When it comes to insuring artwork, there are, unfortunately, many misconceptions of how it works, who it works for, and when one might want to insure a piece of artwork. The good news is that insuring artwork operates in a similar fashion to insuring many other things in our lives: homes, cars, boats, etc. There is not a magical threshold one needs to meet before considering insuring artwork: if it is worth protecting, it is worth insuring. In this article, we are going to break down how art insurance works, some of the popular questions we at Deland Gibson Insurance often see, what the process of insuring art looks like. So, let’s dive in.
What are the benefits of Art Insurance?
Consumers purchase insurance to protect against the unknown, whether it applies to protecting cars against potential accidents, a beach home against hurricanes, and so on. Fine art is no different, and art insurance helps defend against the unforeseeable risks and helps protect that which is valuable to us by being prepared. Valuable artwork can be exposed to losses such as breakage, water damage, and theft, and without an appraisal, it can be difficult to prove its value. Importantly, insurance does not cover items retroactively after the damage has been done, therefore when it comes to your art it is important to appraise and protect it from the outset.
Will Homeowners Insurance Cover My Art Collection?
One of the most common questions we hear at Deland Gibson is “does homeowners insurance cover my art collection?” In short, no, not to the extent required. While homeowners insurance does protect valuables within the home there are deductibles, limits on coverage, and exclusions all to be aware of. The value of your fine art may quickly outstrip the amount of coverage required to cover your piece(s). A homeowners policy provides broad coverage, while a dedicated policy for your fine art will provide specific coverage designed precisely to address this need.
Why Purchase Fine Art Insurance?
As we have seen, relying on homeowners insurance to protect your art collection may leave your collection vulnerable in the case of an incident. But the reason for purchasing fine art insurance expands beyond simply covering the gap left by a homeowners policy.
- Many private fine art collectors view their collection as an investment. As investment vehicles, fine art can often occupy a significant portion of an individual’s portfolio. By obtaining the appropriate coverage for your full collection, you can better protect these assets.
- One of the many beauties of owning fine art is that each piece is unique and individual. Coverage therefore needs to be unique and specific to the piece(s) in the collection. By purchasing fine art insurance, a bespoke policy can be created that is tailored specifically to your collection.
How do I Insure my Artwork?
There are several different ways to insure your artwork. The best and most specific way to do so is on an “agreed value”, scheduled basis. Each item in your collection is insured for its agreed-upon amount. This “agreed value” amount will be paid to you in the event of a covered loss. Many insurance carriers also insure artwork with no deductible. To obtain this type of coverage, you will most likely be asked for an appraisal. It is important you keep your appraisals up to date, and we recommend obtaining new ones every 3-5 years.
Artwork may also be insured on a ‘blanket’ basis. This can be useful for a collection of smaller pieces. On a ‘blanket’ policy, the insurance company will usually cover a specific dollar amount for all of your artwork, with a maximum coverage amount for each piece of art. For example, you can buy a blanket fine arts policy with a limit of $100,000 with no more than $10,000 for each item. This can minimize the need for appraisals, but it is still important to review your collection periodically to make sure you are properly covered.
How Much Does Art Insurance Cost?
Insuring your art collection will not break the bank. While there are a number of different factors that may determine your actual cost, art insurance can cost as little as 15 to 20 cents per $100 of coverage. Pricing may depend on the type of coverage you buy (blanket vs scheduled) the total amount of coverage you buy, if your items require coverage for breakage, and the types of security system in your home. Please contact us if you want more specific details on pricing for your unique collection.
About Deland, Gibson Insurance
Connect with your D,G advisor for more information. Deland, Gibson Insurance, helps you organize and identify risk. We also are risk advisors and insurance managers. Deland, Gibson now has locations in Wellesley, Dennis Port, and Franklin, MA. D,G is also more sector-focused. With over $80,000,000 of written premiums, the agency looks to continue fulfilling our mission as a client advocate Providing Peace of Mind Through Proactive Service.
