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The finer points about fine art insurance

By HUB SmartCoverage Team on May 27th, 2019

Art may be in the eye of the beholder, but there are some finer points owners must know to protect it.

The reasons people collect art is as diverse as the types of art collected. Love of art and artists is a motivating factor for many, but so is its investment value.

As a result, this specialized insurance coverage provides financial protection in the event an art investment is lost, stolen or damaged.

Definition of art

The definition of art is quite broad. It can include jewelry, china, ceramics, vintage cars, musical instruments, paintings, drawings, photographs, textiles, sculptures, rare stamps, coins, books, manuscripts, sports memorabilia, antiques and more.

Pieces can be made out of various materials: precious metals, precious stones or everyday materials - like paper or clay - and stone, metal or even liquid.

Art can be covered under a homeowners’ policy as contents or individual items can be listed in a separate rider to the policy. But people are not often aware the perils covered under the typical homeowner’s policy do not cover all the risks related to artwork.

A collector might require a fine art policy if they have:

  • A unique item that will be difficult or impossible to replace
  • A collection of objects whose value would drop if one piece were damaged or lost
  • Artwork lended to museums or exhibitions
  • Valuable items held in storage
  • Fragile, delicate or very old, original items

Most fine art policies will cover perils like fire and theft, while also compensating for loss of value and accidental damages. Typical policy exclusions include things like war, nuclear explosions, moths and vermin and “inherent vice” (artworks that were not made with longevity in mind).

Damage in transit

A good example of a unique aspect of art collecting that art insurance policies are designed to accommodate is pieces are often moved. Collectors move pieces between homes or to and from off-site storage, they may send pieces off to museums and galleries for shows and exhibitions or to auction houses. As a result, “accidental damage” during transit is one of the most common claims.

Insurance companies will want to see documentation of ownership, an appraisal, receipt of purchase and photographs of the work. It’s desirable to provide a record of ownership if the piece has passed through several owners, which is known as provenance. The more official the documentation the better in the event a claim must be filed.

Insurance carriers and brokers that specialize in this area can advise about best practices for restoration, transportation and storage. They can also point policyholders to experienced third parties who will help them to mitigate their exposures.

Related story:

Fine art insurance policies prove worth during disasters

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