What Is Fine Art Insurance?

Art in the realm of insurance refers to anything possessing a value that goes beyond its function and properties – this includes antique coins, manuscripts, books, sculptures, pottery, and more. Estimating the value of these fine art objects considers many factors such as the time period, place of origin, rarity, and demand. Generally, fine art insurers calculate premiums and payouts based on:

• Auction price/Market value at the time of claim
• Purchase price
• Replacement cost
• Declared value

Fine Art Insurance provided by reliable insurers goes beyond standard household property policies. Typically an all-risk policy provides art investments with financial protection that fully covers their value.

Why is Fine Art Insurance Needed?

Risks abound: Whether a single piece or a collection, fine art needs to be protected against hazards to retain its value. Some of these risks include:

• Damage and loss in transit (highly common)
• Inadequate packaging
• Theft
• Vandalism
• Accidental damage in storage facilities.

If you own a public collection of art, your art's disclosed location and the frequent number of moves increase the risk of theft, loss, and damage.

Homeowners' insurance may not suffice: Many people assume that having a homeowner's policy is enough to protect their valuable artwork and collectibles. However, homeowners' policies generally limit the amount of money reimbursed for art, regardless of how useful the insured object is.

For instance, a homeowners' policy of $20,000 coverage may only cover $5000 of art. So if $20,000 worth of art is stolen, only the $5000 will be paid out.

Who Should Get Fine Art Insurance?

Not everyone may need Fine Art Insurance. For instance, you may already have official documentation of all the previous owners of your artwork (called a provenance), rendering title insurance unnecessary. Generally, those who collect multiple pieces of art benefit from title and property coverage, such as:

• Artists
• Dealers in art
• Corporate collectors
• Individual collectors
• Museums
• Educational facilities
• Gallery owners

Types of Fine Art Coverage

1. Title Coverage: There can be instances where, although you have purchased a piece of art, its rightful owner later comes out and claims ownership of the work. This may seem like a rare and unlikely situation - but it is a real risk considering the hidden identities of art buyers and the enormous, still-growing black market of illegally obtained art. This insurance thus helps to prevent loss from possible defective titles.

2. Property Insurance: This type of insurance protects against your artwork's damage, loss, or theft. Property Insurance policies are written on an all-risk basis cover nearly every conceivable kind of loss (although certain perils like war, nuclear events, and terrorism may not be covered). The policy will clearly state the covered situations. However, the insurers may require you to initiate some action (such as filing a police report or attempting to recover the piece) before they compensate you.

Ready for a Quote?

Not all insurers provide art insurance that adequately covers your needs. At Carriage Trade, we partner with multiple A+ rated companies, helping you find the coverage that suits you the best! Reach out to us at 516.358.3612 or mjakob@carriagetradeinsurance.com to see how we can help safeguard your fine art today.