Valuing the priceless

Not everyone has the desire or the means to collect art, antiques and collectibles, but for those who do, insuring these sometimes almost priceless objects can be a headache. Apio’s Kevin Blackmore gives some guidance on where to start.

When you’re a collector, whether it’s art, antiques or collectibles, you are likely to have a keen personal connection with your collection. You’ll want to know that if something dreadful happens – a fire, damage or a theft – that your collection is covered.

Antiques and collectables covered with Apio

Art Deco Style Table Lamp with Glass Fish from Bancroft Antiques

Fine art doesn’t just mean paintings hanging on walls – it encompasses art, antiques and collectibles. A collection could include photographs, drawings, sculptures and statues, while collectibles, defined as of particular value due to their age, style, artistic merit or collectible value, could include furniture, stamps, coins, silverware, models, toys or even a gun collection.

The challenge in insuring these items is that very often, there is no value defined by the marketplace – these items are often unique, rare or seldom traded, making it difficult to assign a value for insurance purposes. In these instances, agreed value is the basis for insurance. The values of what you plan to insure are agreed between you and the insurer, and this is what gets paid out in the event of a total loss. But it’s not as simple as saying what you think the item is worth – a specialist valuation certificate is required for each item.

This is not a one-and-done process. It’s important to get your fine art and collectibles regularly revalued, as a recent valuation certificate is requested in the event of a claim, and the value for items of this nature can be affected by factors including currency fluctuations.

Fine art collections are likely to appreciate in value over the course of the insured period, and any fine arts cover should allow for this. In particular, the death of an artist often has a dramatic positive effect on the value of artwork, generally increasing the value of the art. A fine art policy will recognise this likelihood, but premiums will increase as the value of your collection does.

What goes up must come down? Not necessarily, but the items in your art collection are also covered for depreciation in the event of accidental damage. Like anything fragile or delicate, art and antiques can be accidentally damaged – and once that happens, the value is reduced. The claim will be subject to an assessment of the damage, and a decision about whether to repair, replace, reinstate or pay the value of the damaged item, so contact your advisor in the event of damage. And if your collection is such that you might lend pieces to an exhibition, exhibition cover is a sensible addition to your policy.

Building a fine art collection would strike most people as a really fun and enjoyable thing to do, but it doesn’t always go to plan. It doesn’t happen very often, but occasionally, you may purchase an item that a court of law subsequently requires you to give up possession of. This might be because the seller didn’t actually have the right to sell it to you, or it could be that there was a charge against the piece that you were unaware of. In this instance, a fine art insurance policy will cover you for the financial loss, as well as legal costs incurred. If you find yourself in this situation, check with your advisor about what your cover involves.

Insuring fine art is certainly not as straight-forward as insuring something like a vehicle or a property, but if you have a collection, it’s a necessary step to protect that value. Speak to your advisor about the best options for you.