Insurance of the rich and famous

By Bankrate.com

If you think the rich and famous aren't that different from the rest of us, you should read their insurance policies.

Welcome to the world of specialty-lines insurance.

When clients want to cover extraordinary possessions, such as high-value luxury items, collections or body parts vital to their livelihoods (think concert musicians), they don't just drop into the local insurance office and sign on the dotted line.

Instead, an individual might purchase a separate policy, often called a rider, to cover the item. If the situation is really unusual, it might be handled by a company's specialty-lines department.

And this isn't off-the-rack coverage. Insurance agents who work in this area often develop a special talent for troubleshooting and problem solving, which comes in handy when policies are customized for out-of-the-ordinary items and situations.

"I love being a part of it because you get to see stuff that hasn't been done before," says Eddie Floyd, the managing director for Kemmons Wilson Insurance Group, an insurance company in Memphis, Tenn. "Our clients are fun to work with."

Some of the more extraordinary items insurance companies have underwritten:

A railroad car. And not just any railroad car. Purchased by a billionaire and retrofitted at a cost of nearly $7 million as a luxury motor home on rails, this car could qualify for its own episode of TV's "Cribs." "It's absolutely amazing," Floyd says.

Oddly enough, the owner wasn't seeking insurance on the car itself. But the railroad required that he carry $100 million in liability because his eventual goal is to hitch the car to existing lines, Floyd says. As a result, the premium is roughly $150,000 annually.

Those eyes. A pop artist who specializes in street art insisted on insuring his eyes for $1 million because they gave him his unique artistic vision of life. "He said that he could see things differently through his eyes than any other person," Floyd says.

With some body-part policies, there's "no real risk" for the insurance carrier, adds Floyd. Often, there are so many exclusions in the policies that "it would take a near-perfect claim situation to make it pay out." So high-dollar coverage doesn't automatically come with high premiums.

That nose, that mouth. Ilja Gort, a Dutch winemaker, recently insured his nose for a cool $7.8 million "to reflect the value of his nose to his business," says Jonathan Thomas, the lead underwriter for the Watkins Syndicate of Lloyd's of London. But his policy is not just for show. Coverage will cost the oenophile roughly $23,000 annually.

But it's worth it to Gort. "He is adamant that the only thing he needs to do his job is his nose," Thomas says.

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Perfumers and tea samplers -- the people who taste and test various types of tea -- will sometimes take out similar policies, says Thomas.

Before writing such a policy, a carrier will often send the individual to an ear, nose and throat specialist to set a baseline for his or her olfactory abilities. The person will sniff what appear to be "a whole lot of felt-tip pens" that have been imbued with various scents. "And some are pretty extreme smells that you can't fake," Thomas says.

Continued: Taste buds

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