Art Insurance for Collectors; Schedule vs. Blanket

The Art of Collecting Art.

There’s a big difference between buying art and collecting art. Buying art is more of a random activity based on likes, preferences or attractions at any given moment while collecting art is more of a purposeful, directed, long-term commitment. An important step in good collecting is not the most delightful one to talk about, but it is among the most necessary, and that is to plan for the unforeseen.

As an art insurance broker, I readily come across collections that are an intricate part of retirement and inheritance planning.  It’s a great asset to pass down.  Baby boomers bought artwork for the love of the art.  Art as an investment vehicle was a small part of the decision-making, not like today which is the main focus.

In the past 15 years as the art market sales and demand took off, Art purchased 40, 30 or even 10 years ago is worth a lot.  Hence, I am seeing collector’s policy limits rise into the millions. I will explain some key differences in the type of policy offered in today’s marketplace. Art Insurance and collectible insurance demands are a new focus with some insurers. Beware, like the art world, no two are the same, read the exclusions, conditions and valuation clauses in a policy.

Understand what schedule means and its limitations, some say the maximum they will pay is what is on the schedule or schedule plus 125% or 150% and then some added or market value whichever is less.  A popular coverage is Blanket Insurance; usually, this is for the collection under $300,000. The advantage is that you are not required to supply the companies with appraisals, bill of sale or any other documentation when you bind the coverage.

Only at the time of loss, the onus of proof of value is on the collector.  This is not a lengthy process; either go back to your paperwork and ask for a current valuation from a dealer or show your work to a dealer and put the value in a letter. Both methods of either scheduling the art or using the blanket limit are tools I use when working with my clients.  Each person looks at insurance in different ways and has different requirements. Let me work with you and answer all your questions to present a program which is satisfactory to all those involved.

Visit us at ArtInsuranceNow.com, Apply below or Contact me at 800.921.1008 to discuss your unique situation.

William G. Fleischer CIC

 

 

Tate to Exhibit Ultimate David Hockney Retrospective

We at ArtInsuranceNow.com are excited that Tate Britain is staging the most extensive retrospective of David Hockney’s work to date in February 2017. As his 80th birthday approaches, over six decades of Hockney’s work will be shown at the U.K. institution including painting and drawing, as well as prints, photography and videos.
From his first one-man show when he was 26 in 1963 he most recently exhibited at the National Gallery of Victoria, Melbourne Australia (DAVID HOCKNEY: CURRENT). He is credited as being one of the most influential living artists.
Tate Britain’s director Alex Farquharson has said: “David Hockney is without doubt one of Britain’s greatest living artists. His impact on post-war art, and culture more generally, is inestimable, and this is a fantastic opportunity to see the full trajectory of his career to date.”
Hockney is also quite the armchair philosopher and a search of the internet will find many quips and quotes, A book on art conservation which cites an AXA Art Insurance funded research laboratory quotes him as saying “Love will decide what is kept, and science will decide how it is kept”.
AXA Art Insurance is one of our many affiliate partners in bringing you the most comprehensive Art Insurance coverages available; to learn more visit us at www.ArtInsuranceNow.com, fill out an application to receive a fast free quote or call 1.800.921.1008 to protect your art and collectibles. Don’t miss David Hockney, on show at Tate Britain from February 9 until Monday May 29 2017 followed by showings in Paris and New York City.

Travelers Insurance, AXA Art, Markel ART, Chubb Ar,t XL Art, Philadelphia Art, Great American Art, Ironsure Art, USAA Art

 

As Art Basel Miami 2016 approaches, we look at the necessity of a good art insurance policy

artbasel-miami-beachArt Basel, the international art fair with three shows staged annually in Basel, Miami Beach and Hong Kong. The shows offer parallel programming produced in collaboration with the host city’s local institutions. Art Basel provides a platform for galleries to show and sell their work to collectors, museum directors and curators. The 2015 show in Miami presented 267 leading international galleries from 32 countries. Over five days the show attracted 77,000 visitors including private collectors and directors, curators, trustees and patrons of nearly 200 museum and institution groups. The show hosted first-time collectors from Cambodia, Ethiopia, Nicaragua, Romania, Togo and Zimbabwe. That’s a lot of art moving around and collectors Art policies should cover Art, when purchased, on consignment and in transit, it’s about knowing your coverage situation before it’s too late.

art-basel-miamiThe transportation of art is a tricky thing, and as fine art transportation insurance leaders we can tell you exactly what you require to know so that your insurance program will be effective and  cover you properly.  Insurance coverage during transportation, installation and exhibition of irreplaceable works of art, antiquities, and memorabilia isn’t optional and the best way to obtain the finest coverage is to visit artinsurancenow.com or call us at 800.921.1008 to speak with a knowledgeable fine art broker that can advocate for you in seeking the best possible insurance terms.

Art_Signature

 

5 Things Every Collector Needs to Know about Art Insurance

anFor many of us, amassing a robust collection of works by the artists we love is more a dream than a reality (though startups like Art Money are working to provide interest-free loans that should make buying art more manageable). But for emerging collectors and seasoned vets alike, the actual purchase of a piece is only the beginning of what it means to actually own art. Though not flashy, art insurance is a crucial part of collecting. It ensures that, should an artwork be damaged, it can be repaired or, in the case of a total loss, some kind of remuneration can be provided. So what do you need to know about art insurance? We sat down with Robert Pittinger, senior vice president and director of underwriting at AXA Art Americas Corporation, to get some helpful tips.

Know the Process

When a collector buys specialty art insurance, they’ll work directly with a broker who can assess the collection and determine what policy the collector might need. That broker, in turn, works directly with the insurance companies to find the right fit. A common misunderstanding of the process, Pittinger says, is that “collectors confuse the broker with the insurance company.” It’s helpful to know that “the role of the broker and the art insurer complement one another; however, the roles themselves vary and they are different. A specialized fine art broker is an advocate for the collector in seeking the best possible insurance terms for their clients.” As an insurer, AXA itself works with a select group of fine art brokers.

Keep Documentation

The first step toward getting insurance is—unsurprisingly—to determine what is going to be insured and for how much. To this end, documentation is key. “One of the biggest things is that the collector needs to have all the documentation for their collection before they go to the broker, because the broker has to have a very thorough understanding of the price of the collection,” Pittinger says. When approaching a broker, collectors should have a list of all the works, descriptions, invoices of sale prices, the purchase dates, and subsequent appraisal prices.“The collector’s management of their collection is critical, whether they have an online management system or a spreadsheet or they have manuals with all the documentation and their appraisals—that is a critical part of purchasing the insurance,” Pittinger says.

Assess Your Needs and Options

All this information is important to provide to the broker so they can determine what insurance is best for you. Though most collectors who need insurance already have it, some collectors think they’re covered by everyday, run-of-the-mill homeowners insurance. And they can be. But, as Pittinger notes, “A homeowner package policy generally is an add-on coverage. It doesn’t go into detail.” Homeowners insurance that covers art might have high deductibles, might not cover a collection across multiple houses, or might not cover the work during transit. That last one is a particularly sticky issue because “any time a collector moves their art, there is increased risk of damage,” Pittinger says. “That is the number one cause of loss for the insurance industry that specializes in art insurance.”

All this is why, for collections larger than just a few items, Pittinger recommends specialty art insurance. Even lower-priced works and emerging collections can receive insurance: For pieces priced as low as $2,500, AXA offers a 12-month policy of $75, with a minimum premium. Generally, however, it is hard to say exactly how much art insurance costs—it depends on too many factors. “Art insurance is very reasonably priced compared to other types of insurance,” Pittinger says. “The price range varies depending on the type of works, the size of the collection, security, where it is kept, if it is in a fine art storage warehouse or in their home or in a museum—all those factors go into pricing a fine art collection.”

Stay Up to Date and Be Careful

Broadly, in the event of damage, an insurance policy pays out in one of two ways: Either the policy will pay a set, agreed-upon amount determined by the insurer and the collector in advance, or the policy will pay out based on the work’s current market value. Pittinger says collectors opting for the predetermined payout structure may do so for a number of reasons, including peace of mind so that they “wouldn’t have to worry about substantiating the value of the works” in the case of damage. Agreed value can also move up and down over the life of a policy if the collector decides to get the work reassessed.

Current market value is exactly what it sounds like: The work is insured for its current value if that figure exceeds an agreed value. “But the important thing to remember is there would be a restriction—the company would by no means pay more than the total limit of the policy,” says Pittinger. In other words, if a collection is insured for $10 million total, and one work that has radically increased in value is damaged in excess of $10 million, the insurance would still not pay more than the total cap.

Be a Smart Buyer

One final note: Do your research. Make sure you get a full condition report prior to purchase. “It’s also critical that the collectors be careful with the provenance of the piece to make sure there’s not a gap in the ownership that could come back to haunt them later,” Pittinger says. If there is an issue and the work is seized for, say, having been looted by Nazis, insurance typically won’t cover that turn of events (there are, however, some specialty insurers that would protect against such loss with what is known as title insurance). So when it comes to art insurance, the old adage “buyer beware” certainly still applies.

—Isaac Kaplan

BY ISAAC KAPLAN

 

 

For a quote apply here or call us at 800.921.1008

Employee damages Art, is it Covered?

In December 2015, a security guard damage, defacing and destroying paintings and sculptures of artwork, in the Wexner Center for the arts, Ohio State University, before killing himself. Does AXA Museum policy cover such losses? Yes.

The AXA Museum form does not exclude for damage by an employee or the public.

AXA Museum policy covers Art owned by the Museum, property on loan or offered for sale to the Museum. The coverage extends to frames, crates, cases and packing material.

The main focus will be the loss settlement. After, restorers and appraisers evaluate the work to determine the Current Market Value of any work determined:

 A Total Losses, the company we will pay “current market value” of the property at the time “loss” or damage occurs. The “loss” or damage shall be ascertained or estimated according to such current market.

For the Partial Losses, The company will pay the Museum an amount mutually agreed upon based on the following:

(a) The cost to repair the property to its value immediately before the “loss”; or
(b) The difference between the value of the property before and after the “loss”; or
(c) The cost to restore the property as nearly as possible to its condition immediately before the “loss”. If the restored value is less than the value immediately before the “loss”, we will pay the difference between the restored value and the value immediately before the “loss”.
Having the right policy in place with the right coverages helped Ohio State University with the money to rebuild and or restore their amazing collections.

Insurance is to indemnify and restore the Insured to the situation prior to a loss. Sadly, Art is one of those objects which are very difficult to return to its original grandeur.   Nothing last forever, but one would hope, through proper insuring a collection, it could be rebuilt with similar works or genres.

William G. Fleischer | Principal
T: 212 566-1881 ext.111
E: wfleischer@bfbond.com
W: ArtInsuranceNow.com
Art_Signature