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How do I obtain fine art insurance to protect my collection?

Pensive art dealer with paintings in art gallery

For many prosperous families, fine art collections become personal and cultural touchstones, a reflection of the taste, intellect and foresight of the collector. On the grandest of scales, some collections become treasures for us all.

The Guggenheim family collection is a great example of such a collection that made the transition from private passion to public museum. Solomon R. Guggenheim’s and Peggy Guggenheim’s bequest actually became museums in New York and Venice. Solomon R. Guggenheim’s enlisted Frank Lloyd Wright to design the monumental Guggenheim Museum in New York—a work of art full of works of art.

So, owning art often goes in tandem with achieving financial success, and collectors with foresight may amass important collections with smaller initial investments. Whatever its size, if you are thinking about protecting your collection, you are smart to do so. Nearly all private and museum collections are covered by fine art insurance, and many of the most iconic collections are protected via insurance arranged by our firm.

How would we advise you about coverage for your collection? No surprise, but we’d recommend that you work with an insurance advisor with expertise in fine art who secures appropriate, specialized coverage. And you should expect for that advisor to advocate for you regarding price and coverage and in the event of a claim.

To begin the process, let’s ask a few questions.

Do you want to protect your fine art investment?

Some people are so wealthy that they’ll  replace lost art themselves without emotional or financial trauma. Deciding the importance, both emotional and financial, of maintaining your investment is the first step to determining how best to protect your collection. Ask yourself, In the event of fire, theft or water damage, what insurance protection should I have?

Is your fine art insured right now, and how is it insured?

Is your collection “insured to value,” meaning that the level of coverage approximates the combined replacement value of each piece in the collection? This is especially important if there is a catastrophic loss.

Also, the “how” of your insurance is as important as the “how much.” There are generally two options for insuring fine art. The first is on a “blanket” basis, which is often the best solution for large collections. It offers flexibility contractually supported within the limit purchased. Any piece has coverage to the purchased limit, if determined to be fair market value (FMV) at the time of a covered claim. Fluctuations in value may be protected by your policy. For example, you purchase a painting for $20,000 from an “emerging artist” and suddenly her work starts auctioning in the millions.

The second option for structuring a fine art insurance policy is “scheduled,” which typically gives you the stated value of the piece at the time of a claim and doesn’t offer coverage for items not specifically listed.

What are your most valuable pieces?

By valuable we mean from both a financial and emotional standpoint. It might be your very first piece…or your seven-figure Warhol. Think of it this way: If your house caught fire, which pieces would you rescue first?

Our approach, even if you have hundreds of works, would be to ask you to name your most valuable pieces. This would help you think about a limit to most appropriately cover the collection.

Few among us can turn the raw materials of art into masterpieces. But we can collect fine art, and if you do, to preserve and protect your collection, make sure you work with knowledgeable advisors. This will help ensure that you preserve your collection for future generations, whether for your family or for us all.

All descriptions, summaries, or highlights of coverage are for general informational purposes only and do not amend, alter or modify the actual terms or conditions of any insurance policy. Coverage is governed only by the terms and conditions of the relevant policy.

Risk & Insurance

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