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Coverage for the times? Now it's kidnap and ransom coverage for homeowners

Maybe you feel protected by your homeowners insurance policy, but there's additional coverage you could arrange for further peace of mind in these difficult times ... kidnap and ransom insurance ("K&R").

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Traditionally, "K&R mainly has been the province of several commercial lines markets," explains Scott Edelen, spokesman for the California Department of Insurance. For example, Chubb, Lloyd's of London and various other markets for years have been selling K&R to businesses, covering key executives of financial institutions and other corporations.

In these vexing situations, an employee might be kidnapped and be forced to have money withdrawn from his or her account or held for ransom to be paid by his or her firm.

However, "The K&R insurance marketplace has been expanding of late to personal lines," Edelen added. Specifically, Chubb and Fireman's Fund are among the handful of U.S. carriers that can arrange K&R insurance protection for typically upscale homeowner risks.

Kidnap and ransom insurance covers kidnappings and related incidents through a combination of financial indemnification and crisis management. Policies can include protection for kidnap, extortion and hijacking events, on domestic or foreign soil. Policies can include payment of various consultancy fees, e.g. for psychiatric treatment and public relations services. Coverage can cover the costs of ransom and/or extortion payment, legal expenses and medical treatment.

Two California homeowners recognize K&R's value, but one approaches the subject a little differently than the other. For example, former criminal prosecutor Dale Miller says he "appreciates the coverage's value in these difficult times" and cites a case in point.

"I'd want kidnap and ransom insurance if I were a jeweler or in some other business that requires me to bring home inventory or cash," said Miller, who recently retired as Contra Costa County's Chief Deputy District Attorney.

Like Miller, the coverage intrigues Bob Johansen. "I'd be interested because there's a lot of uncertainty in this day and age," said Johansen, who owns homes in Santa Rosa and Middletown (Lake County). "If it's affordable, I'd want to see if buying it makes sense for me. I'm definitely going to ask about it."

Chubb's Masterpiece personal liability contract includes kidnap expense coverage, usually at no additional cost. Kidnap expense protection is offered in all states except Alaska, Louisiana and North Carolina. In addition, Chubb offers its homeowner insureds in five states an endorsement that compensates victims of home invasion, child abduction, carjackings and stalking threats, according to Mary Ann Avnet, Marketing and Customer Relations Manager for Chubb Personal Insurance in Whitehouse Station, N.J.

Chubb's endorsement, called Masterpiece Family Protection, is currently available in Colorado, Connecticut, Illinois, Massachusetts, and New Jersey. Look for the company to add numerous other states this year, according to Avnet.

Fireman's Fund takes a slightly different underwriting approach than Chubb and some other markets in covering K&R perils. Fireman's Fund has a newly revised homeowners policy that, among other things, begins providing kidnap and ransom expense protection. Fireman's Fund reimburses homeowner insureds for kidnap-related expenses such as attorney fees, lost income, travel and lodging costs and telephone expenses. Notably however, it does not cover the ransom payments.

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