Art News and Articles: FAR® Columnist
The Fine Art of Selecting Insurance Coverage for Fine Art and Collectibles
by Anayat Durrani
Protecting your fine art collection includes tagging and registering each item with the Fine Art Registry™ and then taking steps to see that it is sufficiently covered by insurance. And, if your existing homeowners insurance policy doesn't cover it adequately, there are several insurance companies that specialize in insuring art that can.
Because a regular home insurance policy, which covers your personal property, has limits on the amount it will pay for certain types of valuable items, shopping around for companies that insure fine art and collectibles is an absolute must.
There are a number of companies out there that offer insurance on fine art and collectibles. Valuation differs from company to company, as do policies. Here is a sampling of some of them:
Chubb Group of Insurance Companies
Are your valuables worth more than $1,000 (per item)? More than $5,000? Then Chubb says they are the company for you with their Masterpiece Valuable Articles Coverage.
“Fine art insurance is inexpensive, generally running from one to two cents per $100 in valuation,” Mark Schussel of Chubb told FAR. “Price is not the issue in fine art insurance. The scope of coverage, service and fine arts expertise are the key factors to consider.”
What Chubb offers:
- Itemized coverage — allows you to determine the insured value of each of your possessions. In the event of a total covered loss of an item, you will receive 100% of the insured value, with no deductible, and no depreciation.
- 150% replacement cost — provides safeguards for items that appreciate. If the market value (before the loss) of an item lost or damaged in a covered loss is greater than the itemized amount listed on the policy, they will pay the market value up to 150% of the itemized coverage amount for the item.
- Breakage protection — coverage for breakage or damage to fragile items is automatically included.
- Coverage for "mysterious disappearance” — Chubb provides coverage when valuable items are lost or misplaced, especially when they disappear away from the home. Many homeowners policies don't cover this.
- Worldwide coverage — valuables are automatically covered wherever taken, anywhere in the world.
- Appraisal — Chubb does not require an appraisal for every piece that you itemize. For most possessions, they need a description of the item and a value. They generally require an appraisal only for fine art worth more than $100,000, jewelry worth more than $50,000, and any other item valued over $25,000.
- Coverage for pairs and sets — If a piece of an itemized pair or set (like earrings or a set of silver) is lost or damaged in a covered loss, you have the option to provide them with the remaining piece(s), and will receive the coverage amount for the entire set.
- Cash settlement — You are not required to replace itemized valuables in the event of a loss. You can choose a cash settlement, or replace your valuables at the dealer of your choice.
- Coverage of newly acquired items — If a new item is acquired and you already have similar articles insured with itemized coverage, the new item is automatically covered for 90 days for up to 25% of the total itemized coverage for those similar articles (maximum $50,000).
“We also have an outstanding claims reputation. We are one of the largest fine art insurers in the world and insure many collections of top art collectors,” says Schussel.
Atlantic Mutual
Founded in 1842, Atlantic Mutual focuses on serving the personal insurance needs of individuals with substantial assets to protect. The Valuables Policy at Atlantic Mutual says it offers broad coverage on a worldwide basis and carries no deductibles. If you have valuables that exceed $10,000, they recommend considering a valuables policy to supplement homeowner’s coverage.
The Valuables Policy offers:
- "All Risk" coverage — which protects against losses as a result of flooding or breakage. These are normally not included in the homeowner’s policy.
- No deductibles — if an engagement ring is lost, the replacement cost is covered from the first dollar.
- Schedule individual items at a specific value or choose blanket coverage for groups of valuables.
- They settle covered losses at least at the scheduled amount or, if higher, at market value up to 150% of the scheduled amount.
- Automatic coverage for newly-acquired objects.
AXA Art Insurance Corporation
AXA distinguishes itself as the only insurance company specializing exclusively in fine arts and collectibles. It employs 50 full-time art historians around the world and has an extensive network of art-world specialists including curators, appraisers, adjusters, conservators, tax attorneys and shipping agents specializing in the arts and collectibles. AXA serves all clients, from the first time collector to the most established collectors. The company is a co-founder of the international Art Loss Register [link to article on registries].
AXA offers:
- Broad, all-risk worldwide coverage.
- Large and small capacity insurance.
- Blanket location coverage.
- Automatic coverage on newly acquired property of up to 25% of total policy limit within a 90-day reporting obligation.
- Claims processing.
Art Services:
- Evaluations that assess the current market values of clients’ collections.
- Loss prevention advice and disaster planning.
- Transportation, shipping and handling consultation.
- Fine art collection schedules (inventory and values of all items in your collection).
- Curatorial and collection management services.
AIG
American International Group, Inc. (AIG) are world leaders in insurance and financial services, and are the leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG Private Client Group provides comprehensive insurance products and services to help meet the unique risk management needs of high net worth individuals.
For Private Collections it offers:
- Worldwide Coverage — Covers loss/damage to collection while traveling/in transit. Facilitates travel with fine art and collectibles and covers purchases made abroad.
- Newly Acquired Items — Automatic coverage; 25% of same category limit for 90 days. Acquisitions protected at the time of purchase; grace period before adding item(s) to the policy.
- Care, Custody and Control — Provides up to $1 million for categories currently insured while in the policyholder’s care. Facilitates taking item(s) home on loan before confirming purchase.
- Valuation Clause — Covers agreed value or current market value, up to 150%. Protects against market volatility; benefits those with well-managed, closely monitored collections.
- Repair and Restoration — Coverage Excluded from form but available upon request and with underwriting approval. Helps preserve value.
- Pair or Set Clause – Insured’s choice whether to repair, replace or surrender undamaged item(s) at the time of loss.
- Transit via Common Carrier — FedEx and parcel post covered; US mail covered up to $10,000. Transit protocol and shipping/ packing advice available; AIG Private Client Group’s collection management experts can oversee transit.
- Coverage at Exhibitions — Protects pieces during transportation to/from exhibitions and while on display.
“Aside from underwriting excellence, the depth of in-house experience we bring to protecting and preserving private collections is unique in the industry,” says Andrea Bezark of AIG Private Client Group.
The companies mentioned above either focus entirely on or have departments that deal with insuring fine art, along with their own policies. However, there are other insurance companies to consider as well. Specialist brokers with expertise in insurance of fine art and collectibles can also be quite useful. These include Henderson Phillips, owned by Arthur J. Gallagher, Willis Group Holdings, and Acordia, owned by Wells Fargo, among others. Brokers have access to all insurance companies and can develop and locate the appropriate coverage for you.
Useful links:
Click on the links below to find an agent:
Tips for Adequate Coverage of Your Fine Art:
- Take inventory of your valuables. This means going through the steps to register each of the items in your collection with the Fine Art Registry™ which automatically requires that you photograph and describe each item and makes a permanent record of this in a central database.
- Get an appraisal of your most valuable items. This will require consulting with an accredited appraiser. Make sure you hold on to the appraisal and any other documents that show the value of your collection. And, if an item needs repair and preservation, find a conservator. (Fine Art Registry™ services will soon offer the ability to digitally upload supporting documents, such as appraisal reports to its database upon registration. This will also allow for the updating of yearly appraisals as may be required by insurance carriers.)
- Understand what your homeowner’s insurance policy covers exactly. Work with an insurance agent to figure out the right type of insurance for your collection. Compare the coverage to your homeowner’s policy to understand the value of the extra coverage.
- Discuss with your agent any additional art services your insurer may offer along with the insurance policy.
- Study the sections of this article which help you distinguish between insurers and find the one that is most suited to your particular needs.
— Anayat Durrani | February 26, 2007
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The views and opinions of individual authors/contributors expressed on the FAR® web site do not necessarily state or reflect those views and/or opinions of Fine Art Registry® or its agents or subsidiaries.
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