There are many different reasons people collect art and antiques. It’s generally accepted that collecting art makes people happy and reduces stress, and it may have a positive impact on your quality of life. Many people purchase art to enhance their interior design or add an element of luxury to their homes. There’s no doubt that art is an investment — maybe not always a monetary one, but definitely an investment in your quality of life. Either way, art is an asset that should be protected. So, as soon as you start thinking about purchasing a piece of art, you should consider obtaining a suitable insurance policy.
Art Gallery
Consider Purchasing Special Fine Arts Insurance Policy
Many first-time art buyers do not realize that their homeowner’s insurance provides only limited coverage on high-value items such as artwork. This means that their valuable pieces of artwork are not sufficiently protected against theft, damage, or loss. In some cases, it might even be that without proper fine art insurance, the piece they have just bought is completely unprotected from the very moment they purchased it. Many people forget to insure their new pieces of artwork after they purchase or inherit it. As Robert Pittinger, director of underwriting, AXA ART Americas, which is one of North America’s leaders in art insurance, pointed out a few reasons, suggesting,
There may be strong sentimental value attached to the inherited piece(s) which might not have financial considerations. Also there could be lack of awareness about the benefits art insurance brings, such as assisting with costs associated with conservation or loss replacement should damage occur.
The first step you should do before purchasing a valuable work of art is check what your existing insurance covers. It is very likely that your homeowner’s insurance policy is limited and does not cover your new piece of art. In such case, you can either purchase an extension to your homeowner’s policy coverage or get a separate insurance policy for fine arts. We recommend buying separate fine arts insurance coverage, which might be more expensive than an addition to a homeowner’s insurance but has several advantages. Special insurance includes coverage relating to fine art that makes it easier to prove what you have, and you will also receive better coverage. Robert Pittinger noted,
There are various insurance options available to help safeguard the collection in your care. Whether you collect fine art, collectibles, wine, antiques, jewellery, musical instruments, comic art, sports memorabilia, rare books, stamps, rugs or coins there are various art insurance options. Take the guesswork out of choosing the best coverage for your collection. Seek the advice of a fine art insurance specialist who understands collector’s passion for fine art and collectibles and employs insurance professionals with training in fine art.
The most important aspects to consider when purchasing fine arts insurance include the risks covered by the policy, exclusions, the amount of coverage, whether it covers transit from one location to another, the valuation policy, and the claims policy of the insurer. Furthermore, we recommend that you obtain defective title coverage. It will cover you in case you purchase a piece of art from someone who is not a rightful owner. This means that if someone claims that the item you purchased (during the period that you have been insured with defective title coverage) is not rightfully yours, you will be reimbursed by the insurance company.
Of course it is important to choose the right insurance provider. We recommend that you consider a provider that specializes in insuring art. Not only will they be able to tailor an insurance policy that fits you perfectly, but they will also provide valuable advice on art insurance as well as on restoration and protecting the art from deterioration, theft, and other threats. Moreover, large all-purpose insurers often lack experience and expertise in certain works of art and may have problems evaluating values.
Some insurance companies will automatically cover a new addition to your art portfolio if you inform them about the purchase within a certain period. However, this is not a common practice of all insurance providers, so be careful and contact your insurance company before you make any new acquisitions. If possible, we recommend that you purchase coverage for your collection that automatically expands with all new additions to your set.
FineArt Gallery
Determine the Value of Artwork
It’s of crucial importance to get the right amount of coverage. Art is a unique area of commerce and the value of a piece of work is often subjective. The value of your collection can change each year — not to mention that it has both intrinsic as well as personal value. However, when determining the value of artwork for the sake of insurance, you have to be as objective as possible. It is possible to determine a common market value. Art insurance providers will not rely on a single index to determine the value of your artwork, but would rather consult numerous sources.
In addition, we recommend that you get an individual professional appraisal on a regular basis. An up-to-date appraisal will ensure that you will receive the right amount if something happened to your artwork. For example, if the author of the artwork dies, the price of the piece increases by up to 200 per cent. In this situation, you should review your insurance policy to make sure that it covers the whole value. As Robert Pittinger remarked,
Art values are dynamic and constantly changing. It is always advisable to monitor the value of your collection. AXA ART recommends at least once per year. We work with top Canadian brokers to provide art insurance solutions for creditors. Contact your insurance broker who can assist with making adjustments necessary.
On the other hand, if the price of your collection goes down, you can reduce the premiums on your art insurance policy and save some money. A professional appraisal should include different explanations, comparisons, and conclusions. It should also provide evidence that the artwork is authentic. Watch out for fake appraisers who give out useless certificates that do not include any relevant information.
Do your research; speak to a fine art expert or dealer about the condition of the art work; sales and auction activities of the artist and trends in the market. Seek the advice of a qualified appraiser.
says Pittinger.
Professional Fine Art Appraisers in Toronto:
- Appraisal Associates, 95 Trinity Street, Suite 104, 416-368-4334
- Mayberry Fine Art, 110 Yorkville Ave, 416-923-9275
- Waddingtons.ca, 275 King Street East, 2nd Floor, 416-504-9100
- Odon Wagner, 198 Davenport Rd, 416-962-0438
- Art Advisory.com, 2389 Bloor St. West, Floor 2, 416-366-9770
- A. H. Wilkens Auctions & Appraisals, 299 Queen Street East, 2nd Floor, 416-360-7600
Artworks
Do Your Homework
When buying a new car or television, we usually consider a variety of different parameters and characteristics to make sure that it is the right one for us. The same works for purchasing an insurance policy. In order to know whether a certain insurance policy suits you or not, you have to understand what is covered and what happens in cases of loss or damage. Read the whole fine print and do not hesitate to discuss any part that is unclear with a professional. Try to anticipate different scenarios and verify that your insurance policy will protect your art collection in such cases.
Moreover, gather all the important documents regarding the purchase and ownership of the artwork and file them in a safe place. These include, current appraisals, sales receipts, provenance, a replacement estimate, and photographs of the works. It is also important that you protect your art collection by different possible means. Your art insurance premium depends on the risk profile of the art that you are insuring. We recommend that you take precautionary measures such as installation of a decent security system, smoke detectors, and storing the collection in a safe and dry area.
Art insurance is not cheap, and many people neglect it. However, considering the value of fine artwork and its vulnerability to damage or theft, you must obtain an insurance policy covering your collection. The value of your collection changes and you should take care of your art insurance accordingly. Insuring your art collection will not only protect your future financial commitments but also provide you with peace of mind.
VSMC
