INSURANCE: Weighing the Risks What if . . . ?
Well, don't even think about it. It would make you sick if you lost it. I mean, these things can't be replaced. Insurance money just eases the pain. It doesn't take the flood of the century in the Midwest to put sports memorabilia collectors on notice that perhaps those valuables should be protected with insurance.
It may come in the form of a rider policy, like those protecting art or jewelry. An Oklahoma collector recently received a check for $6,000 to replace a book of 1950s baseball cards that was stolen during a burglary. He said there's no way he'll recover those cards. And, here's the good news, the thief left plenty behind. More extensive memorabilia collections may warrant coverage by a company that focuses on sports memorabilia.
That company is based in Wapakoneta, Ohio, a town with barely 9,000 residents. But it has Cornell & Finkelmeier, a firm that caters to hundreds of collectors and dealers in about 40 states, including more than a few collecting politicians, professionals, business executives, retired athletes and Hall of Famers. Tom Finkelmeier, a principal in the company, says it's likely that most prominent collectors and athletes whose affairs are managed professionally have their collections in good hands. However, he also knows people with collections worth millions who have no insurance at all.
In all, Cornell & Finkelmeier has $100 million worth of policy holders. That's a large sum of money at risk, but a relative pittance given the
billions of dollars of product in shopes, homes and offices. Finkelmeier, a long-time card collector, said autographed sports memorabilia is regarded by insurance companies as a rather unknown specialty area. Most companies knew little about it until 1987, when the hobby blossomed into "industry" status. His company began in 1981, when, as an insurance agent and memorabilia collector, he heard dealers complaining about how they couldn't find insurance. He slowly built a following with a small insurance company until he was able to find the right underwriter to create the right package. "Many insurance companies just don't understand the hobby and the forces that drive it," he said. A few insurance companies have been in and out of the industry, including Lloyd's of London, though various companies still insure individually scheduled items. "Sports memorabilia takes knowledge and a giant underwriter, one that's licensed in every state and whose reputation is unquestioned," Finkelmeier said. Travelers Insurance, with $50 billion in assets, provided that support, enabling a knowledgeable
agency to create a marketable package."
Cornell & Finkelmeier's policy carries a minimum premium of $500, so it's not geared for the small collector. Enter dealers and medium-to-large private collections. A $100,000 policy, with a $5,000 dedictible, runs $690 a year - that's 69 cents per $100. The cost per $100 is reduced with larger policies. The policy application is reviewed annually. "The thrust of our policy is for the larger private collector or memorabilia stores and shops and dealers whose items are on the premises," he said. "The items must be on the premises; you just can't insure items in people's briefcases. And a collection has to be large enough to justify a separate policy. If you have $10,000 worth of memorabilia, you should check into insuring your collection. Start with a local insurance agent. Consider a fine arts floater, where you lump your inventory together. Many companies do that for collections worth $10,000 or $15,000. When you get over $20,000, you might consider more specialized coverage."
Yet, there are plenty of dealers whose inventories far exceed $20,000 and carry no coverage. "I have visited many dealers who say their inventory is worth $200,000, but they're uninsured," he said. "Many dealers still have a flea market mentality. They consider this a hobby, but if they sat back and looked at the income they derive from this, they wouldn't leave it uninsured. When you look at the money that changes hands at conventions and major shows it's amazing that insurance isn't more of a critical issue. It would amaze me if 50 percent of the dealers are insured, though there's no way for me to know."
He said the hobby as a business has not matured to the level of the stamp and coin hobby, where it's unusual to have an inventory of $100,000 or $200,000 without insurance. "It's really a young hobby from the standpoint of business," he said. He agreed that a hobby with a "flea market mentality" is fraught with a general lack of trust among its participants. "That's most definitely true, though I see that changing. To see memorabilia stores in high grade malls is a long jump from the dusty roadside flea markets."
Cornell and Finkelmeier have insured most of the headline grabbing auction items, from Honus Wagner cards to Ruth and Gehrig jerseys. "The thing that amazes me is that there are so many unique collections and no one has heard of them," he said. "We insure them. I talked the other day with an umpire who spent many years in the big leagues. Over the years he was given things and he has an amazing collection. Then, you have people who worked for big league teams and had access to these celebrities. "A lot of people whose houses have become veritable museums haven't addressed this," he said. "They should at least be aware of it."
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