“Art is a commodity, but it’s a commodity with multiple marketplaces,” says William Fleischer, a specialist in fine‑art insurance and valuation. “People assume an artwork has a single price, but in reality, its value depends entirely on the context in which you’re measuring it.”
According to Fleischer, the number most people recognize—what a buyer is willing to pay, and a seller is willing to accept—is only one of several legitimate valuations an artwork can carry. “A sale happens when those two numbers align,” he explains. “But that’s just the beginning.”

Appraisals: One Object, Many Purposes

Appraisals are not one-size-fits-all. They can be prepared for:

• charitable gifts
• tax deductions
• estate settlements
• fair market value assessments
• 
  “Each appraisal is tied to a specific purpose, and each relies on current market data and comparable sales,” Fleischer notes. “The same painting can have different appraised values depending on what the appraisal is being used for.”
  
• Auction Estimates: A Different Strategy
  Auction houses introduce another layer of pricing logic.
  “They set low estimates to entice consignors and stimulate bidding,” Fleischer says. “The hope is that competitive demand pushes the final price far higher. It’s a strategy, not a reflection of intrinsic worth.”
• 
  Insurance: Valuing Art at the Moment of Loss
  Insurance valuation is its own universe. “The bottom line with art insurance is deciding how you want the piece valued if it’s lost or damaged,” Fleischer explains. Policies typically use one of two structures:
• Agreed Value:
  “The insurer accepts a set value based on appraisals or market expertise. Everyone knows the number upfront.”
• Onus of Proof:
  “You establish the value at the time of loss using purchase price, current market value, or a fresh appraisal—whichever is higher. The advantage is that if the artwork appreciates, you’re compensated for that increased value.”
• 
  When No One Is Selling: The Scarcity Problem
  A particularly thorny issue arises when no comparable works are on the market.
  “This happens when a collector needs a specific piece to complete a series or replace something rare,” Fleischer says. “In those cases, appraisers often increase the insurance value by 20–40 percent to reflect scarcity and the difficulty of replacement. Without active sales, it’s harder to know what a willing buyer and seller would agree on today.”
• 
  The Takeaway
  “There isn’t one ‘true’ value for a piece of art,” Fleischer concludes. “There are multiple values, each valid within its own context. The real question is not ‘What is this worth?’ but ‘What is this worth for the purpose at hand?’”