Looking to Buy the Next Basquiat or Canaletto?
NEW YORK, December 11, 2008 – Regardless of whether you are purchasing your first piece of art or adding to an existing collection, proper insurance is essential in order to financially protect your investment, according to the Insurance Information Institute (I.I.I.)
“With art prices dropping, you may decide that now is the time to purchase a piece, or start collecting an artist you have been admiring for years. It may be a work of modern art purchased at Art Basel in Miami or a traditional painting from your local gallery, but the important thing is to contact your agent, broker or company representative immediately to let them know about your new purchase,” said Jeanne M. Salvatore, senior vice president, Public Affairs, and consumer spokesperson for the I.I.I.
To substantiate the dollar value of the purchase, your agent or company will need a copy of your recent bill of sale or an appraisal form.
As an art buyer, you should find out if your homeowners or renters insurance company has the appropriate policy to protect your artwork. If not, look for an insurance company that provides specialized fine art policies. You may also want to look into homeowners insurance companies that specialize in high-net-worth individuals. You can get the names of these types of insurers from a local independent agent.
Like jewelry and other expensive items, there are dollar limits on insurance coverage for art in standard home and renters insurance policies. “In most cases, you will need to purchase a fine art floater,” pointed out Salvatore. Floaters generally provide broader coverage, such as coverage for items that are taken home on a temporary basis (to make sure the collector likes how it looks in his or her home), but not yet purchased. Floaters also do not usually have deductibles.
“Some insurance companies may have experts on staff who will not only help you properly insure your investment, but can provide assistance with how to protect your collection from theft or other risks such as damage from water, smoke and fire, and changes in atmospheric conditions, as well as how to properly pack your art if you are lending it to a museum,” said Salvatore.
Cost of coverage will vary depending on the type of art, where it will be displayed or stored, whether you plan to lend it out and geographic location. Locations at high risk for hurricanes or wildfires, for instance, may result in the coverage being more costly.
As with all expensive purchases, it is important to keep records and add the item to your home inventory. A copy of the bill of sale, appraisal, provenance (history of past ownership) and photographs are all useful records of your art and should be included in the inventory. To make this process easier, the I.I.I. offers free home inventory software, available at KnowYourStuff.org.
About Insurance Information Institute
For more information about insurance, go to the Insurance Information Institute Web site: http://www.iii.org.
The I.I.I. is a nonprofit, communications organization supported by the property/casualty insurance industry.