Worth the risk? It’s hard to insure a cathedral

  • This photo taken on Monday April 15, 2019 shows Notre Dame cathedral burning in Paris. Firefighters declared success Tuesday April 16, 2019 morning in an over 12-hour battle to extinguish an inferno engulfing Paris' iconic Notre Dame cathedral that claimed its spire and roof, but spared its bell towers. (AP Photo/Vanessa Pena) Vanessa Pena

  • A crane hoists scaffolding past gargoyles outside the Notre Dame Cathedral in Paris, Thursday, April 18, 2019. Nearly $1 billion has already poured in from ordinary worshippers and high-powered magnates around the world to restore Notre Dame Cathedral in Paris after a massive fire. (AP Photo/Christophe Ena) Christophe Ena

  • A bunch of flowers lies by the Seine riverside near the Notre Dame cathedral, background, in Paris, Thursday, April 18, 2019. France is paying a daylong tribute Thursday to the Paris firefighters who saved the internationally revered Notre Dame Cathedral from collapse and rescued its treasures from encroaching flames. (AP Photo/Francisco Seco) Francisco Seco

  • This image provided by Vassar College on Thursday, April 18, 2019 shows a 3D map of Notre Dame cathedral. Images by the late associate art professor Andrew Tallon, who used lasers to scan Notre Dame to offer a detailed survey of the cathedral. Tallon did the work to try to get into the minds of the buildings, to figure out what made the structure stand up. (Andrew Tallon/Vassar College via AP) Andrew Tallon

Associated Press
Published: 4/19/2019 5:16:13 PM
Modified: 4/19/2019 5:16:01 PM

Rebuilding Notre Dame, the 800-year-old Paris cathedral devastated by fire this week, will cost billions of dollars as architects, historians and artisans work to preserve the medieval landmark.

But contrary to what one might think, little of the money will come from insurance companies.

Notre Dame and all of its pre-1905 artworks are the property of the French state and not insured. The French government is responsible for costs like restoration and rebuilding because it has the financial resources to do so – and because taking out private insurance on something as valuable as a national monument would be difficult and expensive.

Unique forms of property, like monuments or religious relics, are hard to value. How do you put a price tag on sentiment, history and international renown?

“A small number of specialized insurers, notably Lloyd’s of London, are often willing to accept the risk of undertaking such valuations, but the resulting premiums are very high,” said Bruce Huber, professor of law at the University of Notre Dame in Indiana. “The insurance business operates by spreading risk over a large number of similarly situated insured parties, and obviously in the case of unique assets, there is not a large pool!”

High-net-worth individuals, corporations, and other entities with substantial assets – like France or any other nation-state – often choose to self-insure instead.

“The cost to them of financing the occasional repair or replacement of a unique asset, they may calculate, will be lower than the sum of the insurance premiums,” he said. “Thus I would doubt that Egypt has purchased a comprehensive insurance policy for, e.g., the Pyramids of Egypt.”

While French authorities are still investigating the cause of the fire at Notre Dame, attention has focused on a $6.75 million renovation project that was underway when the blaze broke out. The building contractors would have been required to have insurance, but the payouts from that would be “a drop in the ocean” compared with the cost of restoring the cathedral, said Robert Read, Head of Art and Private Client at Hiscox, an international insurance company that started as an underwriter on the Lloyd’s of London market.

Rebuilding a centuries-old landmark is difficult and expensive because the goal is to preserve the original character of the building, not just replace it.

Paul Humphris, specialist claims consultant at Ecclesiastical Insurance, said the primary issue at the moment at Notre Dame would be safety. If parts of the building look like they are going to fall down they will do whatever is necessary to ensure long-term stability. That might include “a certain element of violence” in knocking things down to make sure that no one gets hurt. But when possible, they will restore it on a brick-by-brick basis.

They will likely use men on cranes, drones, 3D imagery and detailed surveys to offer forensic detail.

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