If you are new to the idea of collecting art, it is very likely that the idea of insuring you art is also new to you. However, it is unlikely that an average home-owners insurance policy will cover theft, loss or damage to these valuable acquisitions. Don’t be put off, insuring your well loved new treasures should be neither expensive nor complicated.
Why insure art specially?
Your primary motivation in buying contemporary art is most likely to be that you just love it. Another contributing factor may be your desire to support upcoming artists. Making a good investment may have been the last thing on your mind when you chose your new artwork. However, the fact is that young artists work can suddenly escalate in value, reaching prices you (and they) never imagined possible in a matter of a few years. Your unknown artist of today may well be tomorrow’s Picasso.
Where to get good advice?
Some insurance companies are less knowledgeable about covering artworks than others. It is advisable to look to the advice of a good insurance broker who has some expertise in art insurance. They will be able to advise you if you should be looking for a fine art insurance, rather than depending on your current household valuables policy. Local art magazines are a good resource when looking for such service providers. You should look out for companies with an established reputation and successful and dedicated claims department.
All in one go
If your artworks are individually worth less than $10,000 each, you can go for a blanket policy. Under such an arrangement you will not have to list all the items involved. However, the most you can claim for any single artwork will be $10,000.
Be ready for escalating value
If you decide to itemize your artworks, you must establish an agreed value for each individual item. The important aspect here is to choose a policy that covers escalating market value. As we already said, who knows where the next Picasso will appear from, he could be hanging right in your living room! Many policies recognize that prices can quite unexpectedly and dramatically escalate in value, under such policies your claims can be settled for up to 150% of the artworks original insurance amount.
Ready for anything
Take care to select a policy that covers different ways your artwork could be damaged. Artworks are often referred to in the insurance world as “Floaters”. This is because they tend to be moved around a lot. Try to have your insurer come up with a policy that covers not only theft and breakage in your home, but also any mishap that may befall it while in transit at any time.
Read the small print
If you live in an high risk earthquake or flood area you will want your artworks to be insured against this. Some insurers may be unwilling to comply, so make sure to read the small print.
Keep up to date
Take yearly stock of your fine art insurance and your insurance needs. If you have bought more art, you may need to include it in your existing insurance coverage. If your collection has risen in value, you may need to readjust the terms of your policy.