Whether you have art as an investment, to simply enjoy, or both; you will want to confirm that you are insuring your artwork correctly. If you put investment into something, you will want to protect that investment as much as possible and your artwork should be no different.
Insuring your artwork can be a bit confusing at times. If you ask 10 different people about how they insure their artwork, you will most likely get a few different answers. The hopes with this article are that we can help you properly insure your artwork and put any concerns you have about insuring your investment to rest.
Is My Art Covered Under My Home Insurance?
Every company has different rules, limits, and coverages. For this reason, it’s hard for us to say what would be covered and not be covered without seeing your policy wordings.
In most cases there will be some sort of coverage on your home insurance policy for your art. The problem will be how much your insurance company is willing to pay per piece of art and there will usually be a small limit on the total amount they will be willing to pay for art. The limit for art pieces is usually between $2,000 and $6,000 if they have deemed your art qualifies as the term art can be broadly stretched or interpreted differently.
If your art has any coverage under your home policy it would often be on an Actual Cash Value (ACV) form, which means the payout could be reduced by depreciation. There will most likely be exclusions for breakage, restoration, covering art in transit, and possibly theft.
Is My Contents Coverage Under My Home Insurance Enough?
If you have artwork that is of a higher value, a collection that has accumulated a higher total value, or artwork of any rarity, then it would be suggested to insure your artwork either on a floater/endorsement or on a completely separate policy.
Concerns With Insuring Artwork on a Home Insurance Policy:
- Exclusions – As we have often stated, every insurance company has different exclusions. On a homeowner’s insurance policy, you can expect to see quite a few exclusions for your artwork. You will see many exclusions including:
- Items in transit
- Breakage, scratching, or restoration
- Items off premises
- Value – The majority of people will undervalue their collection of art. This could cause issues if your value of art goes over the limit the insurance company would be willing to pay.
- Lack of a Catalogue – When you insure art on a separate policy or even with an endorsement on your home insurance, you will most likely need to provide a list of the artwork and their appraisals. If your artwork is only under your contents coverage, you may find yourself trying to prove what artwork was actually there and it’s real value.
- The Definition of Art – When you are relying on your homeowner’s insurance coverage, you may have a different opinion of what is art than the insurance company itself. A separate art policy would have a broader range of what is considered art and have the specific art pieces listed with a dollar value attached.
- Limits Per Artwork – As mentioned above, there will most likely be special limits set in your homeowner’s insurance policy that limit the amount the insurance company would pay per piece of artwork. This value has nothing to do with the artwork itself and is already set in the policy wordings.
Is a Home Insurance Fine Arts Endorsement Enough?
The answer to this question will again be different for every single collector of art. If you have a smaller collection with a few pieces of value, a Fine Arts Endorsement might be exactly what you are looking for. It may not have the same benefits of a separate policy, but it would be considered your “middle of the road” coverage as it is somewhere between relying on your home insurance contents coverage and a completely separate policy for your artwork.
Some of the benefits of a Fine Arts Endorsement:
- Higher Limits per Piece of Art – There will be much higher limits per piece of artwork available.
- Optional Breakage Coverage – A lot of insurance companies will give you the option of insuring your artwork with breakage or without breakage coverage. This choice can drastically cut the cost of insuring your artwork if you don’t need breakage coverage.
- Small or No Deductibles – The majority of Fine Art Endorsements will have no deductibles for items that are scheduled (listed on the endorsement) or they will have lower deductible options.
- Better Coverage – The endorsement/floater will cover more perils than your contents coverage for art.
- Appraisals – Depending on the insurance company, appraisals may be required for items over a certain value. This can seem like a con rather than a pro but having your pieces of art appraised and listed on your insurance with the proper value is very important if you ever need to make a claim.
- Blanket Coverage – Some insurance companies will offer a blanket coverage on your art. This will allow a whole collection to be covered with a per-item maximum and a total collection maximum. This will allow you to insure your art without listing every piece on the policy. If you are frequently changing art pieces, this could be a coverage option that would interest you.
Separate Art Policy
If you have pieces of art that are of a higher value or rarity, it would be suggested to insure those on a separate art policy. A specialized art policy will give you greater coverage options and a broader definition of what is considered art.
If you treat your art collection as an investment, a separate art policy would most likely be the option you should be looking at. Getting a broker who understands the art world and how to insure your art is going to be very important.
Separate Art Policies Tend to Offer:
- Higher Limits
- Loss Settlement Options
- Agreed Value (appraisal or bill of sale)
- Current Market Value
- Better Claim Handling
- Broader Definition of “Art”
- Coverage for Consignment and Commissions
- Broader Coverage – coverage for things such as theft, items on display, items stored, or items in transit.
- Different Types of Coverage
- Scheduled – Itemized pieces of artwork.
- Blanket – Coverage for the whole collection with per item and per collection limits
- Combination – Schedule some of your pieces and have the rest covered by a blanket coverage.
Should I Catalogue My Art?
Yes. It doesn’t matter if you are insuring your art on your home insurance contents, a floater/endorsement, or on a separate policy; you should be cataloguing your art collection.
Details to Catalogue:
- Title and Artist
- Description of the piece
- Condition of the artwork
- Date of purchase
- Certificates, appraisals, or any paperwork you have available about the artwork (provenance)
Even if your insurance company does not require this level of detail to be kept, it would be highly suggested that you do so anyways. Try to keep this information as safe as possible. As an option, possibly in a fire and waterproof safe or at a different location.
As you can see there are a lot of options when it comes to insuring your artwork. It is always best to discuss your options with a highly skilled insurance broker who is an expert in the field. The insurance broker will be able to listen to your concerns and what items you must insure. They will then give you your options for the coverage and policy that would best fit your needs.
If you need an insurance broker who can help you insure your art collection, please reach out to us so we can help you protect your investment.