Fine art and other collectibles are valuable, but they’re not always covered by insurance. In some cases, a standard homeowner’s policy may cover stolen or damaged artworks, but others may require you to purchase an add-on or floater policy to ensure expensive items are covered.
If you filed an art loss insurance claim but the insurance company denied or undervalued your claim, you may need to consult with a lawyer. A lawyer can help ensure the insurance company lives up to the details of your policy and covers your loss for art you may never fully restore.
Is Art Loss Covered By Your Insurance Policy?
Property insurance, including insurance plans for homeowners and business owners, provides financial protection against property loss due to theft, disasters, or accidents. While this includes several types of coverage, most plans include coverage for your personal belongings, including art and other collectibles.
However, there is a catch. There may be a dollar limit on payouts if your art or collectibles are stolen or damaged.
Before you can rest assured that your art and collectibles will be covered for their fair market values, you may need to do two things:
- buy a special personal property endorsement or floater
- get the item appraised and insure it for its fair value
Special Coverage For Art And Other Collectibles
If your works of art are worth a good amount of money, then you may need to consider a floater. High-valued pieces of art can be worth a lot and could be susceptible to theft. On average, the standard homeowner’s insurance policy caps the limit of liability for theft at about $1,500, which is the maximum amount an insurer will pay on any piece of art, regardless of its value.
To increase your coverage on valuable works of art, you could:
- Raise the limit of liability in your policy: Although this is the less expensive option, keep in mind that the maximum payout will still be limited, especially if you have more than one piece of art you’d like to protect.
- Buy a floater policy and add valuable items: Although this is an expensive option, it may offer the best protection for your art. Floater policies cover any type of loss, including accidents where you’re at fault, like dropping the piece on the floor.
However, before you purchase a floater policy, you must get the artwork appraised or valued by a qualified professional.
Get An Official Appraisal
Getting an official appraisal for your artwork or art collection is necessary for determining its value, especially in a legal sense. The best way for a professional to determine the value of a piece of art is by providing documentation of sale.
However, documenting sale of an artwork is not always possible, especially for an artist who may have a collection of pieces they haven’t sold yet. A professional appraisal could find a balance between how the artist or art collector values the work and its fair market value.
To determine fair market value, an appraiser will look at comparable works of art to see how much they regularly sell for at art galleries, art shows, or through an agent or seller.
Examples Of Insured Art Or Collectibles
Art or collectibles could encompass a wide range of items.
You may want to insure any of the following valuable items:
- sculptures or figurines
- photography collections
- coin collections
- stamp collections
- metal work
- other valuable collector’s items
What’s Covered Under Art Loss Insurance
Depending on your plan and whether you have special coverage, art loss insurance covers the usual perils that require an insurance policy.
Art loss insurance may cover:
- theft: If your art or other collectibles were stolen, you should receive a payout for your loss.
- damage: Damage is wide-ranging and may include both partial and total damage. Damage from fires, water, natural disasters, transportation, people in your home, and vandalism may be covered.
- loss or disappearance: Some plans may also cover art loss if the item disappears or you misplace it and can no longer find it.
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What Art Loss Insurance Doesn’t Cover
Although art loss insurance may cover things like theft or damage, certain art types of art or art damage may not be covered.
This may include:
- displaying artwork outside your home or business: If your art is stored outdoors or you loan it out to other galleries or businesses, then it may not be covered if it’s damaged or stolen.
- very expensive artworks: Under standard insurance policies, any expensive piece of art over $1,500 may not be covered (and you may need special coverage).
- general wear and tear: Some art may simply deteriorate over time and may not be covered under a policy. This includes smudges, fraying, or other wear and tear.
- art depreciation: Your fine art collection could depreciate in value or not be worth what it once was. Your insurance coverage could change if the value of your art changes.
The Cost Of Art And Collectibles Insurance
Add-ons and other insurance coverage for art or collectible loss is affordable, depending on how valuable the art is.
On average, typical coverage may cost around one to two percent of the cost of the item you want insurance for. So, if your piece of art costs $5,000, then it may cost you $50 to $100 per year to insure. For exact figures, contact your insurance company.
What To Do If Your Art Was Damaged Or Stolen
If any of your art or collectibles were damaged or stolen, you should file an insurance claim as soon as possible. The insurance claims process can take awhile, so get your claim filed immediately so you can collect what’s owed to you in a reasonable time.
Other things to do after your art was stolen or damaged include:
- register it with an art loss database as soon as you can (Interpol, the National Stolen Art File, Art Loss Register, etc)
- determine how your art was insured (homeowner’s policy, floater, etc.)
- follow the steps of filing a claim as outlined in your policy
- provide documentation about the value of the art (appraisal report or proof of purchase)
- leave damaged art undisturbed until an insurance adjuster has assessed it
- consult with a lawyer if you feel your insurance claim could be denied or undervalued
Also, make sure to follow up with the insurance adjuster after filing your claim. Keep them accountable and ask for a report on the progress of your claim. If you’re experiencing issues, you may need to contact a lawyer.
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How An Art Loss Insurance Claim Lawyer Can Help
If you’re depending on your homeowner’s insurance policy to cover the cost of your artwork in the event of a theft or natural disaster, then you may learn you’re only covered up to a certain monetary value. A qualified insurance claim lawyer can help examine your policy to ensure you receive a fair payout for your loss.
A lawyer can review your policy to better establish if your loss should have been covered. If you’re unsure if you should take legal action regarding your art loss claim, Florin|Roeibg offers free case evaluations to help you decide.
To start your free case evaluation, or to learn more about art loss insurance claims, please contact our offices today.