BOSTON ( TheStreet) -- The wealthy have their indulgences, from fine art to rare wines, and protecting them means more than having an insurance policy. Sometimes it means hiring private agents to run a sting on thieves. Sometimes it means just remembering to turn on the damn alarm system.
"Risk management" and "asset protection" are more than just standard financial terms for Gary Raphael, senior vice president of claims and risk consulting for ACE Private Risk Services, the high-net-worth personal insurance business of the
(ACE - Get Report)
| Just a collection of comic books, but people have killed to get them and died defending them. Many collectors fail to properly guard their goods, experts say.
Investors need to consider the risks threatening the value and safety of their collections and take the often neglected steps to protect their treasures, he says. With affluent consumers using collections to diversify investment portfolios, too often they do not devote adequate time and effort to managing the risks involved with owning such prized collections.
There is no shortage of tales to illustrate when bad things happen to valuable art and collectibles.
There is, for example, the now notorious 2006 party thrown by casino mogul Steve Wynn where he accidentally put his elbow through Picasso's
, a painting he had just sold for $139 million. Although the painting was restored, his sale of it was canceled after its value plummeted by a reported $40 million.
An antique 1909 German Steiff teddy bear valued at $75,000 was torn to pieces by a guard dog while on loan to a children's museum in England.
A 12-year-old boy visiting the Detroit Institute of the Arts with his sixth-grade class damaged a Helen Frankenthaler canvas when he stuck a wad of chewing gum on the painting.
The unique tastes of some collectors can present equally unique challenges, though.
"People's tastes and interests go in a lot of directions," he says. "Sometimes you can't explain what people are passionate about, and who are we to question? I remember a client who collected old tin kitchen containers and had amassed one of the largest collections in the world of these old sugar and flour containers. He was as proud of it as if he had Picassos and Warhols on the wall. We've had people who were interested in taxidermy and recreated wildlife and jungle settings and settings in rooms of their house and with hundreds and hundreds of animals around the property. How do you value a white albino African zebra? How do you counsel somebody on protecting a 4,000-pound stuffed water buffalo?"