Volume 25 begins the third year of our newsletters. We appreciate all the positive comments we have received from our readers and look forward to bringing you interesting stories from the Art Market over the next 12 months.
With the New Year upon us, we wish you all a very happy, peaceful and successful 2003! Now ... on to the show!
To Insure, or Not to Insure? That is the question!
We purchase a majority of our works directly from their owners and it is interesting to note that many of them tell us that their works are not insured … I am sure that you are now wondering … how can that be?
Keep in mind that many people have inherited works of art and just do not know their value. It is only when they decide to sell that they learn the ‘old’ painting their grandmother left them is worth a considerable sum of money. By this time there may be no need to insure the work, as the buyer will usually cover the risk while in transit.
However, for the rest of you, here are our thoughts and tips on the issue of insurance.
First - It is a good thing to have ... and no, we do not have a member of the family in the business. If you own artwork, it is advisable that you insure them -- as we all know, accidents will happen (I will give you a good example later).
Second - Unless the works of art were recently purchased and you have a bill of sale, you will need to have documentation reflecting the work’s current market value. This could be in the form of an appraisal, a letter, or updated bill of sale from the gallery you purchased it from showing the ‘current market value’.
Third – If you need an appraisal, please be sure to have it done by an expert in the field. If you are insuring a 19th century European painting, don’t have the appraisal done by someone who specializes in Contemporary art. You need to make sure that the appraiser has in-depth knowledge of the artist and their work, to assure that they will arrive at the correct value.
Fourth – Keep an eye on the market and update your values when needed – usually every 3 – 5 years. While prices, in many parts of the ‘art market’, move in a steady progression, there are times when the price for a particular artist’s work will make a big jump. When you see this happen, make sure you adjust your insurance values.
Fifth – The easiest way to insure your works is to schedule them on your Homeowner’s Policy – this will allow you to list each work separately with a specific value. For those of you with collections of significant value, you may want to consider a ‘Personal Articles Floater’. This is a stand-alone policy and can be purchased for art collections, book collections, furniture collections, etc. Call your insurance company or broker and find out what is right for you.
Sixth – Many of you are now thinking that this is going to be very costly, but that is not the case. The range of cost to insure works of art on your Homeowner’s Policy is between 5 – 40 cents per $100 of value. I know this is a wide range, but there are many factors that are taken into account when determining a rate … size and value of the entire collection, location, security, etc. From my research I have determined that a collection valued at $1,000,000 should cost approximately $1,000-$1,200 per year to insure … of course this rate will vary depending on where you are located and the type of structure the works are housed in (brick, wood, etc.). As a comparison, the cost to insure jewelry on a Homeowner’s Policy is $1 - $2 per $100 of value … so $1,000,000 of jewelry will cost about $10,000 to insure (at the low end of the range) … in New York, the rate is closer to the $2 per $100 range.
Seventh – It is important that your broker stays on top of the insurance market … there are times when the rates to insure works of art drop and you want to take advantage of this when it happens.
Eighth – Understand the type of insurance you are purchasing and know its limitations. Are your works covered regardless of what happens to them? Are they covered in transit? At outside locations? Etc.
Over the years we have seen many works of art that were damaged due to accidents – broken steam pipes (causing large areas of the paint to come loose from the canvas); ladders that put holes in a painting and works that have fallen off walls. While most of these damages can be repaired, if the works are properly insured, not only will your insurance company take care of the restoration cost, but in certain instances they will pay you for any loss in value that may have occurred. Here is a case in point:
Many years ago a couple had acquired a work of art from us that was in pristine condition. They decided to have the room in which the painting hung repainted so they placed it on a picture hook in a different room. As you can probably guess, there hook was not strong enough and the work fell off the wall … causing a number of tears that measured almost 72 inches in total. While devastated by the accident, the owners had properly insured their collection and in the end, after the work was restored, the insurance company agreed that the work’s value had been severely diminished -- they offered the collectors two options. The first was to take a total loss on the painting, collect the total insured value, and surrender the work to the insurance company. The second was to take a partial loss and keep the work … since this was one of their favorite paintings; they opted for the second choice and took a ‘slightly’ lower amount.
One final thought … whatever you decide to do; it is advisable to have good quality photos of your valuable possessions and complete descriptions stored in a safe place (preferably away from the home). Should there ever be an accident or theft these photos will be of great value to you, the insurance company and possibly numerous law enforcement agencies.
On a Similar Note
I was recently e-mailed a copy of an article that Nikki Ballard, contributing news editor for AuctionBytes NewsFlash, wrote entitled: Survey Reveals Lack of Knowledge About Collectibles Insurance. The article discussed a recent Chubb Insurance’s survey of 8000 attendees at the PBS’s Antiques Roadshow. Mary Ann Avnet, a vice-president of Chubb & Son and marketing manager for Chubb Personal Insurance, commented that “Last year’s survey of Roadshow attendees in six cities showed that many people do not know the limitations of their coverage. They are not aware that their insurance policy may pay to replace an antique with a new version of the same item. For example, if an antique rocking chair worth thousands of dollars is lost or damaged, it may be replaced with a new replica antique rocker worth a fraction of the cost of the antique. Furthermore, if they lose a piece of jewelry or accidentally break a rare glass vase, they may find that their policy does not cover mysterious disappearance or accidental breakage claims”.
Avnet advises owners of valuable possessions to ask their insurance agents to explain the full scope of their coverage. “Just calling your agent and asking if the item is covered under the policy is not going far enough,” she said. “You need to ask whether there are limitations and on what basis a claim will be paid”.
Please take a few minutes to review your policy and make sure that you are ‘fully’ covered in the event of a loss or accident. A few minutes today, may save many hours of aggravation in the future!
Gallery Updates: The gallery has acquired new works by Édouard Cortès, Antoine Blanchard, Louis Aston Knight, Heidi Coutu and Sally Swatland – some of which have been added to our site.
Virtual Exhibitions: This month we have added one work to – Rehs Galleries: A Visual History … Alexander Mark Rossi’s Forbidden Books. This work was painted 1897 and was exhibited at the Royal Academy that year. Rehs Galleries sold this important Victorian genre painting in 1988. The direct URL to this image is:
Since our last newsletter we have sold a number of wonderful paintings – many of which have been moved to their respective Virtual Exhibitions. Among them were Daniel Ridgway Knight’s Meditation; Julien Dupré’s Paysage avec Animaux; Louis Aston Knight’s Garden & Meadow, Normandy, Risle Valley; Henry Victor Lesur’s Sunday in the Park; Sally Swatland’s Windy Day, Cape Cod; Reflections; Summer Bonnet; The Snail Collection; Antoine Blanchard’s Porte St. Denis; Gare de l’Est and Les Grands Boulevards, Porte St. Martin & Porte St. Denis; and Cortès’ Place de l’Opera.
Next Month: Continuing on my “How to Care for Your Works of Art” series I will discuss – Theft!