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How To Insure Your Art

Anne Gundlach and Davis ClemHi! Davis here! I’ve taken over the blog from Arlene this week. I wanted to write about something that is an extremely important part of being an art collector and owner: insuring your art.

Every week we get numerous questions from collectors and owners about art including:  how to sell art, what to look for when framing your art, and the best way to take care of your art. Another imperative topic is how to protect your art, specifically by insuring it.

I spoke with Anne Gundlach, owner of the Anne Gundlach State Farm Agency in Greensboro, North Carolina, to find out all of the details that art owners need to know when insuring their art.

What You Need To Insure Your Art:

The first question we often get asked is “Well, what information does my insurance agent need to insure my art for me?” Anne gave me the following list of important documents and information to have:

  • The original Bill of Sale is preferable for any art, unless your art has changed in value since date of purchase.

    • If your art has changed in value you will need a letter of value on letterhead from the gallery or company it is from. The letter must be dated within two (2) years.

    • The letter must include: a detailed description of the art, including the title, media, dimensions, artist, date created, scene portrayed, and any framing value.
    • The appraiser or evaluator must be knowledgeable in the art being appraised; for certain items a certified appraisal may be necessary.
  • If your art has never been insured before, it is likely your agent will also have to see the piece(s) for consideration in person. They may also need to photograph the work(s) for the policy.

    • These precautions are taken to authenticate the art, and prevent fraud, or insurance of stolen and/or unethically attained items.

If your art was insured outside of the United States or Canada, particularly if the insurance values are in different currency or the policy is not in English, there will be extra steps for authentication and establishing the “stated value” of your items

Why Homeowners Insurance Is Not Enough for Art

Anne and I discussed what type of policy is best for insuring your art.

A scary fact that many people do not find out until it is too late is  your regular homeowners insurance, and personal property coverage, are not the best, or most adequate, coverage for your art.

Most homeowners insurance policies, and personal property coverage, are only valued at 70% of your dwelling coverage. There is no special insurance coverage, or limit, for art and other special articles under personal property policies.  For example: if the personal property coverage is for $180,000, and there is an art collection worth $90,000, the homeowners are left with only $90,000 for the rest of their belongings.
If the home is destroyed in a fire, they will have only $90,000 to replace the home’s contents and their personal items: electronics, furniture, furnishings, appliances, clothes, etc. Or, they cover all personal belongings first, and end up losing coverage for the art that was damaged and/or destroyed.

When a homeowner is handling a personal disaster, the last thing they want to do is choose between their art collection and investment and personal belongings being covered by the policy!

Also, the above mentioned policies only cover specific risks: fire, smoke, vandalism, and water to name a few. It does not cover all types of damage or loss.

What is the best way to insure your art?

The best type of policy to insure your art is a separate Personal Articles Policy (the name may vary between agencies).

This type of policy protects special items including, but not limited to:

  • Art
  • Jewelry
  • Collectibles
  • Furs, etc.

Personal Articles Policies cover:

  • Standard risks and damages,
  • Theft, and
  • Accidental direct physical damage (which is arguably the most common risk)

The accidental direct physical damage is the part of the policy that is most important. This ensures that if your art is damaged by a guest at a party, or your grandson flying his remote control helicopter through it, you will not have to come out of pocket to repair or replace your art.

These policies include replacement cost coverage: the cost to repair or replace the property, without deduction for depreciation, up to the policy’s limits.

Since many original fine art items are non-replaceable, they are covered based upon the stated value established with the information discussed in the first section (art appraisals, bill of sale, etc.)

Personal Articles Policies are separate from your other property and home policies; they will have a separate, low (sometimes ZERO) deductable.  This provides the insurer extra comfort and confidence, knowing that there will be far less likelihood of inadequate compensation in case they need to file a claim. It has few limitations and exclusions compared to homeowners and personal property insurance.

So, the million dollar question: Is your insurance policy enough to cover your art collection?

Is your art even listed on an insurance policy?

If you aren’t sure, it’s time to contact your insurance agent and ask! Or, better yet, call Anne’s agency (336-632-4411) to see how she can help you best protect your home and art today.
But, before you go, don’t forget to make sure you have all of the paperwork you need.

Check out our blogs on valuing your art to make sure your ducks are in a row for your visit!

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