I work with many Art Insurance Carriers, and each company’s approach to valuation differs, which is why it matters.
Normally, there are three ways to evaluate art at the time of claim.
The first is true with almost all art insurers. It’s the sold price, hammer price, and the cost to take the art away. This can or may not be in the final receipt, which could include extra fees, cost of crating, documentation, storage, cleaning, etc.
The Second Valuation has some twists and turns. The cost of the Artwork you own is evaluated at:
- Your purchase price plus 20% or Retail sales less than 30%, whichever is greater.
- Your purchase price plus 30% or Retail sales less than 20%, whichever is less.
- Your purchase price plus 30 % or Retail sales less 20%, whichever is greater.
- Your purchase price plus 30 % or Retail sales less 20%, whichever is less.
The third Valuation is key for all Art Dealers and Art Galleries—consignment valuation. The Art insurance dealer policy’s usual definition of Evaluation of a consigned work is net consignment + 10% of the retail price. I have seen a new consignment amount plus 20%. It’s a little richer if something happens.
In Conclusion, the differences may or may not affect the price, but knowing how insurance is settled is essential.
Please visit my website to complete the Art Dealer / Gallery insurance application.