Part 1 of our discussion on the hobby v. business exposure. Please also see Hobby or Business - Part 2.

Have you thought about how your hobby may affect your insurance needs? Hobbies often require a large investment in tangible property and may even create some legal responsibility to other persons or their property.

Hobbyists: Collectors or Activists

Hobbies typically involve either collectors or activists. A collector acquires property that especially attracts him or her. Examples include people who collect stamps, art, coins, autos, antiques, comic books, baskets, dishes, glassware, sports memorabilia, etc. An "activist" (this writer's term) also collects a certain type of property. However, the activist acquires property in order to pursue an activity. Examples are hunters, musicians, painters, sculptors, cyclists, and enthusiasts of many types, such as fans of model or radio control planes, helicopters, etc.

With collectors, the focus should be placed on the nature of the property being acquired. With activists, besides attention to the property exposure, there should be equal emphasis on the liability exposure that is inherent in their activity.

Coverage Needs Created By Your Hobby

Property Coverage - Your special property should be properly insured. Most homeowner policies provide minimal protection for collectible property. Why? Items such as coins, stamps, antiques, guns, etc., are often fragile. Also, such property is very valuable in relation to its size. The value of collectibles kept in one room may be more valuable than all of the rest of your home's contents. Regular homeowner coverage is not designed to handle high-valued property that is easily destroyed or lost.

Even when collectible property is eligible for a policy's full coverage, this may not be enough. You may want your special property to be covered from more causes of loss than your family room couch. It may be worthwhile to buy an endorsement to add additional coverage for your collectibles to your homeowner policy. Depending upon the type and value of your collectibles, you may even have to consider specialty coverage.

Liability Coverage - if your hobby is more hands-on, then be sure you're protected against any legal liability related to your activity. Ask yourself the following:

• Are there any dangers associated with the hobby?
• Does the hobby involve frequent travel to sites or meets?
• Does the activity attract frequent visitors to your home?
• Do you publish hobbyist newsletters or give advice to others?
• Do you actively sell or trade property on or away from your home?
• Does your activity involve equipment that's inherently dangerous to others?

Get Serious About Your Hobby

Fortunately, many aspects of a hobby, especially legal liability, are covered by a homeowners policy. However, your activity may need special or even business coverage (see part 2 of this series). The way you spend your leisure time should be a happy diversion. Don't let your enjoyment be interrupted by inadequate protection. Discuss your special interest with an insurance professional who has a special interest in meeting your coverage needs.

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