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When it comes to collections of classic cars, fine wines or Picassos, specialized insurance is a no-brainer. But what about the men and women who prefer to hang works of art in their walk-in closets? It wasn't until an insurance agent at AIG's Private Client Group saw 150 Birkin bags in a client's closet that the company realized there was a need to insure these priceless pieces that wasn't met by existing policies.

"Couture is an area that people are passionate about—these are assets, these are collectibles and there was nothing in the market to protect them," says Alexis Lehrer, a Houston-based strategic marketing manager for AIG Private Client Group.

Lehrer spent two years working with Garde Robe, a company that supplies high-end wardrobe concierge services, to learn about the biggest risks to a wardrobe that aren't covered by typical homeowner's insurance and formulate a framework for a new, specialized insurance product. One of the most common issues affecting fashion collectors is moth damage, so coverage includes the cost of reweaving, an expensive and intricate process.

"I know more about moth damage and larva than an etymologist," says Lehrer.

Another risk area is the cleaning process. Gowns are typically cleaned by being sent out to high-end dry cleaners which in Houston almost always means shipping them. Even when serviced by a specialist, the wrong technique can permanently ruin a garment in seconds—as can the typical wear and tear just from taking a piece of a collection out of the closet. 

"Someone might have a handbag from YSL when Tom Ford was the designer, which is a very high-demand, collectible item. If a piece gets damaged when she is carrying it out on street—these are not always behind glass—if the hardware is damaged we can work to have it repaired, but not it's not going to have the same hardware, so as the market value decreases we pay the loss in value," says Lehrer.

With the approval of state regulators, Private Client Group launched its couture and wearable designer collection insurance in September in New York, in conjunction with Fashion Week. Texas is the second state to approve the coverage, and California became the third in early December. According to Lehrer, the company chose these states as its first markets because they are full of enthusiastic fashion devotees with covetable, couture closets.

"There are serious collectors here," says Lehrer, noting the high-caliber lineup of designer handbags, Chanel suits and Pucci prints that are donated annually to charitable events.

The policies cover not only couture dresses and bespoke suits but also designer shoes (and, this being Houston, cowboy boots) and luxury handbags, which can cost as much as a car or more. A Hermès Birkin bag, for example, was sold at auction in Hong Kong this summer for a record-breaking $222,000.

"I thought I understood fashion. I thought I had a good idea. I knew nothing. A turning point for me was when I touched the haute couture and realized it represented thousands of hours and the skills only a few artisans in the world have. I saw that this is art, this is a sculpture," says Lehrer. "It's about appreciating how beautiful, complex and important fashion is, as an art form, to our society. People who buy it are buying into a very old art form."

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