How Does Artwork Insurance Work?

There’s value in building up an art collection, from appreciation of the technique to the historical perspective to its worth. Yet, as art is essentially an investment, it’s best to protect what you’re amassing with an insurance policy.
The principles that apply to insuring any valuable apply to artwork, too: Your standard homeowners policy offers some coverage up to a certain dollar amount in instances of loss or damage. For many avid collectors, however, the total tends to be too low, so it becomes necessary to amend your homeowners insurance policy with a fine art floater. Here’s how it works:

  1. Get an Appraisal

Because floaters, or individual policies, cover more in a greater range of situations, you must determine your collection’s worth. In doing so, you’ll know how much you’ll need to purchase now and what you can reduce later.
Appraisals, however, determine how much coverage you’ll need for the present. But, with an art collection, values may change frequently, based upon the era in which the artist created the piece and whether or not the artist passed away. For the latter, the value is said to increase as much as 200 percent as a result.

  1. Show Proof

While an appraisal assigns a value to each piece and gives a dollar amount to your full collection, any insurance company specializing in fine art wants a bit more proof. What will you need?

  • Each piece needs a copy of the bill of sale, a provenance, and photographs.
  • Documentation showing how the appraisal was done.
  1. Automatic Coverage

Do you regularly purchase art? If you fall within this group, consider a policy with automatic coverage, which protects anything you purchase. However, to make sure the insurance company remains up to date about how much they need to cover, update your representative within 60 days of buying a new work.

  1. Renewal

After you’ve taken out a fine art floater, make sure your coverage continues to reflect your collection’s value. It’s best to assess your collection each year for its changing amount, and to then have your agent adjust your policy in response.
Along with the factors above, certain art insurance policies may take into account how you protect your collection. If you’ve added a security system to your home, this aspect could be factored in for discounts in your rates.
When you find your homeowners insurance doesn’t offer enough coverage, don’t take your chances, and instead, add a floater to your existing policy. To learn more, give Ion Insurance a call today at 203.439.2815.