When a person buys an asset such as property they take out an insurance policy to safeguard their investment against unforeseen circumstances. Surprisingly few art collectors bother to insure their artworks when today art is one of the prime alternative investments.Insurance companies are of the view that only 15% of the art insurance market has been tapped. Which means that only 15% of art-works are insured.
The right kind of policy
Its imperative that are collectors insure their art-works. Today there are insurance companies offering specialist art insurance products. They is property/casualty policy cover which covers theft and many kinds of damages, but excludes losses due to war, nuclear disaster, wear and tear or vermin damage. There is title insurance that protect against claims to an art-work one would have bought. Title insurance offers protection during disputes and claims that normally arises during the winding up of an estate.
Appraisal First
In order to get ones art-work insured one must get their art-works appraised, its important for one to photograph the art-works and to keep purchase receipts. Some investors view that insuring art-works will cause a lot of documentation that will result in them paying mores taxes on their income, but that’s an old school way of thinking.
The hidden advantage of insuring ones art-works is that one creates a paper trail which helps to add values to the art-work. With each new documentation the values of the art-works appreciates.Take an example of a person who hasn’t got a birth certificate, that person as much as they are alive today, officially they doesn’t exist. They cannot benefit from social services and their personal value will continue to depreciate in their life-time.While a person whose life is well documented sees their personal worth rise.Another example is property, if one property is insured they can easily use their property as collateral for a loan.The same applies with art, as an asset one can use art as collateral but only when it has been insured. At the end of the day the benefits of insuring art and building a paper trail for out weighs the benefits of avoiding paying taxes in the long-run.By insuring art-works it safe guards one investments and helps indirectly to build up an history of the art-piece. As explained earlier in the article documented history adds value to a person worth the same concept applies to art.
Preston
January 29, 2012
That is all well and good but it is next to impossible for an individual artist to find insurance for his own artwork. Appraisals don’t work unless you have a long track record of sales. The artist is basically left to fend for themselves and hope for the best, while they promote their work. Even though I have some history of sales, I still find it impossible to get insurance for any work that I put into an exhibition. The gallery does not always carry insurance and if one is shipping one, valuation again is an issue.
http://www.prestonc.biz
Matt Drewry
February 12, 2012
Preston: Have you tried using a specialist art insurance broker? There are a number of good ones in CA. They will work with one of the specialist art underwriters who offer bespoke policies that are tailored for your needs. In your case you need a policy that works on a declared value, as long as it is reasonable, and you can articulate why, the underwriter will often accept it and set a premiumk rate accordingly.
Michael Kanyuchi
January 29, 2012
The art industry is changing some insurance companies are have not yet jumped onto the art bandwagon.its best to shop around and find an insurance that appreciates and understand the dynamics of the art industry.one must also understand that many players in insurance and financial where got off-guard with the sudden rise of art as an alternative investment as this was a closely guarded secret known by a few wealthy investors and private bankers.with popularity of art as an investment insurance and financial institutions who have been over-taken event will soon come with special products that will cater the art market.my suggestion is shop around and you will find an insurance company that can cater for your needs.the art industry is breaking new ground
Anthony Smith
January 30, 2012
I must say that my experience is completely the opposite.
I would estimate that ALL my clients have their artworks individually specified in their insurance policies.
Certainly, I do advise my clients to insure their artworks and have photographs of BOTH front and back of any painting and multiple images of any sculpture.
http://www.asart.com