Maybe a longtime interest in artwork has recently led you to start collecting. Or perhaps you’re buying up fine art as part of a larger investment strategy. Whatever your reasons for venturing into art collection, we know it takes a great deal of planning. From carefully researching and evaluating pieces to negotiating prices and handling shipping and delivery logistics, buying art requires a significant outlay of not just money but also effort. So, as you build a valuable collection, and put in time, energy, and funds, you’ll want to make sure each piece is properly insured for incidents and accidents that could potentially damage or destroy them.
What happens if you don’t have the right insurance in place for your fine art? Let’s say you need to repair your cracked sculpture, a gashed oil canvas, or a water-damaged work of photography. You would likely have to cover most of the cost of restoring the artwork to its original condition. In a worst-case scenario, like a theft or fire, your pieces—and their associated values—might simply be a total loss. To make sure it never comes to that, the Fred C. Church team is providing you with information on how to best insure your artwork.
Does Home Insurance Cover Artwork?
Even if you’ve only just begun your art collection journey, your standard home, condo, or renters insurance probably won’t suffice for insuring your artwork. While your policy might include some coverage for fine art, there are several reasons why it’s not wise to rely on it to protect this type of valuable item:
- If there is a loss, there is typically a maximum amount an insurer will agree to pay per piece of art and in total for all your artwork. These limits are generally not nearly enough to cover the full value of one work of art, not to mention a collection of several pieces.
- Additionally, if a loss impacts other belongings as well as your artwork, you may not have enough content coverage left to repair or replace these personal items either.
- Most standard policies exclude certain events from coverage, including things that commonly happen to artwork such as accidental breakage, damage in transit, theft, and more.
- Coverage is contingent on your insurance company agreeing with you on what actually qualifies for “art”—and their definition can be vastly different from what you believe constitutes artwork.
- Any insurance payout you do receive for a loss is likely to be reduced by an applicable deductible and a depreciation cost.
These are just a few reasons why it’s essential to explore specialized artwork insurance options that will typically provide much broader coverage—and more peace of mind—no matter the size or value of your collection.
Three Options for Insuring Your Artwork
1. A Scheduled Personal Property Endorsement may be the best choice if you’re a new collector, with one higher-value piece or a few starter ones in your collection.
By adding a Scheduled Personal Property Endorsement to your home, condo, or renters insurance policy, you will separately list out each individual art piece you own and be able to insure it up to its appraised value. There are several benefits to scheduling your artwork this way:
- You get broader coverage for a wide variety of incidents that can happen to your artwork, including if you accidentally damage it, it’s stolen while you’re traveling with it, or you lose track of its whereabouts (yes, this actually happens to many collectors).
- Your insurer will typically pay to have your artwork restored up to its appraised value, and not subject to a deductible, if it has damages that are repairable.
- Your insurer will typically reimburse you in the amount of the appraised value, and not subject to a deductible, if your artwork is declared a complete loss.
2. A Blanket Coverage Endorsement may be the best choice if your total art collection value is under $300,000 and you frequently change the art pieces you have in it.
Instead of individually listing each piece of artwork in your collection as you must do when you schedule it, a Blanket Coverage Endorsement provides you with a single, overall coverage amount for all your artwork. In addition, with blanket coverage, you’re generally not required to supply an insurance company with an appraisal, bill of sale, or any other documentation to secure coverage for your fine art. However, if you do experience a loss, you will have to produce proof of your artwork’s value as part of the claims process.
Although most Blanket Coverage Endorsements for artwork will include a per-item and a total collection maximum, these limits are typically much higher than what is available in your standard home, condo, or renters policy. That being said, it’s crucial to carefully review the limits an insurance company is offering to make sure they adequately cover the total value of your collection.
3. A separate fine art insurance policy may be the best choice if you have several art pieces that are of higher value or rarity and you are actively acquiring additional items for your collection as an investment.
At Fred C. Church, our Private Client Group works with several insurance companies that specialize in customizing coverage for the serious fine art collector and investor. While each of these insurers has unique offerings for clients, the following are some of the most common fine art protection plan features:
- Provides worldwide coverage, which means your artwork is protected no matter where in the world it is lost, stolen, or damaged, including if the loss occurs in transit, in storage, or on display.
- Protects against a wide variety of potential events, including theft; fire, smoke, or water damage; disappearance or loss; and accidental breakage.
- Accounts for increases in the market value of your art piece, which means that if your artwork’s value before a loss exceeds the amount of coverage you have, your insurance company will pay for the increase in market value up to a specified amount, typically 150% of the amount itemized on your policy.
- Automatically covers newly acquired items for a specific period, generally about 90 days from the date of purchase.
- Uses claims adjusters with specialized knowledge in handling a fine art loss.
- Offers value-added fine art services, such as in-house collection management experts and access to appraisers, conservators, packers, shippers, and warehouses worldwide.
The best first step to getting the right insurance carrier and program for your artwork is making sure you and your insurance professional know exactly what you have in your collection and its value. So, if you haven’t already done so, we recommend creating an inventory of your pieces that includes details such as your artwork’s title and artist, condition, dimensions, and date of purchase. Even if you only have a one-piece art collection right now, having this information at the ready will not only be extremely beneficial in matching your artwork with the right insurance solution but also will greatly facilitate the claims process if a loss occurs.
Fred C. Church Helps You Find the Art Insurance Solution That Best Fits Your Collection
Our team carefully evaluates each client’s distinct needs and priorities as an art collector. Then, we assist them in selecting the type of coverage and the insurance company that may be right for the art pieces they have today as well as the collection they plan to curate and nurture over time.
We have relationships with several insurance companies that specialize in protecting treasured art pieces and other collectibles. So, whether you need support with the artwork appraisal process or cataloging, safely storing, preserving, or transporting your art, we can match you with a knowledgeable insurer that will provide you with access to the expert resources you specifically require. In addition, many of our insurance partners offer risk management insights to collectors, including where to place pieces within their home, office, or exhibit or gallery space, in order to minimize the likelihood of a loss.
If you have any questions about insuring your artwork, please give us a call.
