Insuring the good times
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August 17, 1999: 6:34 a.m. ET
Event insurance helps protect against bad weather, cancellations
By Staff Writer Nicole Jacoby
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NEW YORK (CNNfn) - It's every groom's worst nightmare: the liquor store delivered the wrong beer, the filet mignon's gone bad and the bride has a severe case of the chickenpox.
But these events don't necessarily have to mean nuptial disaster.
Special events insurance policies that kick in when festive occasions go awry can shield against such mishaps. And they aren't just limited to weddings.
Bar mitzvahs, 50th anniversary celebrations and retirement parties can all be covered by special event insurance, as can baby showers, reunions and graduation festivities.
"This type of insurance covers all sorts of events and perils," said Madelyn Flannagan, consumer affairs advocate for the Independent Insurance Agent of America. "A kite-flying contest, for instance, can only take place if there is wind. If there's a storm, the party can't go on."
Determining need
The idea of insuring a party might seem excessive, but with many weddings and other celebrations costing upwards of $20,000, the investment may not seem completely farfetched -- though at least one consumer advocate says it all depends on your risk tolerance.
"You've got to decide what's going to hurt," said Bob Hunter, director of insurance for the Consumer Federation of America. "You can't really put a number on it. Donald Trump obviously has a different threshold than others do."
Nervous nail-biting types, in other words, may find these policies worth their while simply for peace of mind.
The Fireman's Fund is the only company that currently underwrites these types of policies, which are administered by Fawskin, Calif.-based R.V. Nuccio & Associates. Dubbed "Weddingsurance," "Celebrationsurance" and "Barmitzvahsurance," the policies' costs and options are wide-ranging and they can be purchased as early as two years before the event.
What's in it for you
All policies cover non-refundable deposits lost when an event is canceled or postponed beyond the policy-holder's control.
If a bride falls sick, for instance, or the honoree of a graduation party is sent overseas for military service, non-refundable fees would be covered.
The policies also protect against damage to the premise where the event is to be held and adverse weather conditions that cause delay or cancellation, provided the coverage is purchased two weeks before the event.
Loss or damage to vital attire -- such as wedding gowns -- are also insured within a certain number of days before an event. Flowers, catering and entertainment, among other party necessities, are also insured.
In addition to the basic coverage, policy holders can opt for additional coverage, including photography and video insurance. This option makes up for an absent photographer or damaged, lost or improperly developed negatives. In most cases, the insurance also pays for the round-trip expenses associated with getting family members to re-assemble in one place.
Personal liability coverage is an additional option. Many venues require this type of insurance to protect against injury or damage at an event. Liability coverage can be particularly important if a party is held in a private home, especially if alcohol is involved, since many courts have blamed drunk-driving incidents on party hosts. Additional coverage may not be necessary if the host is already protected by a personal "umbrella" liability coverage as part of his or her homeowner's policy.
Weighing the costs
The cost of special event insurance varies, depending on the extent of the coverage and the total cost of the event.
Basic "Celebrationsurance" offered by the Fireman's Fund starts at $125 for $3,000 of coverage for non-refundable deposits. An additional required $70 can be applied to any of the policy extensions, such as medical coverage for those attending the event or special attire insurance.
The Fireman's Fund uses a worksheet to calculate the exact costs of the wedding insurance. A couple planning a $20,000 wedding can expect to pay about $500 for the most basic coverage, plus $50 to $175 for personal liability.
But special event insurance can often get as high as $1,500 to $2,000, says the IIAA's Flannagan, especially for a party that costs $25,000 to $30,000. She recommends party insurance for any celebration that costs upwards of $5,000.
"That's really not a lot when you consider what you're looking at in terms of risk and expense," she said. "In the case of an outdoor wedding, for instance, the chance of rain is usually 50-50."
But the Consumer Federation's Hunter disagrees.
"This is a pretty high-priced policy," said Hunter. "It depends how nervous you are about life. A wedding can get canceled -- as the death of J.F.K. (John F. Kennedy) Jr. proved -- but those things don't happen every day."
Hunter argues that most mishaps are "controllable."
"Bad weather, for instance
Rather than spend $500 on event insurance, why not spend $500 on a tent," he said.
What isn't covered
But if you're a worrywart and set on purchasing a special events policy, bear in mind that not all misfortunes are covered.
The mother of all wedding faux-pas -- a change of heart on part of the bride or groom -- is not insured, so if the prospective Mr. or Ms. Right decides you're just plain wrong, you'll still have to foot the bill.
And gifts also are generally not insured, though additional coverage for these items can be purchased. Engaged couples should consider buying homeowners' or renters' insurance before the big day to protect against stolen wedding gifts or any luggage that might be lost on the honeymoon.
Although rings and other valuable jewelry are usually covered under homeowner's insurance, they do require additional documentation, such as the original bill of sale or a signed appraisal from a reputable jeweler.
Be sure to discuss your needs with your insurance agent to find out exactly what is and isn't covered under current policies. If you're already paying thousands of dollars on a big event, you don't want to incur additional expenses by purchasing unneeded insurance.
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