under a standard home and contents policy. 

[Hammer Smokin']

a standard home and contents policy in north america will exclude tobacco. 

I'm assuming either Ken's policy didn't exclude tobacco, or Ken somehow convinced his insurer that his cigars were made from something else