people are always asking me about insurance for their art.
do they need it? there was a flow chart in the september art + auction that purports to answer that question by asking 4 questions. their recommendation, sullied with my opinions follows:
1. is your collection worth more than $100,000?
2. is it likely to appreciate in value?
3. would your collection be difficult to replace?
4. do you lend your objects or move them frequently?
if the answer to all 4 questions is “no,” your homeowner’s or tenant’s policy is probably sufficient.
(my) 5. check with your agent to make sure that your homeowner’s or tenant’s policy covers art/collectibles and whether it covers them at replacement value. your insurance carrier is likely to ask for a list of specific works along with their values. you well may be able to purchase a relatively inexpensive “rider” to your existing policy that will cover your collection.
if you answered “yes” to questions 1-4 or “no” to 5 you need fine art insurance. but it won’t come cheap.
how do you know the value of what you own? you can usually get the dealer who sold you the piece to write you a letter with a current fair market value. they should do it as a courtesy. if the work was given to you, you’ll need to pay a professional appraiser. they’ll charge you by the hour to call the dealers who represent the artist for the current fair market values and/or research auction results.
everyone, whether they intend to sell their art or not, hopes that it increases in value. it’s that part of human nature that makes the antiques roadshow so popular. it’s difficult to know ahead of time whether individual works will appreciate. but if you look enough and collect enough and keep the work long enough, chances are at least some of what you own will become more valuable. this is why it’s critical that whatever insurance you’re counting on to cover your art pays you the fair market value at the time of the loss, not what you paid for the piece.
if you’re collecting unique objects — paintings or very rare antiques — by definition, you couldn’t replace them if they are destroyed or stolen. if you’re collecting multiples, such as prints or contemporary editioned photographs, they can generally be replaced. though in some cases it may be difficult or more expensive than when you originally purchased the work.
if you lend your art to a museum exhibition, a condition of the loan should always be that the institution insures the work from the time it’s removed from your wall until it’s returned (the term in the trade is “nail-to-nail”) for the value of the work. the museum’s insurance policy covers the work.
when moving your art, always use a professional. but do not make the mistake of thinking that because you use a specialized art shipper to move your artwork, that their insurance is sufficient. if there’s a loss, you’ll file a claim with your insurer who will pay you, then go after the insurer of the art shipper.